Ahead of a key vote by environment ministers on November 4, EU member states remain divided between those seeking flexibility for industry and others determined to uphold ambitious emissions targets. The dispute reflects a broader backlash against the Green Deal, once hailed as Europe's flagship policy for sustainable growth.

At the heart of the disagreement are carbon credits — tradable certificates allowing companies to offset emissions by funding pollution cuts elsewhere. The European Commission has proposed capping their use at 3%, but France, Italy and Poland are lobbying to raise that ceiling to 5% or even 10%. Nordic countries and Denmark, which currently holds the EU presidency, insist on keeping the stricter limit to maintain the bloc's environmental credibility.

The 2040 climate target would require a 90% reduction in emissions compared with 1990 levels. Several eastern and central European states, including Poland, Czechia and Hungary, have warned that such ambitions could harm heavy industry and threaten jobs, calling for support and more gradual timelines.

Environmental groups have condemned attempts to expand carbon offset use, arguing that they merely shift pollution abroad and delay real emission cuts. "As the fastest-warming continent in the world, Europe should drive steep reductions here and now," said Mathieu Mal of the European Environmental Bureau.

The Danish presidency has floated introducing a "revision clause" to review progress and adjust targets if countries fall behind. France has supported a mid-term review by 2030 to safeguard its auto industry, while others want stricter language ensuring accountability.

Industry associations warn that the proposed 90% target is unrealistic without massive investment in technology and energy infrastructure. "The 2040 goal implies near-total decarbonisation of Europe's energy-intensive sectors within just 15 years — it's an illusion," said Axel Eggert, head of the European Steel Association.

The debate has exposed growing political rifts after the 2024 EU elections, which saw centrist and far-right parties erode the Green bloc's influence. Once EU states reach a common position, the proposal will move to the European Parliament, whose industry and transport committee is expected to vote on November 5.

Whether Europe chooses compromise or ambition, the outcome will determine the credibility of its climate leadership ahead of next year's COP30 summit.