Europe’s moon shot becomes crash landing: how the Green Deal hit industrial reality
Stories Beyond Carbon · Edition 2
The European Green Deal was designed as industrial strategy disguised as climate policy. In 2025, the disguise fell away.
TL;DR: Europe spent a decade building the world's dominant ESG investment ecosystem—€6.6 trillion in assets under management that represents 38% of all EU investments, making us the global standard for responsible business. It wasn't easy: von der Leyen had to battle her own commissioners to get it done. But now her own party wants to roll it back, with proposals to dramatically scale back the Green Deal framework. What she once called Europe's "man on the moon moment" is being dismantled just as Europe starts losing its competitive edge.
I've spent the better part of a decade watching the EU build something truly remarkable, a comprehensive framework that made Europe the destination of choice for sustainable finance and responsible business. It's what inspired me to work in this field initially.
Over these years, I've personally navigated how climate discourse evolved from earnest environmental debates to sophisticated business model discussions, and now into pure political warfare. The omnibus debate unfolding now isn't just policy technicalities to me. It's watching leaders potentially throw away the very competitive advantage that sets Europe apart.
What was once about European ingenuity and innovation has become a battleground where the foundational principles of our integration project hang in the balance.
History will remember this moment. Not for the technical amendments or parliamentary procedures, but for whether Europe chose confidence or retreat when it mattered most.
When Ursula von der Leyen stepped onto that Brussels stage in 2019, calling the European Green Deal Europe's "man on the moon moment," she wasn't just making promises. She was articulating a comprehensive architecture encompassing the Fit for 55 climate package, the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, the EU Taxonomy for sustainable finance, the Carbon Border Adjustment Mechanism, and dozens of other interconnected policies designed to reshape global capitalism.
The design was deliberately integrated. The Green Deal set Europe's 2050 climate vision, while Fit for 55 provided the enforcement roadmap: carbon trading reform, border carbon adjustments, zero-emission vehicle standards, renewable energy targets, all reinforcing each other to transform European capitalism while maintaining industrial competitiveness.
The nervous system for this sophisticated architecture became the Corporate Sustainability Reporting Directive, which requires 42,500 European companies to disclose comprehensive environmental and social data alongside financial reporting. This wasn't bureaucratic box-ticking, but information infrastructure for democratic capitalism, an ambitious evolution of the Non-Financial Reporting Directive (that has proven effective over the last 20 years), creating the world's most comprehensive corporate transparency system.
As sister legislation, the Corporate Sustainability Due Diligence Directive ensures that corporate responsibility extends beyond disclosure to action, requiring companies to identify, prevent, and mitigate human rights and environmental harms across global value chains, potentially protecting millions of workers worldwide.
You can only manage what you measure. This wasn't just management cliché but the foundation of democratic accountability itself. Without comprehensive disclosure, the interconnected policies would operate blindly, unable to track whether carbon pricing drove innovation, whether supply chain rules protected workers, or whether green finance funded genuine transformation rather than greenwashing. And without enforcement mechanisms demanding action, even the best measurement remains merely academic exercise.
No major economy had ever attempted anything this comprehensive, simultaneously transforming how companies report their impacts through unprecedented corporate transparency requirements, how capital flows toward sustainable activities, how supply chains manage human rights and environmental risks, and how trade policy protects domestic industries from carbon dumping.
While other regions focused on individual climate policies, Europe was constructing an entirely new model of capitalism that integrated environmental and social considerations into every aspect of economic decision-making.
For von der Leyen, it wasn't just policy. "According to four people with knowledge of her thinking, it's one [legacy] that von der Leyen privately values," Politico reported about her Green Deal ambition, to prove Europe could lead the world's response to climate change.
Five years later, the results vindicated this ambitious approach. By 2024, Europe had created the world's largest ESG investment ecosystem—€6.6 trillion in assets under management, representing 38% of all EU investments. This wasn't a niche market but had become the mainstream: nearly 4 out of every 10 euros invested in Europe now considers environmental, social and governance factors.
European companies reported €440 billion in Taxonomy-aligned investments in 2023 and 2024. The concrete achievements were equally impressive: 5.2 million new jobs in the environmental economy, growing 25% since 2010; German businesses exporting €180 billion annually in clean technologies; EU-based companies accounted for 72.8% of global wind turbine installations outside China in 2023; and energy independence that slashed Russian gas dependence by 67% between 2021-2023.
