HAVET & VANHUFFEL – Association d’avocats
The Commission’s communication on January 29, 2025 entitled « A competitiveness Compass for the EU » is the first general policy communication from the Commission to the European Parliament and the European Council since the installation of the new Commission.
Based on the Draghi report, the Commission defines in its communication to the European Parliament and the Council an approach and a series of flagship measures to translate into concrete actions the three essential imperatives to regain competitiveness: innovation, decarbonization and security.
- Innovation as a driving force for competitiveness: If the European Union wants to close its gap with other economies, it must create a favorable environment for young innovative start-ups, promote industrial primacy in high-growth sectors based on technology. disruption and encourage the diffusion of technologies within established companies and SMEs. The Commission will propose texts relating to the manufacturing and use of artificial intelligence in order to stimulate its development in key sectors. It will tackle the obstacles that prevent the emergence and expansion of new businesses. A proposal to simplify applicable administrative rules, including relevant aspects of company law, insolvency, labor and taxation, and will reduce the costs of insolvencies. This will allow innovative companies to benefit from a single set of rules when investing and operating anywhere in the single market.
- Decarbonization focused on competitiveness: The objective is to take advantage of high and volatile energy prices to make the European Union an attractive region for clean energy manufacturing, which will facilitate access to clean and affordable energy. The future Clean Industry Park will aim to promote clean technologies and new circular business models. A Sustainable Energy Action Plan is expected to drive down the prices and costs of clean energy. Regulations aimed at accelerating the decarbonization of industry will support accelerated permitting for sectors in transition. In addition, the Commission’s program provides tailor-made action plans for certain energy-intensive sectors such as steel, metals and chemicals, sectors which constitute the backbone of the European manufacturing system but are the most vulnerable in this transition phase.
- A reduction in dependencies from abroad and a strengthening of security of supply: The European Union will have to diversify and reduce its dependence on third countries. To do this, it will have to sign new partnerships. While it already has the largest and fastest growing network of trade agreements in the world, the European Union will need to continue to diversify and strengthen its supply chains. These partnerships will involve clean trade and investment contributing to security of supply of raw materials, clean energy, sustainable transport fuels and clean technologies from around the world. Within the internal market, the review of public procurement rules will introduce a European preference when awarding public contracts for critical sectors and technologies.
A large part of the communication therefore concerns the decarbonization of the economy. We are seeing a shift from the “Green deal” to the “Clean industrial deal”.
The main emphasis is on the desire to make Europe competitive. In this context, the Commission’s desire provides that one of the axes of restoring the competitiveness of companies and positioning itself on decarbonization policies as a driver of this decarbonization, which involves maintaining a framework to become a carbon-free economy in 2050.
The Draghi report shows that decarbonization policies are a powerful engine of growth when they are well integrated into industrial, competition, economic and trade policies. Therefore these objectives can boost competitiveness if objectives and policies are well aligned, as it provides certainty and predictability to businesses and investors. The commission will take the initiative to create a « Clean Industrial Deal », the aim of which is to give the European Union an attractive location for even energy-intensive manufacturing, and to promote clean technologies and new business models circulars.
The Commission finds that energy prices are much higher in Europe than in competing regions and vary considerably across the European Union. It relies on fossil fuel imports for almost two-thirds of its energy and Russia’s price manipulation is the main driver of recent price spikes. Europe must therefore accelerate the clean energy transition and promote electrification but also mitigate these high prices in the short term, through management of network tariffs and taxation and through better integration of the energy market. To do this, the Commission will establish the Affordable Energy Action Plan.
An essential element of this plan is to invest in European networks, to support and progress towards a net zero energy system. This plan will promote investment in the modernization and expansion of its energy transmission and distribution network and storage system, accelerating investments in electricity, hydrogen and carbon dioxide transport networks as well as storage systems.
