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The European Climate Neutrality Observatory (ECNO) finds that while the EU is generally moving in the right direction toward its 2050 climate neutrality goal, the pace of change is too slow across most sectors. Governance is the only building block currently assessed as 'on track', while finance and carbon dioxide removals are moving in the 'wrong direction'. Significant gaps exist in the agricultural sector, where policies have supported intensive animal agriculture, and in external action, where the EU's 'climate bank' continues to finance fossil fuels abroad.