On 1 January 2026, Cyprus assumed the Presidency of the Council of the European Union, concluding the current trio at a pivotal moment for EU climate and industrial policy. The first half of 2026 will coincide with major milestones: the adoption of the EU’s 2040 climate framework, the Carbon Border Adjustment Mechanism (CBAM) transition into its definitive phase, and the release of proposals that will shape Europe’s competitiveness and infrastructure direction towards 2040.  

Cyprus’ Presidency frames its priorities around security, resilience and competitiveness. These themes are not separate from the green transition. They will influence how the Council approaches industrial decarbonisation at a moment when turning commitments into action is critical. In this article, we explore what the programme signals for climate-relevant files, why this matters for EU climate objectives, and where Bellona sees opportunities to strengthen consistency, integrity and impact across the priorities on the Council’s climate agenda in the months ahead. 

Climate change as a security challenge 

Cyprus explicitly links climate change with security, presenting climate impacts as factors that can intensify instability through pressures such as water scarcity, more frequent extreme events and the risk of displacement, with particular attention to the Eastern Mediterranean region.  

When climate change is treated as a security-relevant risk, it is more likely to be reflected in decisions on sustainable investment, infrastructure resilience and international cooperation. It also reinforces the case for the green transition, particularly in a context where reliance on fossil-based energy and carbon-intensive supply chains continues to drive emissions and wider environmental harm. 

Bellona believes the climate-security nexus must go beyond adaptation and crisis response. The EU’s ability to cope with climate impacts will ultimately depend on rapid emissions reductions in the energy system and industry, and on whether resilience planning remains aligned with science-based climate objectives. During its Presidency, Cyprus must support concrete delivery: keeping mitigation, adaptation and implementation at the centre of Council discussions, and ensuring that resilience measures complement the emissions reductions required to meet EU climate goals. 

Powering the transition: grids, electrification and affordable energy 

Cyprus’ Presidency programme highlights electricity networks and system integration as key enablers of the energy transition. It presents grids and interconnections as essential to a more decentralised, digitalised and flexible power system, supporting the integration of higher shares of renewables, expanded storage and stronger demand-side response. To deliver on this agenda, the Presidency will steer Council work on the European Grids Package, the Action Plan for Affordable Energy and an Electrification Action Plan. 

This focus is well aligned with where progress in the transition risks slowing down. Electrification is now a cornerstone of industrial decarbonisation, yet it will only deliver if electricity networks can supply clean power at scale, reliably, and at affordable prices. Grid constraints and slow system planning already delay renewable connections and through curtailment and costly redispatch, raise systems costs that ultimately feed into consumer and industrial bills. This also mirrors the Commission’s agenda, where grids, affordability and electrification are treated as prerequisites for industrial decarbonisation. 

For Bellona, the Grid Package should strengthen system planning, explicitly incorporating energy efficiency and flexibility so that infrastructure is built to match real system needs, financeable and deployed faster. Electrification should be pursued as a competitiveness strategy for European industry, particularly where industrial operators need predictable access to clean power and greater price stability. The revision of the TYNDP process is an opportunity for ensuring that energy efficiency and future industrial energy demand are correctly captured in energy planning. 

In parallel, any hydrogen-related work should preserve the integrity of the renewable hydrogen framework. Stability in RFNBO (Renewable Fuels of Non-Biological Origin) rules is essential to avoid diverting renewable electricity away from direct electrification and to avoid punishing first movers. 

Creating demand for clean industry: public procurement and the Industrial Acceleration Act 

Cyprus’ programme aligns competitiveness with climate objectives by emphasising enabling measures for industry, such as the Industrial Acceleration Act and the ongoing revision of the Public Procurement Directives. This is a welcome direction. Europe’s clean industrial transition cannot rely on supply-side measures alone; it also requires clear demand signals to justify investment. Public procurement is one of the EU’s most powerful tools for creating that demand, particularly for low-carbon materials in the construction value chain. These initiatives can enable a shift from price-only awards to best-value procurement that rewards environmental performance, strengthening the business case for low-carbon investments across the EU’s industrial value chains. 

From Bellona’s perspective, the Industrial Acceleration Act offers a timely opportunity to translate industrial ambition into concrete market signals, provided the design delivers real decarbonisation outcomes. The Act should include robust lead market provisions for steel and cement, with European preference tied to non-price environmental performance. Credibility will be essential. The Act should also introduce a trustworthy voluntary steel label that works for both primary and secondary steelmakers and is usable in public procurement. Any preference criteria should be designed carefully to reflect regional differences across the EU, while remaining firmly anchored in environmental performance and circularity. 

