A Dutch NGO has filed the first climate complaint under the European Union’s trade rules, arguing that New Zealand violated the environmental provisions of its free trade agreement with the bloc by weakening its climate regulations.

The case will test whether binding climate provisions in the EU’s free trade deals can be enforced to hold governments accountable to their climate obligations, experts told Climate Home News.

The EU-New Zealand free trade agreement, which came into force in 2024, was the first in the world to include legally-binding climate provisions and possible sanctions for violating them, as the EU seeks to use its trade partnerships to advance greater environmental protection.

Under the deal, both parties committed not to weaken their environmental law to promote trade or investment and to “refrain from any action or omission that materially defeats the object and purpose of the Paris Agreement”.

At the time the agreement was signed, EU Commission President Ursula von der Leyen said the agreement included “unprecedented social and climate commitments”. But experts warned it was unclear how the Paris Agreement provisions would be enforced.

The EU included a similar “trade and sustainable development” clause in 14 other bilateral trade deals in recent years, with several others, including with China, awaiting ratification or being negotiated.

Climate activists at the Dutch NGO Both ENDS argue that the New Zealand government breached these terms by reopening its waters to offshore oil and gas exploration, releasing a climate plan that barely requires any emissions reductions, and passing a law that prevents corporations from getting sued over climate damages.

“Here, we have a so-called gold standard for free trade agreements with sustainability provisions but we have a trading partner that is doing exactly the opposite: regressing, as all the evidence points to, away from the Paris Agreement,” said Marius Troost, a senior policy advisor at Both ENDS.

Can the EU enforce its climate trading rules?

The Dutch environmental group filed the complaint under the EU Commission’s Single Entry Point, a mechanism that allows civil society to request enforcement of the bloc’s trade commitments.

The EU-New Zealand trade deal includes the possibility of suspending beneficial trading arrangements between the two parties in response to serious violations of its climate provisions. This, Troost said, is a “unique” tool to enforce both parties’ obligations under the deal.

“This is an opportunity for the EU and New Zealand to show that they are actually serious about these commitments,” he told Climate Home News.

A spokesperson for New Zealand’s Ministry of Foreign Affairs and Trade denied any violations of the agreement and said the government hadn’t received formal notice of the complaint. The country, they said, “takes its commitments under the NZ-EU Free Trade Agreement seriously, including the agreement’s environment and climate-related provisions”.

An EU Commission spokesperson said it will start a preliminary assessment of the complaint and engage with NGO Both ENDS. “Sustainability is a central pillar of the EU-New Zealand relationship,” they added.

The EU is New Zealand’s second-largest trading partner after China, with about 14% of the country’s exports going to the European market. Agricultural products like meat, diary, fruit and vegetables are the country’s biggest exports to Europe.

New Zealand is ‘having its cake and eating it’

Eliza Prestidge-Oldfield, a senior legal researcher at the New Zealand-based Environmental Law Initiative, which is supporting Both ENDS’s claim, told Climate Home News that if the EU upholds the complaint, both parties would begin a negotiation process.

“The idea is to try and resolve this positively with the New Zealand government acknowledging areas where it needs to change its actions in order to comply with the agreement, and get that change in place as soon as possible,” she said.

But New Zealand’s right-wing coalition government said it won’t take any directives from foreign actors regarding its policies. Trade minister Todd McClay told local media that it was “not for overseas countries, organisations or lobby groups to tell New Zealand how to meet its obligations”.

Prestidge-Oldfield argued the complaint isn’t about “Europe telling anyone what to do at all”, but rather stressing the conditions under which they are willing to import goods from New Zealand. “The New Zealand government is trying to have its cake and eat it too,” she said.

If New Zealand refuses to adjust its policies in line with the agreement, the complaint will be assessed by an independent panel, which can require the country to make changes. If those changes are not implemented, the panel could decide that New Zealand should lose its preferential EU market access.

A negotiated resolution is more likely, however, with no prior labour-related complaints to the EU having ever reached the panel stage.

Alexander Gillespie, a law professor at the University of Waikato in New Zealand, said sanctions would be a “last resort”. “This is a test case, which will generate considerable attention – as it is not just about climate change, but how free trade and environmental sustainability have been woven together,” he said in a statement.

Trade deals as tool for climate accountability

Experts said the case could set a precedent for how trade deals can be used to hold governments accountable on climate action. The EU has enacted similar “trade and sustainable development” clauses in its trade agreements with Canada, Japan and South Korea.

While still pending ratification, the EU’s 2024 trade agreement with Mercosur – which encompasses Argentina, Brazil, Paraguay and Uruguay – also includes climate provisions, including a commitment to “effectively implement” the Paris Agreement and promote low-carbon trade.

In addition, legal researcher Prestidge-Oldfield noted that last year’s landmark advisory opinion on climate change by the International Court of Justice (ICJ) laid out stronger climate obligations for developed countries like New Zealand and could strengthen allegations of violations of the terms of the trade deal.

