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5.4. The EU is aware that if it wants to pursue global challenges such as combating climate change, biodiversity loss, pollution, or promoting more sustainable production and consumption, it needs to increase cooperation with third countries. In the cases where the European Green Deal policies have an external dimension, the EU is engaging with its partners. The EU makes sure that its external assistance actively promotes effective and ambitious climate and environment action and integration. The EU designs its climate and environmental policies in line with the WTO rules and provides a full transparency on EU climate- and environmental measures to the EU trading partners bilaterally, including in the context of trade agreements, and in the WTO. The EU has made numerous presentations on the policies with potential trade impacts in the WTO Committee on Trade and Environment, and other committees, and will continue this engagement in the future. The objective of this has been early engagement with partners to understand any potential concerns and see how they could be addressed in the policy design as well as to avoid any adverse implications or impacts for international trade in goods affected by EU legislation, while at the same time improving the understanding of the applicable rules on the EU market. The EU intends to further pursue dialogue and cooperation regarding the implementation of the EU's autonomous sustainability instruments.

5.5. The adoption of the Climate Law on 9 July 2021 sets a legally binding target for the EU to reach net zero greenhouse gas emissions by 2050 as well as to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. This allowed the EU to adopt and submit to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2020 an updated and significantly enhanced Nationally Determined Contribution in line with the Paris Agreement, confirming Europe's commitment to lead in global climate action.

5.6. On 14 July 2021, the Commission proposed a package [21] of climate, energy and transport legislation, the "Fit for 55" package, to accomplish this transformational change across the EU's economy and society – matched by commitment to a socially fair transition, which leaves no one behind.
[21] This policy package is based on a comprehensive set of impact assessments and includes:
• application of emissions trading to new sectors (shipping, transport and buildings) and a strengthening of the existing EU Emissions Trading System (EU ETS);
• a Social Climate Fund, to ensure that the green transition leaves no-one behind
• updating Member State emissions reduction targets (Effort Sharing Regulation) in line with the 2030 climate target plan;
• increased targets for renewable energy and for energy efficiency;
• a faster roll-out of low emission transport modes (including through an obligation that all new cars and vans sold in the EU from 1 January 2035 need to be zero-emission vehicles) and the infrastructure and fuels to support them;
• an alignment of taxation policies with the European Green Deal objectives;
• measures to better prevent carbon leakage in the form of a carbon border adjustment mechanism (CBAM);
• and tools to preserve and grow natural carbon sinks, with the aim of a climate-neutral land and agriculture sector by 2035 (Land Use, Land-Use Change and Forestry Regulation).

5.7. The Carbon Border Adjustment Mechanism (CBAM) is a climate measure aimed at decreasing global GHG emissions by preventing the risk of carbon leakage and by supporting increased ambition on climate mitigation, while ensuring WTO compatibility. The CBAM will equalise the price of carbon between domestic products and imports and ensure that the EU's climate objectives are not undermined by production relocating to countries with less ambitious climate policies.

5.8. The EU Emissions Trading System puts a price on carbon and lowers the cap on emissions from certain economic sectors every year. The European Commission has proposed to lower the overall emission cap even further and increase its annual rate of reduction, to phase out free emission allowances for aviation and align with the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and to include shipping emissions in the EU ETS. To address the lack of emissions reductions in road transport and buildings, a separate new emissions trading system is set up for fuel distribution for road transport and buildings.

5.10. The 2030 legally binding priority objectives set out in the 8th Environment Action Programme ("8th EAP") include the significant reduction of key environmental and climate pressures related to the EU's production and consumption, including, among others, in the area of trade.

5.11. In May 2020 the EU adopted its Biodiversity Strategy for 2030. The strategy is a comprehensive, ambitious and long-term plan to protect nature and reverse the degradation of ecosystems. A key element of the Strategy is the proposal for a Nature Restoration Law adopted by the European Commission on 22 June 2022.

5.12. On 6 December 2022, the European Parliament and the Council reached a provisional political agreement on an EU Regulation on deforestation [27], paving the way for the final adoption of the regulation in early 2023. It aims to curb EU-driven deforestation and forest degradation. By promoting the consumption of "deforestation-free" products and reducing the EU's impact on global deforestation and forest degradation, the new rules will bring down greenhouse gas emissions and global biodiversity loss and minimise consumption, and therefore decrease the trade of products coming from supply chains associated with deforestation or forest degradation, while increasing the trade of sustainable products. The proposal is part of a broader plan of actions to tackle deforestation and forest degradation first outlined in the 2019 Commission Communication on Stepping up EU Action to Protect and Restore the World's Forests. [28]
[27] European Commission, Proposal for a Regulation of the European Parliament and of The Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010, COM(2021) 706 final.
[28] European Commission, Stepping up EU Action to Protect and Restore the World's Forests, COM(2019) 352.

5.13. Furthermore, in the area of fighting pollution, the European Commission adopted the Zero Pollution Action Plan in May 2021. The main objective is to provide a compass for including pollution prevention in all relevant EU policies, including trade policies and free trade agreements, and to reduce air, water and soil pollution to levels no longer considered harmful to health and natural ecosystems and that respect the boundaries our planet can cope with, thus creating a toxic free environment.

5.14. In the area of waste, in November 2021, the Commission adopted a proposal for a new regulation on Waste Shipment, which aims to ensure that the EU does not export its waste challenges to third countries and supports a clean and circular economy.