Europe’s diesel counterpunch
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| SNEAK PEEK |
— EU members meet today to decide how to respond to U.S. pressure on diesel, after five of Europe’s biggest countries met yesterday and promised a united front.
— Governments are waking up to the threat of vital Atlantic ocean currents collapsing, a process that would wreak havoc on Europe’s climate.
— The reform of the Emissions Trading System divides the European Parliament, with the center left warning the center-right approach to the revision isn’t in line with climate targets.
Good morning and happy Friday. The EU’s self-styled “climate bank,” a.k.a. the European Investment Bank, has been accused of getting a little too cosy with Big Energy as it weighs whether to pour public money into Europe’s booming AI data center industry, our colleague Mari Eccles reports in her Influence newsletter.
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Mark your calendars: Our weekly energy and climate calendar landed in your inbox on Thursday. You can also go online to export and plan your week or suggest your own event.
| DRIVING THE DAY |
EUROPE MUSTERS DIESEL COUNTEROFFENSIVE: EU countries will meet today to discuss a joint response to the growing U.S. pressure on Europe to release fuel stocks or face a ban on exports of U.S. diesel, a spokesperson for the Commission said Thursday.
Heavy hitters: It comes after a group of five of the biggest European countries agreed to mount a coordinated response to the threat at the International Energy Agency to defuse the transatlantic tensions, three European officials told Morning Energy and Climate.
Panic in the group chat: France, Italy, Germany, Ireland, and the U.K. all attended the emergency talks after Washington directly pressured all of them, according to the people cited above. At least one other major European country was also pressured, one of the people said. The European Commission also attended Thursday’s meeting.
A third of diesel stocks: POLITICO reported earlier that U.S. Energy Secretary Chris Wright was asking for oil releases as an alternative to imposing a ban on U.S. exports of diesel, on which the EU is heavily dependent. The requested release of 120 million barrels of diesel over six months would account for well over a third of the EU’s total reserves of the essential transport fuel.
‘Assertive’ response: Together, the countries decided on three things, according to two of the people familiar with the matter: To react to the pressure with a “coordinated voice,” to make sure that “every decision about releasing stocks should be elevated to the IEA [International Energy Agency] level,” and to formulate an “assertive” response while seeking to “decrease the tension when speaking to the U.S.”
Talk to the manager: It’s a sign that European countries are keen not to give in to any attempts by the U.S. to divide and conquer with bilateral pressure campaigns, and to insist on formal channels of communication instead of diplomatic workarounds.
Not proper: An idea of the sort of argument that countries might muster in response to the pressure from Wright emerged from conversations with a smattering of other national energy officials, who told us that they were reluctant to accede to the EU’s request on the grounds that IEA releases are supposed to be reserved for supply disruptions rather than price hikes. It’s a fair point — but might not appeal to an administration hellbent on pushing down diesel costs, at any price.
Diesel-geddon: Wondering how a U.S. diesel export ban would affect daily life this side of the Atlantic? “Everything on the shelf will cost more,” Cristina Scarfia, head of European affairs at Italian freight federation Confetra, summed it up to our mobility colleague Martina Sapio. Read her story here.
| CLIMATE POLITICS |
WHEN THE OCEAN RUNS AMOC: A climate nightmare awaits Europe if global warming disrupts vital Atlantic ocean currents. Governments are starting to wake up to the threat.
Meet Europe’s heat pump: In the North Atlantic, a vast system of swirling currents hauls warm water from the tropics toward Europe, keeping the continent’s climate in a Goldilocks zone — neither too cold nor too hot, just right. This heat pump, known as the Atlantic Meridional Overturning Circulation (AMOC), helps ensure European cities enjoy warmer winters than those in the same latitudes elsewhere — think Madrid and New York City.
Enter climate change: The AMOC has run reliably for millennia. But this is about to change as humans continue heating the planet. Increased rainfall driven by climate change and freshwater from melting ice sheets are diluting the Atlantic ocean, hampering the churn of the currents. The fear is that with enough warming, the AMOC will significantly slow or collapse.
What awaits: If that happens, Europe’s climate would harshen in ways that would make this summer’s extremes seem mild by comparison. Winter temperatures could plunge, storms become more ferocious and droughts more intense. Sea levels would rise further on both sides of the Atlantic, and monsoon seasons in the Amazon and Africa would be thrown into chaos.
