The European Green Deal: Origin, Relevance and Evolution

The European Green Deal represents one of the most ambitious climate policy frameworks in the world, fundamentally reshaping Europe's approach to economic development, environmental protection, and social equity. Launched in December 2019 by the European Commission under President Ursula von der Leyen, this landmark initiative established a comprehensive roadmap to transform the European Union into the first climate-neutral continent by 2050.

Origins and Development

The European Green Deal emerged as the central pillar of the European Commission's strategy following the 2019 EU Parliamentary Elections. While building upon previous climate initiatives-particularly the Juncker Commission's "A Clean Planet for All" strategy-the Green Deal marked a significant shift by placing sustainability objectives at the heart of all EU decision-making processes.

The deal was formalised through the European Climate Law (Regulation (EU) 2021/1119), which entered into force in July 2021. This legislation transformed the political commitment to achieve climate neutrality by 2050 into a legally binding obligation. Crucially, it also increased the EU's 2030 decarbonisation target from 40% to a more ambitious 55% reduction in greenhouse gas emissions compared to 1990 levels.

Key Objectives and Policy Areas

The European Green Deal functions as a growth strategy with several interconnected objectives:

Climate Neutrality: Achieving net-zero greenhouse gas emissions by 2050, with an intermediate target of 55% reduction by 2030.

Circular Economy: Transitioning to an economic model where products are reused, repaired and recycled, minimising waste and conserving resources.

Clean Industry: Promoting cleaner, more sustainable and energy-efficient industrial practices that remain competitive in global markets.

Environmental Protection: Working towards zero pollution and restoring biodiversity to ensure a healthier environment.

Sustainable Agriculture: Implementing greener farming practices that protect the environment while providing healthy and affordable food.

Just Transition: Ensuring the transition is fair and inclusive, supporting those most affected by the changes.

Relevance to the Built Environment

The built environment represents a critical focus area within the European Green Deal, as buildings account for approximately 40% of the EU's energy consumption and 36% of greenhouse gas emissions. Several key initiatives specifically target this sector:

Renovation Wave: Launched in October 2020, this strategy aims to double renovation rates over the next decade, improving the energy efficiency of 35 million buildings across Europe. It addresses the dual challenge of energy poverty and high-emission buildings.

Energy Performance of Buildings Directive (EPBD): The Green Deal has prompted revisions to this directive to accelerate building decarbonisation through stricter energy performance standards, renovation requirements, and the integration of renewable energy systems.

Construction Products Regulation (CPR): This regulation has been identified as a key tool for delivering sustainability information about construction products, using Life Cycle Assessment and Environmental Product Declarations as the preferred instruments.

Level(s): A voluntary EU framework for assessing and reporting on the sustainability performance of buildings throughout their lifecycle, promoting circular economy principles in construction.

For the construction sector, the Green Deal emphasises the need for a coordinated approach that addresses both the manufacturing of building products and construction activities within a broader industrial strategy. The policy recognises that while product information is essential, design, installation, operation and end-of-life management play equally critical roles in determining environmental outcomes.

Evolution to the Clean Industrial Deal (2025)

In February 2025, the European Commission unveiled the Clean Industrial Deal (CID) as the successor to the European Green Deal. This new framework builds upon the foundations laid by the Green Deal whilst placing greater emphasis on industrial competitiveness, decarbonisation, and economic resilience in response to evolving global challenges.

The Clean Industrial Deal represents a strategic pivot that integrates climate action with industrial, economic, and trade policies. It aims to position Europe as a leader in innovation and sustainable growth while addressing pressing concerns such as rising geopolitical tensions, slow economic growth, and technological competition.

Key elements of the Clean Industrial Deal include:

Affordable Energy: Recognising that European energy prices are significantly higher than those of global competitors, the CID includes an Action Plan for Affordable Energy to reduce costs for businesses and consumers. This plan focuses on improving grid infrastructure, promoting renewable energies, and simplifying permitting procedures.

Lead Markets: The deal aims to establish lead markets for clean technologies and products by increasing demand for sustainable alternatives. This includes initiatives to boost investments in clean tech manufacturing with over €100 billion of planned investment.

Financing Mechanisms: The CID introduces new funding instruments, including the Industrial Decarbonisation Bank, which will mobilise €100 billion to support the transition, particularly for hard-to-decarbonise sectors.

Circular Economy: Circularity is prioritised as a means to maximise the EU's limited resources, with plans for a Circular Economy Act in 2026 to ensure more efficient use of scarce materials.

Sectoral Transition Pathways: The CID will serve as a framework for engaging industries to develop sectoral transition pathways, with initial focus on automotive, steel and metals, and chemicals sectors in 2025.

Electrification Targets: The deal establishes key performance indicators, including increasing the economy-wide electrification rate from 21.3% to 32% by 2030 and installing 100 gigawatts of renewable electricity capacity annually until the end of the decade.

Implications for the Built Environment

For the construction and housing sectors, the Clean Industrial Deal reinforces and extends the Green Deal's focus on decarbonisation while adding new dimensions related to industrial competitiveness and resilience. The emphasis on affordable energy, circular economy principles, and sectoral transition pathways offers both challenges and opportunities for stakeholders in the built environment.

The CID's focus on reducing energy costs could significantly benefit energy-intensive construction material industries such as steel, cement, and chemicals. Meanwhile, the push for circularity aligns with growing efforts to reduce waste and lower production costs in construction through improved resource efficiency.

The deal's commitment to developing sectoral transition pathways will likely include specific plans for construction-related industries, providing clearer guidance for investment decisions and capital mobilisation towards decarbonisation efforts in the built environment.

Conclusion

The European Green Deal has established a transformative policy framework that continues to evolve through initiatives like the Clean Industrial Deal. For the built environment, these policies represent both a significant challenge and an unprecedented opportunity to reimagine construction practices, building operation, and urban development in ways that simultaneously address climate change, resource efficiency, and economic competitiveness.

As these policies continue to unfold, they will increasingly shape regulatory requirements, market incentives, and investment priorities across Europe's construction and real estate sectors, driving innovation and sustainability in the built environment for decades to come.

References

1. European Commission. The European Green Deal. https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
2. Construction Products Europe. Core EU Commission Policy Initiatives – EU Green Deal. https://www.construction-products.eu/publications/green-deal/
3. European Commission. Clean Industrial Deal. https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en
4. Gleiss Lutz. European Commission unveils Clean Industrial Deal. https://www.gleisslutz.com/en/news-events/know-how/european-commission-unveils-clean-industrial-deal
5. Latham & Watkins. European Commission Unveils Clean Industrial Deal. https://www.lw.com/en/insights/european-commission-unveils-clean-industrial-deal
6. Wikipedia. European Green Deal. https://en.wikipedia.org/wiki/European_Green_Deal
7. Wuppertal Institute. Comprehensive Assessment of the Clean Industrial Deal. https://wupperinst.org/en/a/wi/a/s/ad/8890
8. IIGCC. New EU Clean Industrial Deal chimes with investor recommendations. https://www.iigcc.org/insights/new-eu-clean-industrial-deal-chimes-with-investor-recommendations
9. Council of the European Union. European Green Deal. https://www.consilium.europa.eu/en/policies/european-green-deal/
10. Clean Energy Wire. EU aims to bolster competitiveness through Clean Industrial Deal. https://www.cleanenergywire.org/factsheets/qa-eu-aims-bolster-competitiveness-through-clean-industrial-deal