Oil rig supply boats pas through Aberdeen Bay Wind Farm (also known as the European Offshore Wind Deployment Centre or EOWDC). Photo by Rab Lawrence / Wikimedia Commons.
The roundup covers ongoing debates in Brussels on investment labels, carbon markets and border taxes, windfall-tax proposals and the bloc’s long-term climate-resilience planning.
Europe is increasingly linking climate action with competitiveness, energy security and disaster preparedness. But debates over fossil-fuel investment, carbon-market rules and who should pay for climate resilience are set to test that approach.
EU Commission prepares EU climate-resilience framework
The European Commission is preparing a new climate-resilience framework aimed at making “proactive” climate preparedness “a guiding principle” in policymaking and investment. The new framework, which will include proposals for new regulation, is expected on 20 October, with an Environment Council debate provisionally scheduled for 11 December.
According to the EU’s briefing document: “Member States will be required to develop climate resilience strategic plans” as “a prerequisite for accessing EU funding.”
Climate commissioner Wopke Hoekstra has framed the investment as a fiscal as well as environmental priority, arguing that “making the upfront investments is way cheaper” than repeatedly paying for disaster damage in an exclusive interview for Euronews.
His argument also rests on security fundamentals. Europe imports roughly 80% of its gas and 95% of its oil, leaving it highly exposed to external shocks and geopolitical risks. Moving to a different energy system, he argues, would strengthen economic sovereignty rather than undermine competitiveness.
During her State of the European Union address, Commission president Ursula von der Leyen said the framework will identify 100 particularly vulnerable territories. She also and announced a climate insurance alliance to narrow insurance protection gaps, highlighting that only around a quarter of catastrophe losses are privately insured, turning national budgets into an “insurer of last resort”.
SFDR redraft could see fossil fuel expansion under ‘transition’ label
MEPs on the European Parliament’s economic and monetary affairs committee are backing a redraft of the bloc’s sustainable finance disclosure regulation (SFDR) which will include three new fund categories: sustainable, transition and ESG basics.
Lead MEP Gerben-Jan Gerbrandy said the new disclosure rules will provide “more clarity on how sustainability can be claimed, and a lot less paperwork”.
However, the proposed transition label is proving contentious. Funds could invest in companies expanding fossil-fuel production, provided certain conditions are fulfilled, including having a credible emissions-reduction plan and allocating at least 20% of capital spending towards activities classified as green under EU rules.
Campaigners, including Reclaim Finance, have criticised the move, arguing that fossil-fuel developers should be excluded from the transition category. Concerns have also been raised about oil and gas industry lobbying. Parliament is due to formally set out its negotiating position in October, before talks with the Commission and Council begin. SFDR 2.0 is currently on track to take effect in 2029.
Six countries press Brussels for windfall-tax options
Germany, Spain, Portugal, Italy, Poland and Austria have pressed the European Commission to develop EU-wide options for taxing oil companies’ windfall profits before an upcoming meeting of finance ministers in Luxembourg on 9 October.
Their intervention follows recent talks in Dublin where European ministers sought to develop a common response to the energy-price shock, as Brent prices once again climbed above US$100 a barrel, about 50% higher than before the US-Israel war on Iran.
Rather than propose an EU-wide tax, the Commission is offering to share best practices and support national measures. Economy commissioner Valdis Dombrovskis has said any such measures should be temporary, targeted and avoid stimulating fossil-fuel demand.
“If there are windfall profits, then we should go and tax them,” said Spanish economy minister Carlos Cuerpo, arguing a continent-wide approach would support fairer burden-sharing.
Separately, Spain is also reportedly exploring a European climate-adaptation fund, potentially financed through oil and gas profit levies and common borrowing, alongside a public-private reinsurance mechanism capable of pooling climate risks across member states.
EU Parliament keeps caps on surplus carbon credit reserves, but ‘moves goalposts’
The European Parliament has rejected the Commission’s proposal to end the automatic cancellation of excess pollution permits held in the EU’s market stability reserve, as part of the bloc’s emissions trading system (ETS).
MEPs instead voted to retain the cancellation procedure for surplus allowances, while raising the threshold from 400m to 650m allowances. The change would apply from 1 February 2027, subject to agreement among EU governments.
The reserve is designed to gradually shrink permit supply to encourage cleaner production. Parliament also approved an agreement doubling certain price-triggered releases from the ETS2 reserve, covering buildings, road transport and additional sectors intended “to cushion consumers against sharp price swings”.
Elsewhere, the Commission has proposed a wider ETS overhaul, including slower reductions in the emissions cap from 2031 and longer free allocations for some industries. Criticising the proposed extension of free allocations, Bellona policy adviser Francesco Lombardi Stocchetti said: “Europe cannot lead the clean industrial transition just by moving the goalposts.”
MEPs toughen carbon border levies, despite concerns of global spillovers
On 15 September, MEPs adopted Parliament’s negotiating position on changes to the EU’s carbon border adjustment mechanism (CBAM), ahead of talks with member states.
CBAM applies a carbon-cost adjustment to specified imports — including cement, iron and steel, aluminium, fertilisers, electricity and hydrogen — aiming to limit the risk that EU producers covered by the ETS are undercut by more carbon-intensive imports.
Last week, Parliament backed proposals to extend CBAM beyond basic materials to a wider list of downstream steel and aluminium goods, alongside tougher anti-circumvention rules. It also rejected a proposed power to remove goods from CBAM during a price shock. Instead, MEPs are proposing measures that would temporarily redirect related revenues linked to affected sectors.
The changes come amid wider concerns about the disproportionate effects of the levy on Global South economies with carbon-intensive energy systems, particularly in Africa. A recent study from the Konrad-Adenauer-Stiftung suggests CBAM could “increase production costs and lower industrial competitiveness, effectively reducing the country’s GDP.”
MEPs have proposed simplified reporting and technical assistance for least-developed countries, but the details of eligibility and funding have yet to be specified.
This page was last updated September 24, 2026
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
