The challenges associated with environmental sustainability and greenhouse gas emissions are increasingly affecting policy making and global economic activity. Since energy use accounts for eighty percent of all greenhouse gas emissions in Europe, the European Union is determined to fight against climate change and reduce emissions by at least twenty percent in 2020. Although information and communication technologies (ICT) account for approximately two percent of global CO2 emissions, they can significantly contribute to reducing the ninety-eight percent of CO2 emissions caused by other activities. This requires the ICT sector to lead developments towards environmental sustainability. The paper provides an overview of the European policy landscape (regulations, incentives) with a particular emphasis on issues pertaining to the role of ICT in reducing the CO2 footprint of manufacturing.