Decarbonisation Imperative for EU Competitiveness

This technical report discusses the critical need for decarbonisation in the European Union (EU) to enhance competitiveness, as outlined in the Draghi Report. It highlights the significant energy cost disparities between European and US companies, exacerbated by geopolitical factors such as the war in Ukraine. The report details the EU's Clean Industrial Deal (CID), which aims to mobilise substantial investments for clean manufacturing while addressing the challenges of financing. It presents data from the 2024 European Investment Bank’s Investment Survey, illustrating obstacles faced by firms in both the EU and the US regarding energy costs and investment uncertainties. The report also examines the implications of trade-distorting policies on environmental goods and the competitive landscape in clean technologies, particularly in relation to China. Furthermore, it outlines the EU's commitments to reduce greenhouse gas emissions by at least 55% by 2030, while identifying existing gaps in achieving these targets and the need for additional measures to meet energy efficiency and renewable energy goals.