Building on its climate change mitigation policies and associated greenhouse gas emissions reductions, the EU aims to become the world’s first climate-neutral economy by 2050. However, meeting the climate change challenge appears complex in the process of European differentiated integration, the (still) problematic 2004 enlargement to include former communist countries, as well as Brexit and the economic downturn caused by the Covid-19 pandemic. The EU offers an interesting combination of different federal features although it has not yet been recognized as a federation. Also, EU climate governance development is the product of peculiar federal dynamics and characteristics, namely: the favourable context for decentralized and experimental policymaking; the enhanced prospects for triggering dynamic processes of policy diffusion; and the availability of multiple levels and forums for policymaking. In this realm, however, a number of knots still need to be disentangled, as Member States’ diverging priorities on energy and sometimes conflicting positions on mitigation targets make intergovernmental decision-making in climate policy increasingly difficult. In addition, policy fragmentation and poor or delayed implementation of EU legislation by Member States remain a critical issue.