The European Green Deal must go global

Simone Tagliapietra, Cecilia Trasi and Giovanni Sgaravatti are all researchers at Bruegel.

Over the last five years, the European Green Deal has generated a wave of unprecedented legislation, which will enable Europe to transform its economy — and it will have major international repercussions.

There are already two notable examples of how the Green Deal will affect Europe’s trade partners, and those are the EU deforestation law, which will ban imports of cocoa, timber and sanitary products potentially linked to deforestation, and the Carbon Border Adjustment Mechanism (CBAM). The former, which is set to take effect later this year, has already prompted the U.S. to demand a delay, as Washington argues it will hurt American producers. And the latter, due to be fully enforced in 2026, has generated strong pushback from many of Europe’s trading partners, including China.

The truth is, managing these emerging tensions will require much stronger green diplomacy from the EU, and it will also require a more strategic and coherent approach to the bloc’s green partnerships.

European Commission President Ursula von der Leyen acknowledged this herself in July, while presenting her objectives for the next five years before the European Parliament. But actually accomplishing this will require the development of a new agenda — one that’s able to make integrated use of EU trade, climate and development policies in order to manage the impact that Green Deal measures have on partner countries. And it should start by focusing on those in the global south.

First, the bloc must reorient its green diplomacy in order to address the challenges of decarbonization, security and competitiveness. And this means a paradigm shift away from merely setting targets toward ensuring implementation.

Doing so will mainly involve pushing for the evolution of Nationally Determined Contributions (NDCs) — the key pledges made by countries under the Paris Agreement — into comprehensive national green transition plans that integrate concrete projects and initiatives. Linking these plans to climate finance disbursement, particularly in the global south, can create greater incentives for more robust development and implementation. And this is particularly important in view of 2025’s United Nations Climate Change Conference COP30 in Brazil, when countries will have to submit their updated NDCs.

Second, the bloc must build a new avenue of diplomacy for the international taxation of climate and development. A declaration from last year’s COP28 already explicitly called for “accelerating the ongoing establishment of new and innovative sources of finance, including taxation” when it comes to climate mitigation and adaptation projects in the global south. This could include levies on international aviation, maritime shipping, trade in fossil fuels, financial transactions and extreme personal wealth.

The EU, for its part, should foster this new international discussion, starting with a focus on the — arguably — easier options, such as introducing compulsory minimum excise duties on fossil fuels used by aviation and maritime shipping, or levying climate taxes on business-class flights. These could all be viable ways of generating revenue to help poorer countries.

Third, the bloc needs strong and effective Clean Trade and Investment Partnerships. Von der Leyen’s plan for the next five years includes this idea, with the aim of helping secure supply of raw materials, clean energy and clean tech from across the world. And this dovetails nicely with the recent trend of signing partnerships with third countries, as they will need to be consolidated into a single, unified green industrialization approach for each partner nation.

Such alliances should facilitate the transition of major partner countries in the global south up the supply chain, advancing from mere extraction to refining and value-added processes that emphasize sustainability and efficiency. However, as this transition will require strategic investment in projects aimed at enhancing environmental performance and technological innovation, collaboration with the private sector is also essential. And while direct intervention by EU governments may be limited, they can support private investment through financial guarantees and export credits.

Fourth, and finally, a new international trade and climate deal will be vital for the EU. The looming risk of a green trade war between the U.S., China and Europe currently poses a significant threat to global decarbonization. So, to mitigate this risk and foster a conducive environment for sustainable trade, the EU should advocate for plurilateral agreements on green subsidies and tariffs.

These agreements would ensure that trade policies align with environmental objectives, while also preventing the emergence of protectionist measures that undermine global decarbonization efforts. Collaboration with major partners — particularly the U.S. and China — will be crucial in this endeavor, and Europe should engage in constructive dialogue, exploring options for cooperation via existing mechanisms, as well as multinational agreements. Moreover, the bloc must resist the temptation of protectionist inward-looking policies itself.

In the five years ahead, the European Green Deal’s external dimension will be just as important as its domestic one, and should be brought to the fore of the EU’s climate strategy accordingly. Failure to support decarbonization abroad risks compromising the Green Deal’s domestic implementation, as well as the possibility of reaching global climate targets.

The new EU institutional cycle is an opportunity for Europe to solidify its leadership in this area. It’s time for the Green Deal to go global.