Europe is at a crossroads on climate. The road to net zero still stretches ahead, but the journey is getting tougher as countries warn their economies can’t absorb the rising costs of meeting emissions targets.

EU leaders arrived in Brussels on Thursday divided over how fast and how far to push the green transition. A key flashpoint is the European Commission’s plan to cut emissions 90% by 2040 from 1990 levels. Leaders are unlikely to agree to a specific target at the summit, instead focusing on "enabling conditions" aimed at shielding businesses and consumers from higher bills that could spark voter backlash.

“It all boils down to the impact of climate measures on the economy,” said Huan Chang, an analyst at BloombergNEF. “There’s a concern that the cost of emissions-reduction regulations could fuel inflation alongside high energy costs that have already been hurting the EU’s industrial competitiveness.”