The European Union is sending a clear signal: climate policy is no longer just an environmental vision. It is becoming a core pillar of economic strategy. The latest State of the Energy Union 2025 and Climate Action Progress Report 2025 confirm that competitiveness is now Brussels’ top priority. In this framework, decarbonisation is positioned as a tool to strengthen Europe’s technological sovereignty, stability, and energy affordability.
The reports, published last November, show a clear shift. Competitiveness of the European economy is moving to the forefront, while decarbonisation is framed as an enabler rather than a burden. The main objectives include accelerating investments, cutting red tape, and lowering energy costs. The EU also plans to reduce administrative burdens by at least 25%, and by up to 35% for SMEs.
The EU is on track to meet its 2030 climate target. In 2024, greenhouse gas emissions fell by 2.5% year-on-year and are now more than 37% below 1990 levels. At the same time, EU GDP has grown by 71%, confirming the continued decoupling of economic growth from emissions.
Renewables are expanding rapidly. In 2024, 47% of EU electricity came from clean sources, with around 77 GW of new renewable capacity installed. Energy consumption continues to decline, particularly in households and industry.
However, energy prices in Europe remain higher than those of major global competitors, threatening industrial performance and overall competitiveness. This is why the European Commission is prioritising rapid price reductions through the Affordable Energy Action Plan and the Clean Industrial Deal.
Concrete measures include the involvement of the European Investment Bank, which is launching €1.5 billion in guarantee schemes for manufacturers of grid components and pilot support for long-term clean electricity contracts (PPAs). The goal is to provide price stability and unlock private investment.
The next decade will be decisive. The EU is committed to climate neutrality by 2050 and is preparing a new 2040 target of a 90% emissions reduction compared to 1990. This will require massive investment — especially in electrification, grids, innovation, and energy efficiency. The Commission estimates that up to €695 billion per year will need to be mobilised between 2031 and 2040 for energy-related investments. The new Multiannual Financial Framework will therefore prioritise cross-border infrastructure and strategic clean technologies.
The Commission has also proposed the European Grids Package, aimed at reinforcing electricity networks and accelerating renewable deployment. Currently under discussion in the European Parliament, the package introduces practical measures to shorten grid connection queues, prevent new bottlenecks, and address speculative or poorly prepared projects that block infrastructure capacity.
The focus is on strategic capacity planning, faster permitting procedures, and clear, transparent, and fair grid connection rules to ensure equal access. A non-binding methodology for more efficient grid use has already been issued to help Member States, regulators, and operators manage long waiting times.
EU climate policy is no longer treated purely as an environmental agenda. It is evolving into a full-scale industrial and security strategy designed to secure affordable energy, a strong industrial base, and technological sovereignty. Competitiveness, energy security, and decarbonisation are now advancing together.
In the first quarter of this year, the EU plans to introduce the so-called “28th regime” and a proposal for an EU Industrial Accelerator Act. A European Electrification Strategy is also in preparation, setting priorities for industry, heating and cooling, transport infrastructure, and flexibility management. In the second quarter, reforms in public procurement are expected, alongside a new energy omnibus package.
This is a key moment to revive postponed investments in renewables, battery storage, e-mobility, and clean technologies. Electrification is emerging as the strategic backbone of EU industrial and security policy. The rapid expansion of artificial intelligence and data centres is expected to drive a sharp increase in electricity demand in the coming years.
The question is no longer whether these changes will happen, but how to leverage them effectively.
The expert group Frank Bold recommends developing an internal electrification roadmap that integrates heating systems, industrial technologies, and e-mobility infrastructure within a broader decarbonisation strategy. Beyond assessing grid connection capacity, companies should invest in flexibility solutions such as battery storage, demand forecasting, smart consumption management, and consider price stabilisation through PPAs.
Active participation in innovation ecosystems can also open access to continued EU support, which increasingly favours high value-added projects. Planned measures include cheaper energy for industry and targeted support for key sectors such as heat pumps, batteries, cables, clean technologies, and energy digitalisation.
Electrification is becoming the strategic backbone of EU policy. The real challenge is not whether the transformation will occur, but how to turn it into a competitive advantage.
As the EU navigates a critical period for its economic and environmental future, recent developments expose a troubling disconnect between political promises and policy action. What should we expect from our elected leaders when the foundations of sustainable competitiveness are being dismantled?
This legal briefing provides a detailed overview of the purpose, requirements, timeline, and most importantly, key interactions between different sustainability laws that will apply to companies operating in the European Union.
Speech by Filip Gregor at the public hearing on Reporting Obligations, held by the European Parliament's Committee on Legal Affairs on 13th May 2025
