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The European Commission published its 2025 work programme on 11 February (the programme). The programme subtitled “Moving forward together: A Bolder, Simpler, Faster Union”, sets out the Commission’s goals to remove “structural brakes” on the EU’s competitiveness while remaining committed to a long-term goal of ensuring that Europe becomes the first climate-neutral continent by 2050. The programme follows on from the publication of the Commission’s “Competitiveness Compass” on 25 January.
The Competitiveness Compass is designed to transform into concrete action the recommendations of the Draghi report, published last year, that outlined the challenges to European competitiveness. It notes that Europe can no longer rely on many of the key factors that drove European economic growth in the past including an open global trade system, access to cheap fossil fuel energy and geopolitical stability. The Draghi report identified that Europe is in the process losing its growth engines at a time when serious investment is needed for economic modernisation, increased security and financing the transition to a greener economy.
Decarbonisation and competitiveness
The Competitiveness Compass notes that the EU has set a target of becoming a decarbonised, climate-neutral economy by 2050 with an intermediate target of being 90% decarbonised by 2040. Noting that the Draghi report emphasised that decarbonisation policies, when properly implemented, are a powerful driver of economic growth, the programme commits to implementing a “Clean Industrial Deal”. Details of the Clean Industrial Deal were published on 26 February which outline short-term strategies to ensure that European industry can grow while continuing to decarbonise. Strategies to make key industries throughout Europe more circular and sustainable while reducing compliance costs are included. As part of the Clean Industrial Deal, an Industrial Decarbonisation Accelerator Act has been introduced.
The programme commits to a roadmap towards ending Russian energy imports which will have the effect of both supporting decarbonisation by reducing reliance on fossil fuels as well as bringing down energy prices. The Competitiveness Compass notes that an Affordable Energy Action Plan, also published on 26 February, will introduce measures to give households and businesses wider access to low-cost forms of energy.
The Commission also intends to develop a new state aid framework to incentivise renewable energy, support its industrial decarbonisation efforts and facilitate the development of new “clean tech” initiatives.
As part of its focus on competitiveness, the Commission’s plans to simplify regulation in the EU. Both the Competitiveness Compass and the programme make reference to proposals that the Commission intends to introduce throughout 2025 including a number of omnibus packages. The first two omnibus packages, covering simplification of the rules in relation to sustainability and investments, were published on 26 February. Each of these packages of measures are intended to cut the “red tape” of overlapping, unnecessary or disproportionate rules that place burdens on EU companies and are intended to achieve a reduction in administrative burdens by 25% (and 35% in the case of small and medium-sized businesses).
Transport and agriculture
The Competitiveness Compass notes that, as well as the overall target of a fully climate neutral EU by 2050, there is an intermediate target of 2035 for climate neutrality for cars. To achieve this, the Commission proposes an industrial action plan for the automotive sector. Published on 5 March, the plan includes a proposal on greening corporate fleets. In addition, the Commission will put forward a Sustainable Transport Investment Plan to, among other things, increase availability of charging infrastructure and renewable and low-carbon transport fuels. The Commission also notes plans for a European high-speed rail network.
The programme looks forward to a “Vision for Agriculture and Food”, published in February, to provide a stable long-term framework for farmers ensuring long-term competitiveness and addressing sustainability issues including the need to provide for thriving rural areas and ongoing food security and resilience.
Sustainable water management is becoming an increasing source of concern for the EU as it struggles with the effects of climate change in terms of both floods and droughts. The programme commits to taking a “source to sea” approach to ensure water resilience throughout the continent and increase the competitiveness of the European water industry.
Circular economy
The Competitiveness Compass notes that the European remanufacturing market is projected to grow from a current value of €31bn to €100bn by 2030 with the addition of 500,000 new jobs. To support this growth, the Commission proposes a Circular Economy Act to support recycling capacity and reduce the role of landfill and incineration in dealing with Europe’s waste. This will be accompanied by implementation of eco-design requirements on important product groups.
Jobs and social fairness
Addressing the “S” in “ESG”, the Competitiveness Compass notes that the foundation of European competitiveness is its people. The Commission commits to implementing effective social policies based on the European Pillar of Social Rights and aims to ensure that all Europeans will be able to contribute to and benefit from greater competitiveness. The Commission acknowledges that Europe faces a shrinking working age population and commits to increase labour market participation by tackling barriers to women, young people and older citizens engaging in the labour market including ensuring fair working conditions, addressing work-life balance issues and improving access to affordable childcare.
For further information please contact Jill Shaw, ESG & Sustainability Lead, Laura Mulleady, Partner, Niall Guinan, Associate, or any other member of the ALG ESG & Sustainability team, or visit the ALG ESG webpage.
Date published: 26 March 2025