In parallel, the revision of the Public Procurement Directives should move procurement beyond price-only awards and towards best-value decisions that integrate environmental and health considerations, supported by clearer guidance and stronger implementation mechanisms. As related to construction sites, Bellona encourages the Presidency to incorporate demand-side conditions for zero-emission construction machinery. Advancing work on the Non-Road Mobile Machinery framework and a future Clean Machinery Directive would complement lead market policies by creating clearer demand signals across the value chain and helping scale cleaner construction practices across the EU. 

A missing piece: Industrial Carbon Management 

One notable gap in the Presidency programme is the absence of any reference to industrial carbon management (ICM) and the CO₂ transport and storage infrastructure needed to deploy it at scale. Implementation pressure under the Net-Zero Industry Act is increasing: Article 23 establishes a storage obligation for 44 oil and gas producers, and Member States must have penalties for non-compliance in place by 30 June 2026 – a deadline that falls during the Cyprus Presidency.  

From Bellona’s perspective, Cyprus can use the NZIA implementation timeline to keep storage development and permitting on track, particularly by encouraging Member States to meet the June 2026 penalty-setting deadline and by keeping attention on measures that accelerate permitting and build investor confidence in storage availability. 

Sustainable finance: simplification, climate integrity and remaining gaps 

The Cyprus Presidency treats CBAM mainly as a cross-cutting regulatory file. The programme focuses on “efficiently addressing” matters related to the CBAM Regulation, including preparatory work on legal, financial, economic and political aspects, and the examination of relevant proposals and initiatives. At the same time, it does not situate the regulation within a wider carbon pricing strategy, nor does it clarify the Presidency’s objectives on climate integrity, carbon leakage prevention as a climate instrument, or its interaction with the EU Emissions Trading System.  

On sustainable finance, the programme indicates that Cyprus will lead Council discussions on revising the Sustainable Finance Disclosure Regulation (SFDR). The approach centres on reducing complexity and supporting risk mitigation: tackling greenwashing, easing unnecessary burdens, and streamlining requirements for market participants and investors. Beyond the brief reference to greenwashing, there is no mention of intention to bring climate objectives into the sustainable finance discussion, which is particularly alarming considering the still incredibly large finance gap to deliver Net Zero by 2050 (~ EUR 185 trillion). 

From Bellona’s perspective, the Presidency’s focus on “simplification” should prioritise reducing administrative burden and improving implementation efficiency without weakening emissions reduction targets or the EU’s overall climate ambition. In parallel, Cyprus can play an important role in mobilising public and private capital at scale to help close the climate finance gap and keep the EU on a credible pathway to climate neutrality by 2050.  

More broadly, the programme does not set out a clear approach to carbon pricing, as the absence of any reference to the forthcoming review of the EU ETS – expected to begin in Q3 2026 – shows. Nevertheless, Cyprus will lead Council negotiations on the legislative proposals to extend CBAM to downstream goods, strengthen anti-circumvention measures, and establish the Temporary Decarbonisation Fund. Regulatory stability will be essential for CBAM to fulfil its core objectives of protecting European industry against carbon leakage and incentivising decarbonisation in third countries. Bellona therefore encourages the Presidency to work towards a swift agreement that keeps climate integrity at the heart of the revision, preserves the existing CBAM phase-in timeline alongside the phase-out of free allowances under the EU ETS, and explicitly excludes any provisions that could open the door to international carbon credits as substitutes for domestic action. 

Designing the post-2030 climate policy framework 

The programme’s emphasis on the necessary implementation of Green Deal legislation is welcome. At the same time, Cyprus will further advance the EU’s efforts to achieve climate neutrality by 2050. This should mean finalising the revision of the European Climate Law, that sets the EU 2040 climate target, and laying the groundwork for discussions on the design of the post-2030 climate policy framework.  

In late 2025, EU Member States and the European Parliament have supported a 90% reduction target for 2040 while allowing up to five percentage points to be met through international carbon credits, effectively lowering the domestic contribution to a minimum of 85%. Flexibilities of this kind risk weakening the domestic investment signal the 2040 target is meant to provide, particularly if they are not strictly limited, monitored and verified. 

