Clean energy competitiveness
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Clean energy competitiveness

Strengthening the competitiveness of the EU in clean energy technologies will help increase Europe’s technological sovereignty and shape a more resilient energy system.

The EU is currently facing technological and non-technological challenges, such as high energy prices, critical raw materials supply chain disruptions and skills shortages. Considering that 35% of the greenhouse gas emission reductions expected by 2050 require technologies that are not yet ready for the market, research and innovation activities are crucial to supply the technologies needed for the green and digital energy transition and to deliver on the European Green Deal and REPowerEU objectives.

The Competitiveness Compass is the Commission’s roadmap, presented in January 2025, to boost economic growth, close the innovation gap and reduce dependencies. One of its 3 core areas for action is decarbonisation and competitiveness. This pillar includes initiatives such as the Clean Industrial Deal and an Affordable Energy Action Plan and foresees tailor-made action plans for energy intensive sectors, such as steel, metals and chemicals.

Competitiveness progress reports

Since 2020, the Commission publishes yearly progress reports on the competitiveness of clean energy technologies and their manufacturers, presenting the current and projected state of play, in accordance with Article 35 of the Governance Regulation (EU/2018/1999).

They also map the research, innovation and competitiveness aspects of the EU’s clean energy system as a whole, with the aim of informing policy decisions and helping to make the EU competitive, resilient and climate-neutral by 2050.

© AdobeStock: anatoliy_gleb

The 2025 Competitiveness Progress Report provides a snapshot of the trends and challenges of net-zero technologies and their manufacturing in the EU, building on the Competitiveness Compass and contributing to the implementation of the Net-Zero Industry Act, the Affordable Energy Action Plan, and the Clean Industrial Deal. 

It highlighted the main drivers, opportunities and barriers, including challenges, such as energy and material costs, value chain resilience, labour shortages and innovation. 

Overall, renewable energy sources continue to be highly cost competitive in the EU and have reached record deployment, providing 48% of electricity in the EU in 2024. In this regard, the report underlines the major economic opportunity net-zero technologies represent for the EU. At the same time, it shows that the EU is at risk of losing ground in terms of research and innovation, as well as the manufacturing of these technologies. 

Moreover, the report includes assessments of the competitiveness of the EU in key technologies covered in the Net-Zero Industry Act. This analysis shows how the EU remains well placed in the manufacturing of several net-zero technologies, for instance wind and heat pumps, while for others, there is great growth potential, or need targeted support to reach their commercial stage, such as ocean energy.

Two policy factsheets are available covering the main conclusions from the 2025 Competitiveness Progress Report.

In 2024, reporting on competitiveness was done through the ninth State of the Energy Union Report and the Clean Energy Technology Observatory reports. In addition, the topic was at the core of the report by Mario Draghi on the future of European competitiveness.

Older reports are available under Related links (at the bottom of this page). 

The Net-Zero Industry Act

The Net-Zero Industry Act (Regulation 2024/1735) was published and entered into force in June 2024. It was proposed by the Commission as part of of Europe’s Green Deal Industrial Plan. 

The Net-Zero Industry Act aims to strengthen the resilience and competitiveness of net-zero technologies in the EU, by making our energy system more secure, sustainable and affordable. It will create the right conditions to attract investments, support innovation (including through regulatory sandboxes) and ensure that at least 40% of the EU’s annual deployment needs for net-zero technologies are manufactured in the EU. It provides an EU roadmap to reduce Europe’s high dependency on imports from single suppliers of net-zero technologies. It will also help increase resilience in Europe’s clean energy supply chains.

On 24 January 2025, the Commission launched calls for feedback on the Net-Zero Industry Act secondary legislation, comprising the implementing act on no-price criteria in renewable energy auctions and the delegated act on primarily used components under the Net-Zero Industry Act. 

The Clean Energy Technology Observatory

The Clean Energy Technology Observatory (CETO) monitors EU research, innovation and competitiveness in clean energy technologies. The 2024 CETO reports were released in November 2024. 

One of the main goals of CETO to provide a repository of technological and socio-economic data on the most relevant technologies and their integration in the energy system. It targets in particular the status and outlook for innovative solutions and the sustainable market uptake of both mature and inventive technologies. The observatory builds on the previous work of the Low Carbon Energy Observatory. 

CETO produces a series of annual reports addressing technology maturity status, development and trends (2030-2050 and beyond), value chain analysis, global market and EU positioning, along with clean technology system integration. These reports provide the evidence-based analysis underpinning the Progress Report on Competitiveness of Clean Energy Technologies and support the implementation of the SET Plan and research policy development.

CETO was set up in January 2022, as a shared initiative between the Commission’s Joint Research Centre, the Directorate-General for Research and Innovation and the Directorate-General for Energy.