The European Union’s commitment to sustainability seems to be waning. It recently made several steps back in its green transition. The most recent one is the decision to scrap the ban on new cars with combustion engines that was scheduled to come into effect in 2035.
A Big Win for Car Makers
In 2021, the EU unveiled a new legislation package, part of its European Green Deal policies, called Fit for 55. According to the package, all new cars sold in the EU from 2035 and beyond would need to be zero-emission. However, this stance has been reversed. Instead of 100% cut in CO2 emissions, the EU is now aiming for 90% reduction. The change still needs to be approved, but that is considered a done deal.
This notable shift has been a result of pressure from car makers in Germany and Italy. The likes of Volkswagen and Renault embraced the initial goals but found out that they didn’t have the capacity to compete with electric vehicles from China. Additionally, the adoption of EVs in Europe is behind the early expectations. EVs have accounted for 13% of European cars in 2024, and the percentage only increased to 16% in 2025.
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Omnibus I Package
The right-wing parties have recently increased their influence in the EU, and the backtracking in green initiatives is one of the main byproducts. Under their directive, the lawmakers have passed the legislation package called Omnibus I earlier in December, which significantly alters some key aspects of the Green Deal. The main changes affect the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
CSRD initially required all companies to submit annual reports on the social and environmental risks they face. Now, only companies with 1,750 employees and €450 million net turnover on an annual basis will have this obligation. CSDDD mandated all companies to “foster sustainable and responsible corporate behavior in companies’ operations and across their global value chains.” The recent change limits the requirement only to companies with 5,000 or more employees and a turnover of €1.5 billion. Additionally, the standards for both CSRD and CSDDD reports have been loosened.
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EU Abandons Its Lofty Goals
With the new legislation packages, the EU admitted its defeat against big companies and global partners. It abandons its lofty goals and fails in the bid to set an example for the rest of the world. Because only a small crack in the foundation is needed for the whole structure to eventually collapse.
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