The European way of life is being jeopardised by environmental degradation, a report has found, with EU officials warning against weakening green rules.

The continent has made “important progress” in cutting planet-heating pollution, according to the European Environment Agency, but the death of wildlife and breakdown of the climate are ruining ecosystems that underpin the economy.

The seventh edition of the report, which has been published every five years since 1995, found:

More than 80% of protected habitats are in a poor or bad state, with “unsustainable” consumption and production patterns driving loss of wildlife.

The EU’s “carbon sink” has declined by about 30% in a decade as logging, wildfires and pests damage forests.

Emissions from transport and food have barely budged since 2005, despite progress in other sectors.

Member states have failed to adapt to extreme weather as fast as risk levels have risen.

Water stress already affects one in three Europeans and will worsen as the climate changes.

A section of the Harz forest in northern Germany devastated by a bark beetle infestation. EU officials said woodlands were at risk from logging, wildfires and pests. Photograph: Sean Gallup/Getty Images

“We are struggling to meet our 2030 targets in many areas,” said Leena Ylä-Mononen, the executive director of the agency. “This is, basically, putting at risk the future prosperity, competitiveness and quality of life of Europeans.”

The warning comes amid a rollback of green rules as far-right parties that deny the science of climate change gain ground across the continent. The US has also put pressure on EU leaders to buy its fossil fuels and ditch pollution standards that affect imported goods.

In a speech at the UN on Wednesday, Donald Trump claimed without evidence that many European countries were on the “brink of destruction because of the green energy agenda”. The US president blamed a 37% drop in EU emissions since 1990 for lost jobs and factory closures.

The three most senior EU officials responsible for environmental policy – Teresa Ribera, Jessika Roswall and Wopke Hoekstra – used the findings of the report to argue for continued climate action and warned against seeing it as a financial burden.

“The costs of inaction are enormous, and climate change poses a direct threat to our competitiveness,” said Hoekstra, the EU’s climate commissioner. “Staying the course is essential to safeguarding our economy.”

Ribera, who is in charge of competition and the green transition, said: “Delaying or postponing climate targets would only increase costs, deepen inequalities and weaken our resilience.”

The report paints the most comprehensive picture yet of Europe’s environment, though lengthy verification processes mean the most recent data for some issues dates as far back as 2021. It found only two of 22 specific policy targets for 2030 – greenhouse gas emissions and ozone-depleting substances – were “largely on track”. Nine were “largely not on track”, with the rest showing a mixed trend.

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The state of the natural environment was judged to be particularly worrying, with the EU having failed to meet its target to halt and reverse biodiversity loss by 2020 and no biodiversity indicators being on track to meet 2030 targets. One of the few positive wildlife trends was the growth of protected areas, which rose to 26.1% of land and 12.3% of sea in 2022.

Progress toward a circular economy was also poor. Material demand met by recycling rose only slightly – from 10.7% in 2010 to 11.8% in 2023. “The real red flag is our consumption,” said Tobias Lung, co-author of the report. “Our consumption levels are way, way, way too high.”

EU leaders have shifted their focus from climate action to economic competitiveness over the past year, weakening green policies as part of a push for “simplification” that campaigners said was deregulation.

The commission says it still stands by its green agenda but is offering flexibility to industry sectors that find the rules burdensome, as well as to member states pushing back against the pace of the transition.

Ylä-Mononen highlighted the improvement in Europe’s air quality, which has led to premature deaths from fine particles roughly halving since 2005. “We are saving human lives thanks to those actions,” she said. “It is really a clear case to continue.”