A leaked document reveals Brussels’ strategy to bolster the European Union’s competitiveness through an intensified green agenda. The EU plans to double down on its decarbonisation policies, aiming to boost energy security and economic growth, despite concerns about their impact on businesses.
The draft of the “Competitiveness Compass,” set for official release on January 29, lays out a roadmap for the EU’s green push, emphasizing that decarbonisation can fuel growth if integrated effectively with industrial, economic, and trade policies. “Decarbonisation policies are a powerful driver of growth when they are well integrated with industrial, competition, economic and trade policies,” the document asserts.
Part of this strategy includes creating new rules and protections to support businesses in their transition to green practices. The EU intends to introduce “trade defence instruments” to level the playing field internationally, targeting countries that are less committed to reducing carbon emissions. These new measures will be rolled out between 2025 and 2026.
However, despite their green ambitions, Brussels has acknowledged the strain its policies have put on companies, particularly with the growing complexity of regulations. The Commission plans to ease this burden by simplifying reporting requirements, cutting obligations by 25% for most companies and 35% for Small to Medium Enterprises (SMEs). A new category of “small mid-caps” will also be introduced to further streamline regulations for businesses too large to qualify as SMEs but not as large as major corporations. This change will benefit over 31,000 companies, set to be introduced in February.
At the heart of these efforts is a push to deepen the EU’s Single Market, which Brussels believes is crucial to catching up with global competitors like China and the US. The document stresses the need for EU member states to act together, warning that failure to do so could lead to economic decline. “The window of opportunity is narrow. The EU must choose to act in unison for a future of sustainable prosperity or accept division and economic decline,” it concludes.