But behind the curtain, this system was forged through fierce political battles, not bureaucratic consensus. Today's dismantling threats make those original fights essential to understand. The decisive moment was Fit for 55, the most ambitious climate legislation any major economy had attempted, and von der Leyen's ultimate internal test.
When Frans Timmermans and his chief of staff Diederik Samsom proposed the Fit for 55 package (which is bascially a package of specific rules and time-bound goals that each country and sector need to commit to) in mid-2021, they sent shockwaves through the College of Commissioners.
The other 25 commissioners ranged from concerned to vigorously opposed to the sweeping reforms. Individual commissioners wanted to weaken or eliminate specific policies they found threatening to their portfolios: the transport commissioner objected to automotive emission standards, the trade commissioner worried about the Carbon Border Adjustment Mechanism, others questioned the costs of building renovation requirements.
Samsom, a former Dutch Labour Party leader and skilled political operator, understood that allowing commissioners to cherry-pick would destroy the package's effectiveness. He brought a spherical wooden puzzle toy with interlocking pieces to meetings, which had the same number of components as the legislative package, each representing a component of the proposal. His challenge was simple: remove any piece and try to keep the sphere intact.
The message was clear: this wasn't a menu where politicians could order à la carte, it was a coherent architecture that required every component to function.
Von der Leyen was with him. At times, she and Timmermans stood alone in supporting the package against the other 25 commissioners. Behind the scenes, few know just how fiercely she fought for her vision, backing Samsom's integrated approach completely even when isolated within her own Commission.
She won in 2021, but the political ground was shifting dramatically beneath her feet. The economic pressures of recent years, the pandemic, energy crisis, inflation, Ukraine war, geopolitical tensions, have created political space for a diverse coalition of business interests, centrist political leaders and far-right crusaders united in their desire to reset the Green Deal.
What began as European confidence in setting global standards has given way to anxiety about competitiveness pressures from the United States and China. Business groups that initially adapted to the new framework now demand rollbacks, arguing that regulatory burden undermines European industry. Polish Prime Minister Donald Tusk captured their defiant mood: "The revolt against regulation is inevitable! Whether someone in the EU likes it or not. The time is now!"
The turning point came at a gathering of national European People’s Party (EPP) leaders in Berlin in January 2025. Officials from Germany's Christian Democrats distributed a statement committing the group to severely weakening several pillars of the Green Deal.
This time, the architect of Europe's "man on the moon moment" sat silent as her own political family dismantled her legacy.
One month later, the Commission announced the omnibus package, which would cut CSRD coverage by 75%, from 42,500 companies to just 11,700, in the name of "simplification". The European Parliament Legal Affairs Committee lead negotiator Jörgen Warborn wants to go even further, slashing it by 94% to a mere 3,000 companies.
To put it in perspective. Under Warborn's proposal, one-third of EU member states would have fewer than 10 companies reporting sustainability data. Entire European nations would become information blind spots just when ESG considerations drive 38% of all EU investment decisions, €6.6 trillion in assets that depend on reliable corporate disclosure data.
Von der Leyen, a medical doctor before entering politics, now finds herself performing what Politico described as a desperate attempt to "amputate the Green Deal to save its life." When 2025 passed its midpoint, the surgery has been extensive: watering down the 2035 ban on combustion engine vehicles, killing pesticide control legislation, delaying the EU Deforestation Regulation by 12 months to December 2025, cancelling the Green Claims Directive (though the Commission later clarified it had not actually withdrawn support), and pushing back auto-emission standards by 2 years.
Her own spokesperson now rationalizes the retreat: "Simplification is in the interest of the European Green Deal. If it gets too complex, it won't be done."
Frans Timmermans, her former Green Deal commissioner who stood with her in those crucial battles, now watches from the sidelines with a prophetic warning: "If the center right starts to mimic the radical right. It's the radical right that wins."
Europe is choosing blindness in an age that demands sight. Brussel is witnessing the fracturing of the coalition that kept EU's Green agenda moving forward. What took decades to build can be destroyed in a single vote.
The physician performing surgery on her own legacy to preserve what remains. The question now is whether the patient can survive the surgery.
What this means for your organisation
The structural shifts analysed in this edition have direct implications for ESG strategy, supply chain due diligence, and climate risk management. Futureproof Solutions helps corporates and financial institutions translate geopolitical and regulatory change into operational decisions.
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Bo Yu is the founder of Futureproof Solutions, a boutique sustainability and risk advisory firm serving corporates and financial institutions across Europe, Asia, and Africa. Stories Beyond Carbon explores the structural forces — geopolitical, economic, environmental — reshaping business and society. About Bo → · All editions →