<p>The European Green Deal aims to make Europe the world’s first climate-neutral continent by 2050. Achieving this goal requires a substantial reduction in fossil energy use, a rapid increase in renewable energy, and improvements in energy efficiency. This study investigates the potential of renewable energy deployment to mitigate carbon dioxide emissions in the European Union. Using panel data for 25 member states from 1997 to 2021, we disaggregate total energy consumption into fossil and renewable components and apply the Pooled Mean Group estimator, which is robust to cross-sectional dependence and mixed integration orders. The results show that in the long run, a 1% increase in renewable energy reduces CO₂ emissions by 0.06%, while a 1% increase in fossil energy raises emissions by 0.78%. Fossil energy is also significant in the short run, whereas renewable energy effects materialize only over time. The average annual growth of renewable energy share is 1.61%, associated with a 0.62% annual decline in emissions. These findings imply that the objectives of the European Green Deal are achievable, but only if the transition accelerates to at least 12% annual growth in renewable deployment, coupled with a complete phase-out of coal and massive investment in solar and wind power. While European Union’s emissions are falling, global emissions continue to rise, underscoring that climate change is a global phenomenon requiring collective action.</p>