Commissioners overseeing the portfolio, or parts thereof
- Teresa Ribera Rodríguez, Executive Vice-President (EVC) for Clean, Just and Competitive Transition
- Stéphane Séjourné, Executive Vice-President (EVC) for Prosperity and Industrial Strategy
- Henna Virkkunen, Executive Vice-President (EVC) for Tech Sovereignty, Security and Democracy
- Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth
- Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation
- Dan Jørgensen, Commissioner for Energy and Housing
Restoring economic competitiveness forms a core pillar of the Commission’s strategy over the next five years, especially in light of the findings of the two core reports that inform Commission thinking, namely the Draghi and Letta Reports. Many of the two reports’ proposals have been integrated in the Commission’s Political Guidelines.
Brussels worries that Europe is falling further behind the US in technological innovation and support to industry and China as a result of Beijing’s near-monopoly of vital raw materials necessary for chips and batteries. It therefore prioritizes the implementation of its growth strategy, the European Green Deal, to boost competitiveness and/through decarbonization. As the Draghi Report underlines, the EU aims at setting up a circular economy by enhancing resource efficiency in order to become less dependent on authoritarian regimes’ resource supply and strengthen its economic security. To do so effectively, the Commission will seek to increase investment in digital infrastructure, develop a new industrial strategy in support of EU firms, integrate its public procurement market to support start-ups, scale-ups, and SMEs and incentivize Important Projects of Common European Interest (IPCEIs) on cloud infrastructure, hydrogen technologies, batteries, microelectronics and new generation health services. IPCEIs, which are eligible for public financing and exempt from the Commission’s state aid rules that prohibit such support to maintain a level playing field, must involve at least four member states.
Core Priorities
The foremost priority of the new Commission will be to move towards net zero through enhancing the competitiveness of European industry. To do so, it will need to scale up Europe’s manufacturing capacity for net zero technologies and products, a market which is estimated to be worth $600 billion by 2030. The Green Deal Industrial Plan (GDIP), adopted in 2023, will be the vehicle to achieve those aims, and the Commissioner responsible for implementation is Teresa Ribera Rodríguez, Executive Vice President (EVP) for Clean, Just and Competitive Transition, alongside EVP for Prosperity and Industrial Strategy Stéphane Séjourné and Commissioner for Climate, Net Zero and Clean Growth Wopke Hoekstra. Achieving the goals of the GDIP goes through the Industrial Decarbonisation Accelerator Act, which aims at channeling investment in infrastructure and industry, in particular for energy intensive sectors and support lead markets for the development, production and diffusion of clean technologies.
To attract investment and create better conditions and market access for clean tech in the EU, the Commission will rely on implementing the Net Zero Industrial Act, aiming at reaching 40% of the Union's overall strategic net-zero technologies manufacturing capacity by 2030. Another legislative aspect of the GDIP is the European Critical Raw Materials Act, which identifies a list of critical raw materials and a list of strategic raw materials (gallium, lithium, boron, and tungsten) crucial for technologies for the green and digital transition, as well as for defense and space. The Act forms part of the EU Critical Raw Materials Platform to support joint purchasing and manage strategic stockpiles.
The Commission intends to combine the implementation of the GDIP with an attempt to bring down energy costs, since the Draghi Report underlined the harm caused to EU competitiveness by high energy prices. EVP Ribera Rodríguez is tasked with working alongside Commissioner for Energy and Housing Dan Jørgensen to bring down energy prices, ensure fair competition and foster the integration of gas and electricity markets in the EU through the Agency for the Cooperation of Energy Regulators (ACER). This forms part of the attempt to deepen and complete the Single Market by enhancing inter-operability and interconnectedness, while upscaling EU firms in the sectors that the “original” Single Market of the 1980s left out, namely energy, electronic communications, and financial services.
Stéphane Séjourné will be responsible for setting up the EU Competitiveness Fund (ECF), a Commission attempt to streamline existing and new funding programs (such as the European Innovation Council and the European Research Council) to boost Europe’s competitiveness by investing in strategic technologies such as artificial intelligence, clean industry, and biotech. Séjourné is expected to pair with the EVP for Tech Sovereignty, Security and Democracy Henna Virkkunen to implement the plan. Séjourné is also tasked to promote the advancement of the Capital Markets Union (CMU), a plan launched in 2015 that was lying dormant until recently. The Commission adopted the relevant Action Plan in 2020, and the new Commission will focus on delivering on the Plan’s three major pillars, namely facilitating financing for EU firms, making savings and investment safer in the EU and integrating national capital markets to protect investments and cut red tape.
The EU is currently lagging behind the United States and China in space research, and to bridge this gap, the EU Commission is considering increasing the European Space Agency's budget and empowering it to create an EU space industry ecosystem by assigning contracts to European private companies. The portfolio of the EU’s space policy is assigned to the new Commissioner for Defense Andrius Kubilius. Although the EU has taken legislative steps to leverage new technology and boost its competitive edge (the AI Act, the Data and Data Governance Act), it suffers from a lack of cyber skills that harm its economic security. The Commission has launched the Cybersecurity Skills Academy to reduce the shortage of cybersecurity professionals (estimated between 250,000 and 500,000 professionals), and Commissioner for Startups, Research and Innovation Zaharieva has been tasked with the creation of a European AI Research Council to pull together European resources in the area.
Transatlantic Cooperation & Engagement
- Clean energy: EU and US firms are working towards fully decarbonizing their power systems and building a transatlantic market for clean tech. Transatlantic alignment on standards and skills recognition in grid technologies and wind power are crucial for cost reduction and rapid deployment of clean energy technology. It would be beneficial for both the EU and US to achieve alignment on design standards for offshore wind. The discussion on standards could also include the shortage of high-voltage direct current (HVDC) engineering talent for original equipment manufacturers (OEMs). To ramp up production of equipment to meet HVDC demands, EU and US collaboration on training program for OEMs is critical. Stakeholders discussed an evolution of the Power Purchasing Agreements (PPA). PPAs are more common in the US where the energy market is more liberalized. Commission priorities on a new electricity market could lead to more stable long-term contracts such as PPAs, and the US’ experience could prove instructive for the EU.
- Batteries and critical minerals: US policymakers can engage with their EU counterparts, not least through the Transatlantic Trade and Technology Council (TTC), to jointly develop a regulatory framework in the battery sector to demonstrate transparency and sustainable sourcing of critical raw materials. They can do so on the basis of the common approach that the EU and United States have developed, namely a risk-based one, to avoid unnecessary barriers impeding recycling and circularity in the future. Concluding the 2023 EU-US Critical Minerals Agreement would be crucial, since this would deepen cooperation on diversifying critical mineral and EV battery supply chains, and allow critical minerals extracted or processed in the EU to count toward certain electric vehicle (EV) tax credit requirements of the US’ Inflation Reduction Act (IRA).
- Supply chains: The EU Critical Raw Materials Act and the US focus on semiconductor manufacturing under the CHIPS and Science Act underscore the importance of securing supply chains for essential materials and components. Policymakers from both sides of the Atlantic can build on the preparatory work undertaken by the TTC to boost their cooperation in setting up a more flexible supply chain network that will reduce their dependency on potentially malign geopolitical actors. Doing so through frequent consultations with firms is essential, since it is companies that will help guide policymakers to the most efficient pathways towards boosting resilience. One very concrete area where progress on supply chains can be made is reviving the EU idea, stemming from the COVID-19 period, of strategic reserves stockpiling for joint use and cooperation in crisis times.
