Today’s launch of the European Commission’s Competitiveness Compass risks becoming a victory for polluting industries at the expense of workers, the environment, and future prosperity. While the communication acknowledges the importance of the green transition, decarbonisation, circularity, and tackling mounting climate impacts, its proposed actions remain too vague to deliver the urgency and ambition required.
“The Competitiveness Compass gets it fundamentally wrong by framing the EU’s green transition as being at odds with economic growth,” said Ester Asin, Director of WWF’s European Policy Office. “True competitiveness lies in rapid decarbonisation, restoring nature, and scaling up green technologies, not in blind deregulation that consolidates the market position of polluting industries.”
The Compass adds to the new trend of prioritising deregulation, which risks undermining the EU’s ability to create a successful, sustainable economy. Its focus on “cutting red tape” could delay or weaken critical legislation, including sustainable finance frameworks. Such measures create uncertainty for businesses already investing in green innovation and further jeopardise the EU’s long-term economic and environmental future.
Europe lags behind in the green race as politicians have dragged their feet for decades on the necessary economic transformation and investments at scale in the green technologies of the future. The compass risks repeating and thus perpetuating these same mistakes.
“By emphasising deregulation over decarbonisation and the implementation of environmental laws, the Commission sends the wrong message to investors and industry, especially the ones that already invested in the green transition,” added Ester Asin. “By taking aim at the recently agreed corporate sustainability reporting framework, re-confirming its ill-conceived omnibus package, and hinting at further deregulation across critical policy areas, the Commission threatens to undermine progress on the green transition.”
WWF calls on the European Commission to reorient its Compass by:
- Providing stability and predictability by maintaining and smartly implementing current sustainability frameworks – rather than revising them unnecessarily and exempting large numbers of companies from clear oversight.
- Investing boldly in proven green technologies to accelerate the transition and reduce fossil fuel dependency.
- Ensuring public funding delivers measurable social and environmental benefits, prioritising sectors critical to the green transition.
Decarbonising the EU economy requires investing in proven technologies like wind, solar, heat pumps, batteries, grids, and renewable hydrogen, alongside storage solutions, to reduce fossil fuel dependency. By promoting ‘technology neutrality,’ the Commission risks diverting scarce funds to unproven solutions, undermining the scaling up of green technologies vital for Europe’s industrial future.
Public investments, particularly through the EU budget, are vital for the green transition, but the Competitiveness Compass falls short. Its centerpiece, the European Competitiveness Fund, risks repeating past mistakes by becoming a free-for-all for large companies instead of targeting green transition sectors with high social and environmental benefits, and essential spending to support nature, climate mitigation, and adaptation—key to a secure and resilient EU.
“Europe’s future depends on aligning competitiveness with climate action and healthy nature. The proposed Compass fails to do so. Without urgent course correction, the EU risks falling further behind in the global green race and worsening climate impacts for its citizens,” concludes Ester Asin.
