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Beside the discussion on defence and the support of Ukraine, the most recent EU summit showed a unanimous agreement from all leaders to boost the bloc’s competitiveness, cutting red tape and integrating the single market for energy and capital.

As the 2025 Progress Report on the Competitiveness of Clean Energy Technologies highlights, clean energy technologies remain highly cost competitive in Europe, but EU manufacturers are facing challenges to their global competitiveness. According to the European Commission, despite having a leading role historically in developing net-zero technologies, issues such as high energy prices, supply chain dependencies and labour shortages are impacting the competitiveness of the EU. Tackling these challenges will be pivotal for the sector. Tapping into the potential of net-zero technologies will in turn help to shape a more resilient, secure and affordable energy system, the Commission concludes.

The focus on competitiveness and energy has gained deep relevance in the European Union as a whole and in the economies of the member states. Higher energy prices in the EU compared to other industrialised economies, such as the United States, present a fundamental competitiveness challenge. This disparity is largely due to the EU’s reliance on imported fossil fuels, whereas the US is a net exporter of energy, despite the recent approach to the green transition and the decision to cut supplies from Russia. Uneven vulnerabilities across countries, due to differences in energy mix and sources of imported and domestic energy supply, jeopardised further efforts to compete on the global stage. Another liability is represented by the fragmentation of the internal energy market and limited degree of electricity market integration and interconnection between EU countries.

To address all these challenges, since the last decade the EU has been focusing on strengthening the competitiveness of its clean energy sector, as building up Europe’s capacity to produce and use renewable energy is considered essential for ensuring that the bloc remains competitive on the industrial level. Moreover, such a dynamic not only brings economic benefits but also contributes to a more resilient, independent, secure, and affordable energy system in Europe.

A more integrated energy market would bring down prices, as well as the dispersion effects and the general volatility of the sector. With an accelerated adoption of renewables and other low-carbon technologies focused on lowering energy costs and achieving climate goals, the EU could find a model to leverage the falling costs of renewables generation and storage, which applies especially for solar and batteries. At the same time, to have an efficient renewables system, the EU needs at the same time an integrated and robust electricity system, which can better balance the supply and the demand across member countries, reducing reliance on costly backup power plants and storage. According to some studies, the cost savings made possible by the shift to renewables and a potential further electricity market integration could reach around 40 billion euros annually by 2030.

The EU should also continue to invest in research and innovation, as over 35% of the greenhouse gas emission reductions that are expected by 2050 require technologies which are not yet ready for the European market. Thus, as in other sectors, the EU needs to find room for further investments in R&D if the bloc wishes to maintain its competitive edge while supporting its clean energy manufacturing industry.

Written by: Francesco Marino