Near and far: This won’t happen overnight. A shutdown would unfold over decades, but scientists warn that parts of the system could start failing as early as the 2040s. And while an AMOC collapse was long considered extremely unlikely, a growing number of studies show that the currents are more unstable than previously thought.
Preparing for catastrophe: That’s startling governments into action. We found that countries from Iceland to the Netherlands are beginning to take steps toward grappling with this potential catastrophe, with several countries drawing up assessments, investing in early warning or flagging the threat as a national security risk.
No time to waste: The AMOC may never collapse, but that’s no reason for government to twiddle their thumbs, say policymakers and scientists. “It is irresponsible to wait for absolute certainty before preparing,” Jóhann Páll Jóhannsson, Iceland’s climate minister, told us. “Because, by the time the consequences become undeniable, it may already be too late to prevent them from happening.” The full long read is here.
| CARBON MARKETS |
THE ETS POLARIZES PARLIAMENT: The European Parliament’s environment committee on Thursday debated the path it should take on the Commission’s Emissions Trading System proposal. And so far, it looks like the battle for the future of the bloc’s landmark climate policy will be fierce.
Switch of a hitter: The file’s lead MEP, German European People’s Party lawmaker Peter Liese, wasn’t in the house to present his report due to a medical issue, but Swedish colleague Jessica Polfjärd stepped in. “The ETS is too tight,” she explained, describing Liese’s report. “The ETS needs to give industry more breathing space and a realistic path to decarbonization.”
Called it: As we’ve been reporting, Liese’s take on the ETS has upset lots of lawmakers, including some of his colleagues in the EPP. But among left-wing groups, whom he might need to appease depending on how he wants to strike a compromise, there aren’t any happy faces. “I don’t believe that the Commission proposal, nor Peter Liese’s proposal, will fulfill the climate law that we have supported,” said Dutch lawmaker Mohammed Chahim with the Socialists & Democrats. “It doesn’t add up.”
Right-side: Czech MEP Alexandr Vondra of the European Conservatives and Reformists floated working with the EPP to get an ETS deal his right-wing group can get behind. “I would address here specifically EPP because it holds the key to the success of the reform of the ETS system,” he said before offering his list of industry-friendly demands. “If so, count me and my group in.”
| CLIMATE IMPACTS |
SUMMER SUMMARY: A record 52% of the European continent experienced “very strong” heat stress — where the perceived temperature, a combination of actual warmth and humidity, is at least 38 degrees Celsius — by the end of summer, the EU’s Copernicus monitoring service said this morning.
Health impact: This is what led to high heat-related mortality in Europe this summer. “The significance of heat is very clear, it’s the leading cause of weather-related mortality globally. Summer 2026 demonstrated how heat stress is becoming both more widespread and more persistent,” said Samantha Burgess, climate lead at the European Centre for Medium-Range Weather Forecasts, which runs Copernicus.
River records: Meanwhile, rivers experienced their lowest summer flows since record-keeping began in 1992, according to Copernicus. “Sixty-seven percent [of rivers] had lower [flow] than the average, with 40% being much lower than average,” Burgess said. “Across the 12 major European rivers, summer 2026 saw a water deficit of 69 cubic kilometers, which is the equivalent of two years of the European public water supply.”
| ENERGY SHOTS |
DROUGHT LOSSES: European grain farmers face a 16.7 million ton drop in harvests as a result of this summer’s heat and drought, according to an analysis published by the Energy and Climate Intelligence Unit this morning. At current prices, this loss is worth €3.2 billion, they note. France was the worst-hit country, followed by Hungary and the United Kingdom.
LEGAL WARNINGS: The European Commission on Thursday referred Bulgaria to the Court of Justice of the EU for failing to fully implement electricity market rules, and will see Hungary in court for allowing oil and gas company MOL to circumvent EU law.
It also sent reasoned opinions — final warnings before the matter goes to court — to Greece, Spain, Italy and Malta for failing to fully implement energy efficiency rules; to Croatia for not implementing renewable energy legislation; to Austria and Romania for not submitting all required information under their national climate reports; and more, detailed here.
| AROUND THE WORLD |
CHINA: Chinese refiners suspended fuel exports for October to preserve domestic stocks, Reuters reports.
SOUTH KOREA: The South Korean government on Thursday pushed back on a Trump administration announcement that Seoul would invest $54 billion into a gas project in Alaska, Bloomberg reports.
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