Europe’s Green Policies and Industrial Competitiveness: Is the Transition Becoming an Economic Risk?
🏭 Category: Economy and Business
Subtitle: Energy security, industrial production and climate objectives must be reconciled. Europe cannot afford a transition that weakens its businesses without rigorously measuring the costs, benefits and global impact of its policies.
By Luigi Carfora
President of Confimi Industria Campania
President of Consorzio Suggestioni Campane Promotion
The energy debate is also a debate about Europe's economic future
Europe faces a fundamental strategic question: can it pursue its environmental objectives while preserving its industrial capacity, economic competitiveness and energy security?
The debate over Russian diesel supplies brings this dilemma into sharp focus. Energy is not simply an environmental or geopolitical issue. It is a fundamental input for manufacturing, transport, logistics, agriculture and thousands of small and medium-sized enterprises.
When energy becomes more expensive or less reliable, production costs rise, margins shrink and investment decisions become more difficult. For businesses operating in international markets, these additional costs can translate directly into a competitive disadvantage.
The European Commission itself has acknowledged that industrial gas and electricity prices remain significantly higher than those of major international competitors, creating serious challenges for energy-intensive industries. European Commission — Energy Prices and Costs in Europe.
This is not an abstract concern. It affects the ability of European companies to invest, innovate, maintain employment and compete globally.
The risk of an ideologically driven transition
Environmental protection is a legitimate objective. The question is whether the policies adopted to achieve it are economically sustainable, technologically balanced and supported by transparent evidence.
In my view, Europe has too often approached the green transition through a regulatory framework that risks prioritising predetermined targets over the practical conditions in which businesses operate.
A transition becomes counterproductive when companies are required to absorb rapidly increasing compliance costs, energy expenses and investment obligations without adequate infrastructure, affordable alternatives or sufficient time to adapt.
The risk is particularly serious for small and medium-sized enterprises, which generally have fewer financial resources than large multinational corporations and less capacity to absorb sudden increases in operating costs.
A policy cannot be considered successful simply because it establishes an ambitious target. Its real effectiveness must be assessed against measurable outcomes, economic costs and the consequences for European production.
Climate policy must remain open to scientific scrutiny
Climate change and environmental protection require serious scientific investigation, reliable observations and continuous evaluation. They should not become subjects of ideological confrontation in which questioning a particular policy is confused with rejecting science.
Historical climate records, long-term observations and scientific models are essential to understanding climate trends. They must be examined rigorously, including their uncertainties, limitations and implications for public policy.
For this reason, I believe that European climate measures should be assessed through transparent, independent and repeatable evaluations. Such assessments should establish whether individual policies deliver the expected environmental benefits, at what cost and with what consequences for industrial competitiveness.
It is important to distinguish between two questions: whether greenhouse gas emissions are declining, and whether every specific measure adopted to reduce them is proportionate, effective and economically justified.
Official European Environment Agency data show that EU net domestic greenhouse gas emissions fell by approximately 40% between 1990 and 2024. That result should be acknowledged. It does not, however, eliminate the need to evaluate the effectiveness and economic consequences of individual policies, nor does it mean that European action alone can determine global climate outcomes.
https://www.eea.europa.eu/en/analysis/publications/key-trends-and-drivers-in-ghg-emissions-in-the-eu">European Environment Agency — Key Trends and Drivers in EU Greenhouse Gas Emissions</a>.
The real question is therefore not whether environmental objectives matter, but how they can be pursued without undermining Europe's productive foundations.
Energy security cannot be separated from industrial policy
The discussion about Russian diesel illustrates the consequences of treating energy supplies primarily through a geopolitical or regulatory lens without adequately considering the structure of the European industrial system.
Europe's dependence on external energy supplies is also connected to its own production capacity, infrastructure, refining sector and investment decisions.
When domestic capacity contracts and alternative supplies become more expensive or uncertain, imports become increasingly important. Sanctions and restrictions must therefore be evaluated not only in terms of their political objectives, but also in terms of their effectiveness, economic costs and possible unintended consequences.
The objective should not be to imitate the policies of another country. It should be to develop a coherent European strategy that safeguards energy supplies, supports competitive prices and protects the capacity to manufacture goods in Europe.
An effective industrial energy policy should include:
Energy affordability: reducing the cost burden on businesses and households.
Security of supply: diversifying sources while maintaining adequate production and infrastructure.
Technological neutrality: allowing different technologies to compete according to their effectiveness, reliability and environmental performance.
Industrial competitiveness: assessing the consequences of regulation for investment, production and employment.
Transparent evaluation: publishing measurable indicators of both environmental outcomes and economic costs.
These principles are not incompatible with environmental objectives. They are necessary to make the transition economically and socially sustainable.
European businesses cannot be asked to pay without a clear assessment of the benefits
The future of European industry depends on the ability to combine innovation and environmental responsibility with affordable energy and a stable regulatory environment.
If production becomes increasingly expensive in Europe, some businesses may reduce investment, relocate activities or lose market share to competitors operating under different economic and regulatory conditions.
In such circumstances, Europe could risk reducing emissions within its borders while increasing its reliance on imported goods produced elsewhere. The actual global environmental impact would then need to be assessed across the entire supply chain, rather than through domestic emissions figures alone.
This is why climate policy should include an assessment of industrial relocation, imported emissions, energy costs and the resilience of strategic supply chains.
The transition must be judged by its actual results, not merely by the intentions behind it.
A pragmatic approach: sustainability must include the economy
Europe needs an energy and industrial strategy capable of reconciling environmental protection, economic growth, social stability and geopolitical independence.
This requires a more pragmatic approach: fewer assumptions that regulation alone can deliver the desired outcome, more technological flexibility, greater attention to industrial realities and systematic measurement of the results.
Environmental objectives should be pursued through policies that are effective, proportionate and compatible with a competitive productive system.
Europe cannot defend its future by weakening the businesses that sustain its economy. Economic sustainability is not an alternative to environmental sustainability; it is one of the conditions for achieving it over the long term.
The challenge for European institutions is clear: build a transition that delivers verifiable environmental benefits without sacrificing industrial capacity, employment and economic independence.
That is the standard against which European energy and climate policies should be judged.
Luigi Carfora
President of Confimi Industria Campania
President of Consorzio Suggestioni Campane Promotion