From Bellona’s perspective, the key contribution Cyprus can make is to ensure a swift conclusion of negotiations on the Climate Law and preparing the ground for the design of post-2030 climate framework in a way that preserves integrity and clarity. This includes maintaining a LULUCF framework after 2030, with a separate and limited contribution towards the 2040 target and dedicated incentives to protect and maintain EU land sinks. It also requires designing the wider post-2030 package to deliver a 90% pathway with a strictly limited role for international credits, alongside a separate, limited contribution from permanent domestic carbon removals. The credibility of the 2040 policy architecture will depend on these distinctions being clear enough to drive emissions reductions within the Union. 

Bioeconomy: supporting innovation while setting clear guardrails 

The programme provides only a brief reference to the bioeconomy, pointing to the EU Bioeconomy Strategy as a starting point for Council discussions on bio-based innovations and green jobs, with an emphasis on circularity, sustainability, and enabling conditions for start-ups and new business models. While the bioeconomy offers real potential to advance climate and biodiversity goals, it also carries risks. Without clear safeguards, it can increase pressure on ecosystems, particularly through rising biomass demand and low value uses. 

Bellona therefore encourages Cyprus to use the bioeconomy discussion to put guardrails in place early. A robust EU biomass hierarchy should be established, prioritising food and feed and long-lived bio-based materials over low-value or inefficient uses, including energy, so that limited biomass is directed to the highest climate, biodiversity and societal benefit. This is increasingly important as demand pressures risk overshooting ecological limits. 

In parallel, Cyprus should insist on clarity and accountability on how CAP instruments will actually support sustainable bioeconomy value chains. That means keeping farmers at the centre, supporting cooperative and regional processing models, rewarding regenerative and biodiversity-positive practices, and ensuring that new bioeconomy markets do not incentivise inefficient or extractive biomass use. Done well, this can strengthen rural resilience, diversify farmers’ income, and protect long-term productivity under worsening climate conditions. 

Getting the EU Port Strategy right 

Cyprus’ programme recognises Europe’s ports as vital gateways and supply-chain hubs, and signals that the Presidency will work towards adopting Council Conclusions on the EU Port Strategy at the beginning of 2026. It also highlights connectivity, security and the infrastructure needed to meet decarbonisation goals, alongside stronger maritime links through the European Transport Corridors.  

A strong Port Strategy should be built around synergies with EU industrial decarbonisation and competitiveness policies, so ports enable, rather than slow, the transition. It should support rapid deployment of shore-side electricity and clean fuel infrastructure, backed by coordinated planning and investment. In addition, it should help preserve the effectiveness of key climate instruments, including CBAM and the EU ETS, by addressing carbon leakage risks linked to transshipment activities to ports outside the EU. 

An ambitious and climate-forward EU budget 

The programme identifies the 2028-2034 Multiannual Financial Framework (MFF), the EU budget for that time frame, as a key file of Cyprus’ presidency. As the principal funding instrument of EU policy, it is vital to ensure both its adequate size and priorities to address upcoming challenges. This strategic importance also makes it contentious and politically charged, and Cyprus is aiming to advance negotiations on the MFF while balancing economic and political constraints.  

The programme sets ambitious goals for the advancement of the file itself, but not for any specific outcome, such as higher climate spending. Unfortunately, the EU is facing a yearly climate investment gap of more than EUR400 billion by 2030 according to the European Commission’s own estimates. This gap can only be filled through considerable public investment and the crowding-in of private investment combined. The EU could achieve this by earmarking a much higher share of its budget for impactful climate spending and developing adequate mechanisms to incentivise private investment. This level of ambition is necessary to achieve a carbon-neutral Europe by 2050 and should include support for a just transition and civil society organisations operating in the fields of climate and environment. 

Conclusion 

Cyprus addresses climate-relevant priorities largely through the lenses of security, resilience and competitiveness—an approach that can strengthen delivery if it remains anchored in climate integrity and a focus on implementation. Bellona welcomes the attention given to grids, electrification and affordable energy, the push to advance the EU Port Strategy, and the focus on procurement and industrial enabling measures that can create credible demand for low-carbon materials. 

At the same time, key gaps remain: CBAM appears in the programme, but without a clear indication of how Cyprus intends to safeguard its climate integrity and ensure coherence with the EU ETS as the mechanism moves closer to its definitive phase. The programme is also silent on the forthcoming ETS review and does not address the emerging industrial carbon management agenda. Looking ahead, Cyprus can add real value by keeping the post-2030 climate framework robust , ensuring simplification improves usability rather than weakens ambition, and using its position to translate climate commitments into concrete, measurable outcomes in line with the EU’s climate objectives.