“It will be an interesting area to watch how the EU free trade agreement is interpreted in the light of this advisory opinion,” she said.

The post New Zealand accused of breaching EU trade deal over climate rollbacks appeared first on Climate Home News.

New Zealand accused of breaching EU trade deal over climate rollbacks

Australia and Türkiye have agreed to take forward a “presidency-led decision for COP31” after consulting with different countries and groups, Australia’s climate change and energy minister said on Wednesday at the pre-COP meeting in Fiji.

The announcement that November’s climate conference will produce what is known among negotiators as a “cover decision” lays to rest the annual speculation over how the main outcomes of the UN climate conference will be presented this year.

Unlike other formal decision texts at COP, cover decisions are not negotiated word by word between governments. They are often summaries crafted during the proceedings by the presidency, although they still need to be adopted by consensus. Cover texts bring together key elements and initiatives emerging from the discussions at the two-week UN climate talks and give a sense of the political direction of travel for the coming year.

Australian minister Chris Bowen, who will preside over the negotiations at COP31 in the Turkish seaside resort of Antalya, said the presidency did not want to negotiate “a lengthy political statement”. The two countries are sharing the presidency in an unusual arrangement, although Türkiye has the formal title of COP31 President.

The decision, he explained, will be one that “captures the global moment and calls for action”, adding that it would offer “a focused and concrete response to the challenges and opportunities of our time”.

Bowen said the text could recognise the recent UN report acknowledging that an overshoot of the 1.5C warming limit is now inevitable, but temperatures could be brought back down to that level. The decision could also stress “the urgent need for climate action, support and international cooperation to go further and faster”, he added.

With COP31 President Murat Kurum sitting next to him, smiling and nodding, Bowen said the joint presidency aimed to be open and transparent, giving governments an early idea of what to expect from the COP31 process.

Earlier in the week, they published a second joint letter laying out key areas for progress at the negotiations, from setting up a just transition mechanism to putting science at the centre of the next global stocktake of climate plans and focusing governments on the need to increase adaptation finance.

Cosima Cassel, climate diplomacy lead at think-tank E3G, said a COP31 cover decision should send a clear political signal that accelerating climate action is central to global security, prosperity and resilience, show that faster implementation can help address 1.5C overshoot, and support developing countries to put their climate plans into practice.

EU keen to know “what success looks like”

Earlier on Wednesday, Europe’s climate commissioner Wopke Hoekstra told journalists in Fiji that the European Commission had asked the UN and COP31 organisers to provide clarity on the summit’s agenda and “what success would look like” in Antalya.

That is why, he added, “I… like it a lot that the organisers are pushing for electrification and are already clear about it upfront”.

A voluntary goal for electricity to provide 35% of the world’s final energy consumption by 2035, up from 23% today, was announced by Türkiye at the Bonn mid-year climate talks. It has since been garnering support for the target, which was developed with the backing of international energy agencies. Australia said on Wednesday it would sign up for the goal.

However, it remains unclear if or how this goal will be reflected in the COP31 cover decision, as including it in a document that has to be endorsed by all countries could influence its form.

COP31 electrification pledge leaves out clean power commitment

In recent years, blocking tactics by powerful fossil-fuel producing countries like Russia, Iran and Saudi Arabia have made it difficult for COPs to make headway on a 2023 decision to transition away from fossil fuels (TAFF).

At COP30 in Belém, Brazil had to offer to develop a voluntary TAFF roadmap at the last minute after failing to secure support to launch the process as part of the formal UN talks. There was also confusion over whether COP30 would produce a cover decision, with Brazil holding its cards close to its chest until the second week, when it decided to put together the “Mutirão Decision”.

Electrification goal in cover decision?

This time around, it is now practically certain that COP31 will produce a cover decision, but a key question is whether the co-presidency will somehow try to anchor the voluntary electrification pledge in that text.

Doing so could make it hard to specify that the electricity to meet the target should come from clean, renewable sources, due to potential objections from some countries. The proposed text for the electrification pledge, unveiled on the sidelines of the General Assembly last month, did not make that commitment.

E3G’s Cassel said the COP31 cover decision needs to specify that electrification will be clean “otherwise there is a strong risk that fossil fuel projects are supported by the pledge”. It also must outline the support needed to enable the 35×35 goal to be met, rather than just the top-line target, she added.

On Wednesday, the EU’s Hoekstra said “the whole main effort” towards the electrification goal “should be focusing on renewables”, while nuclear could also be part of the solution.

The energy transition, he added, “is about making sure we transition away from fossil fuels, as the world has already agreed on – so then doubling down on solar, on wind, on battery capacity, on all these elements should be at the very heart of it”.

The post Australia says COP31 co-presidency will work on a cover decision appeared first on Climate Home News.

Australia says COP31 co-presidency will work on a cover decision