To move the economy towards clean production and circularity, the EU must develop lead markets and policies to reward early movers. It will take measures to promote demand for low-carbon products in its market, such as benchmarking/labelling, etc. Along with demand incentives, clean technology producers need help translating innovative activity into manufacturing leadership. Better supporting companies, particularly those with high energy consumption, in their efforts to switch to clean technologies requires a flexible and favorable state aid framework.
As part of the Clean Industrial Deal, the Commission will explain how well-targeted and simplified support can encourage more investments for decarbonization, while avoiding market distortions. In the same spirit, the Commission will invite Member States to ensure that elements of their tax system which impact on private investment incentives, such as depreciation rules and tax credits, are conducive to a business case for clean production.
To support their transition from energy-intensive businesses, tailor-made action plans for some of them will be presented following the Clean Industrial Deal, based on close dialogue and consultation with the parties. stakeholders. Neutrality in mobility and technology is essential for competitiveness. The Commission has launched the strategic dialogue with the automotive sector to urgently respond to the current challenges and design concrete strategies and solutions to ensure that this key industry has a strong future in Europe.
At the same time, the Commission will present a sustainable transport investment plan with additional measures to reduce risks, investments needed to rapidly accelerate charging infrastructure and the production and distribution of renewable and low-carbon transport fuels.
To protect and promote clean technologies and low-carbon manufacturing in the EU, the Clean Industrial Agreement and its deliverables will mobilize different policy levers in a coordinated manner, from facilitations in terms of permits and authorizations, to incentives for industrial policy, from reformed public procurement rules to trade defense instruments, from targeted global projects Bridging investments and international partnerships for expanded market access.
A part of this communication concerns other environmental issues.
The European Union’s vision for agriculture and food production should define how to ensure competitiveness and long-term sustainability within planetary limits for the sector The European Oceans Pact will allow Europe to take advantage of its vast maritime and coastal space to stimulate innovation through new blue technologies, clean energy production and food security.
Measures should be proposed to harness the potential of the circular economy, so that the European remanufacturing market is expected to grow from its current value of €31 billion to €100 billion by 2030, creating 500,000 new jobs.
Europe should aim to create a single market for waste, secondary and reusable materials, to increase efficiency and expand recycling. A bill on the circular economy should be proposed.
Fifteen flagship actions are planned to implement this second pillar of the communication policy :
- Clean Industrial Deal and an Action Plan on Affordable Energy [Q1 2025]
- Industrial Decarbonisation Accelerator Act [Q4 2025]
- Electrification Action Plan and European Grids Package [Q1 2026]
- New State Aid Framework [Q2 2025]
- Steel and metals action plan [2025]
- Chemicals industry package [Q4 2025]
- Strategic dialogue on the future of the European automotive industry and Industrial Action Plan [Q1 2025]
- Sustainable Transport Investment Plan [Q3 2025]
- European Port Strategy and Industrial Maritime Strategy [2025]
- High Speed Rail Plan [2025]
- Carbon Border Adjustment Mechanism Review [2025]
- Circular Economy Act [Q4 2026]
- Vision for Agriculture and Food [Q1 2025]
- Oceans Pact [Q2 2025]
- Amendment of the Climate Law [2025]
In the 5 catalysts for competitiveness provided for in the program proposed by the Commission which are the simplification of the regulatory and administrative burden, the reduction of obstacles to the single market, the financing of competitiveness by an European single market for capital, the promotion of skills and quality jobs and the better coordination of policies at the levels, certain elements affect the environment.
Regarding simplification, the catalyst aims to significantly reduce the regulatory and administrative burden, the « omnibus » proposal will simplify the publication of the information to be communicated, the duty of care and the taxonomy in matters of sustainability. Regarding financing competitiveness, the Commission will present a European Savings and Investment Union with the aim of creating new savings and investment products, encouraging venture capital investments and ensure that investments flow seamlessly across the EU.
These products will be intended in particular to provide the capital necessary to achieve the sustainable industrial transition.
The full communication from the Commission to the European Parliament and Council is available via the following link : https://commission.europa.eu/document/download/10017eb1-4722-4333-add2-e0ed18105a34_en.
