Clean tech at heart of Europe’s competitiveness strategy
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The European Commission’s ‘Competitiveness Compass’ highlights clean technologies as a key driver of decarbonisation and competitiveness.
The ‘Competitiveness Compass’, which is intended as a policy manual for the new Commission’s legislative mandate, is focussed on establishing competitiveness as one of its overarching principles for action over the next five years.
It comes in the wake of the Draghi report, with its three key imperatives to boost European competitiveness and with the aim to put these into action.
Broadly the focus is on simplifying regulatory and administrative burdens, lowering barriers to the single market, financing competitiveness and promoting skills.
Better coordination of policies at the EU and national levels also is planned.
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Decarbonisation and competitiveness
At the centre of the imperatives is a joint roadmap for decarbonisation and competitiveness, with the high and volatile energy prices a top issue.
Reducing dependency on Russia gas is one factor but as it takes time, the EU must accelerate the clean energy transition and promote electrification, while in the short term issues that can be tackled include inefficiencies in the design of network tariffs and taxation or a lack of energy market integration.
These issues and others such as investment in Europe’s grids are planned to be addressed in the affordable energy action plan due before the end of Q1.
This will be followed with an electrification action plan and European grids package due in Q1 2026.
With energy intensive sectors presenting a particular challenge, a clean industrial deal is due by the end of Q1, along with sector specific action plans for steel and metals also in Q1 2025, for sustainable transport in Q3 2025 and for the chemicals industry in Q4 2025.
Industrial carbon emissions also will be reviewed in 2025 and a circular economy act is envisaged in Q4 2026.
Innovation
The focus of the innovation imperative is to close the ‘innovation gap’ with countries such as the US and China as while Europe’s share of global patents is similar to these, only one-third of the patents are commercially exploited.
Plans are a dedicated EU startup and scale-up strategy, the availability of financing for companies to grow and a new focus on raising R&D spending and coordinating it on high impact projects.
Europe also needs computing, cloud and data infrastructure for AI.
Underpinning these is a European innovation act due in Q4 2025 or Q1 2026 and a research area act in 2026, with sector specific legislation due in areas including cloud and AI development, quantum, life science, advanced materials and space, while AI gigafactories also are being implemented to drive the industrial adoption of AI.
Security and resilience
The third imperative of reducing excessive dependencies and increasing security rests on the global connections around the world, with trade with third countries a key driver for the region’s prosperity.
The ability to diversify will hinge on effective partnerships and where unfair competition threatens the single market, the protective tools at disposal should be used.
Actions proposed include implementing trade agreements with economies around the world, a trans-Mediterranean energy and clean tech cooperation and a joint purchasing platform for critical raw minerals.
A water resilience strategy is scheduled for Q2 2025 and a European climate adaptation plan for 2026.
Industry reaction
Layla Sawyer, Secretary General of CurrENT, in a statement highlighted the number one challenge for technology companies as going from pilots to wide-spread deployment.
“Many of our members are currently choosing to prioritise investments outside of the EU, to the detriment of European competitiveness,” she noted.
Commenting for Eurelectric, Policy Director Cillian O’Donoghue said the organisation welcomes the call for deeper market integration, incentives for long-term contracts and the implementation of the grid action plan.
“These measures all play to Europe’s strengths and will aid our global competitiveness.”
Commenting in a Linkedin post on the need for simplified policies, Schneider Electric’s Gwenaelle Avice Huet, Executive Vice President of Europe Operations and a member of the Executive Committee, said:
“Confidence across Europe has been knocked in the past year, and the continent needs to change the narrative on what can be achieved in order to give people reasons to be optimistic.
“We need to see simplified policies that promote a business-friendly environment, removing blockers to progress and empowering industry to drive collective growth.”
Commenting on the necessity of tech-open policy over Linkedin, said EUTurbines, the European Association of Gas and Steam Turbine Manufacturers:
“We welcome the right analysis, but let’s get it right.
“We can power a secure and flexible energy future – but policies must remain technology-open, supporting all solutions that contribute to decarbonisation and competitiveness.”
Originally published on Enlit.World
