The European Union has succeeded in cutting greenhouse gas emissions by more than a third since 1990, even as its economy grew by 60 percent, but remains under mounting pressure from climate change impacts and environmental decline. These findings come from the European Environment Agency’s (EEA) latest State of Europe’s Environment report, part of its mandated five-yearly series assessing the bloc’s progress on climate, sustainability, and nature protection. The report highlights Europe’s achievements in reshaping its energy system while also warning of economic and ecological risks that could undermine competitiveness if action stalls.

Scope and Strategic Framework

The EU set its long-term course with the 2021 Climate Law, which enshrined the target of climate neutrality by 2050 into legislation. Alongside this ambition, lawmakers committed to a binding 2030 target of at least a 55 percent emissions cut compared to 1990 levels. More recently, the bloc pledged to set a 2035 milestone of between 66.25 percent and 72.5 percent, while the European Commission has proposed an even more ambitious 90 percent reduction target by 2040. Against this backdrop, the EEA report confirms strong progress, showing a 37 percent drop in emissions since 1990 and a doubling of the pace of annual reductions since 2005.

This progress has been powered largely by a dramatic shift in the energy mix. The share of renewables has doubled since 2005, with renewable energy now accounting for almost a quarter of total final energy use and 45 percent of all electricity generation in 2023. Coal and other fossil fuels have steadily declined, though they still account for nearly 70 percent of the EU’s gross available energy. The report underscores the need for much faster deployment of renewable energy, alongside large-scale electrification and the replacement of fossil-based inputs with clean alternatives in key industries.

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Economic and Environmental Impact

The transition has delivered uneven results across sectors. Energy supply emissions have dropped by nearly half since 2005, while industry has achieved a 36 percent reduction. Transport, however, has cut emissions by only 6 percent, and agriculture by 7 percent. The EEA expects transport emissions to decline more rapidly in the years ahead with the ramp-up of electrification, but agriculture emissions are forecast to remain largely flat through 2030. This imbalance raises questions about the EU’s ability to secure deep, economy-wide cuts on schedule.

At the same time, climate impacts are inflicting growing economic damage. Between 1980 and 2023, weather- and climate-related events caused more than €738 billion in losses, including over €162 billion in just the last three years. If warming exceeds 1.5°C, the EEA projects that EU GDP could shrink by 7 percent by the end of the century, with losses of €2.4 trillion expected between 2031 and 2050. Agriculture, forestry, mining, quarrying, and construction are among the most exposed sectors, raising alarm about long-term resilience.

Biodiversity and Governance Challenges

The report paints an especially grim picture for biodiversity. It finds that 81 percent of Europe’s habitats remain in poor or bad condition, with little progress made in reversing ecosystem decline. Previous targets for conservation and restoration have been missed, while pressures on natural systems from land use, pollution, and climate change continue to mount. The EEA warns that the short-term outlook for biodiversity is “bleak,” suggesting that without stronger governance and investment, nature loss will continue to accelerate.

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Future Outlook

Despite the warnings, the report emphasizes that Europe’s climate strategy remains not only viable but essential. Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, stressed that protecting nature and accelerating decarbonization should be seen as investments in competitiveness and resilience rather than costs. She argued that postponing or diluting targets would only increase financial burdens, deepen inequality, and weaken Europe’s ability to withstand future shocks.

With record-breaking extreme weather events and climate-related damages fresh in memory, the report underscores the urgency of scaling up both mitigation and adaptation. The EU has shown that emissions can fall even in the context of economic growth, but the next decade will test whether it can sustain momentum while addressing stubborn sectors, reversing biodiversity decline, and protecting prosperity against intensifying climate risks.

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