Barely three months after the Turnberry agreement, the US is once again putting pressure on the EU — this time to roll back parts of its green agenda — under threat of a renewed trade escalation, a “position paper” from the US government seen by the Financial Times reveals.

The EU’s climate ambitions appear to have become a bargaining chip in trade negotiations with Washington. Unless this is merely a convenient alibi for a European Commission eager to trim its green agenda.

US offensive

The joint EU-US statement of August 21st had already set the tone. The Commission pledged to address “US concerns” about several flagship pieces of the European Green Deal:

  • The Carbon Border Adjustment Mechanism (CBAM). CBAM imposes a levy on carbon-intensive imports to prevent the offshoring of emissions and to ensure fair competition for European producers.
  • The Corporate Sustainability Due Diligence Directive (CS3D). The CS3D requires large companies to identify, prevent and remedy human-rights and environmental abuses throughout their supply chains.
  • The Corporate Sustainability Reporting Directive (CSRD). The CSRD obliges companies to publish detailed information about their environmental, social and governance performance.
  • The EU Deforestation Regulation (EUDR). The EUDR bans the sale, import, or export of products like timber, cocoa, coffee, palm oil, soy, rubber, and beef within the EU if they come from deforested or degraded land.

Together, CBAM, CS3D, CSRD and the EUDR are central pillars of the von der Leyen I Commission’s environmental ambitions. But they have been significantly watered down following the 2024 European Parliament elections.

Under pressure from the European People’s Party (EPP) and through a series of “Omnibus packages,” the Commission has sought to simplify environmental legislation and reduce administrative burdens on business.

This drive for “rationalisation” has led to numerous exemptions and diluted requirements — signalling a broader rebalancing between ecological transition and economic competitiveness in the EU’s new political phase.

For example, the revised version of the CS3D adopted by the European Parliament on October 13th considerably narrows its initial scope.

From 2028, it will apply only to companies with more than 5,000 employees and annual turnover above €1.5bn, compared with 1,000 employees and €450m in the previous version. Corporate obligations to align with the Paris Agreement’s objectives and the EU Climate Law have also been eased.

Repeated delays on deforestation rules

The EUDR has become emblematic of the Commission’s wavering resolve.

At the end of September, Environment Commissioner Jessika Roswall proposed another postponement — pushing implementation back to late 2026 instead of the current deadline of late 2025.

The announcement coincided with the conclusion of the EU–Indonesia trade agreement — Indonesia being one of the bloc’s main suppliers of palm oil.

The Commission argued that its IT systems were not yet ready to handle the large volume of data that importers would need to provide on the geographic origin of their products. In Brussels, few found that convincing.

After more than three years of preparation — and a previous one-year delay — the justification raised eyebrows. A few days later, Commissioner Teresa Ribera said that another full year’s delay seemed excessive and that the technical hurdles should be overcome much sooner.

Her comments only deepened the growing uncertainty surrounding the fate of the EU’s extraterritorial environmental legislation.

Trade talks gather pace

As the green agenda stalls, the European Commission is moving quickly to advance major trade agreements, notably with Mercosur.

On October 8th, it unveiled agricultural safeguard measures intended to calm tensions around the impending deal with the Mercosur bloc. The Commission hopes to sign the final text on December 5th at a summit in Brazil.

Under the proposed terms, an investigation would be launched if imports of sensitive products — such as beef or poultry — increase by more than 10% in a year and prices fall by 10%.

These agreements serve above all the Commission’s objectives of diversification and economic security. Brazil is a key supplier of bauxite, graphite and manganese; Indonesia exports nickel and cobalt — critical minerals for the energy transition.

Yet both trade deals remain far removed from the lofty sustainability goals set out in the Commission’s 2022 Trade and Sustainable Development Strategy. Their environmental provisions are unsanctionable and, crucially, make no specific reference to the ecological challenges posed by these partners.