Get ready to engage in a series of policies coming from the EU to ensure that the European markets respond to your business needs when it comes to reducing regulatory burdens and achieving a more business-friendly landscape. The first legislative proposals are dropping on 26 February 2025!

On 29 January 2025, the European Commission published its Competitiveness Compass, a major strategy aimed at boosting Europe’s economic strength, reducing regulatory burdens, and reinforcing its global competitiveness. The plan, promised by European Commission President Ursula von der Leyen, builds on the Draghi Report’s recommendations, calling for urgent action to address Europe’s productivity gap, investment challenges, and economic dependencies. The Compass calls for stimulating innovation, streamlining regulations, and reinforcing Europe’s industrial and technological leadership. The end goal is to ensure that the EU remains competitive, while maintaining its commitments on sustainability and digital transformation.

The Competitiveness Compass is structured around three key priorities:

• Closing the innovation gap through better support for start-ups, venture capital, and R&D investment;
• Ensuring industrial decarbonisation aligns with economic policies, supporting clean technology and sustainable manufacturing;
• Strengthening Europe’s strategic autonomy by securing supply chains, reducing reliance on third-country suppliers, and ensuring access to critical raw materials.

To achieve these objectives, the European Commission has signalled it will introduce simplification measures, will increase efforts to integrate the Single Market, improve financing access for businesses, and will improve policy coordination between Member States.

For businesses, the Competitiveness Compass brings the hope of reduced red-tape, better access to finance and streamlined compliance procedures. However, achieving this goal will require businesses to speak-up and help shape the policies to ensure that policy ambition is matched with market reality.

With the first legislative proposals dropping on 26 February 2025, Europe’s businesses will need to be prepared to respond to and get involved in consultations, while tweaking their operational strategies to stay ahead. This is a chance to shape the rules, cut through the red tape, and turn policy shifts into new growth opportunities. The regulatory landscape is evolving, make sure you’re ready to move with it!

Here is our highlight of some of the flagship policies broken down by sector (please note all dates provided hereunder are subject to change):

Agri-food: the EU is working toward a long-term Vision for Agriculture and Food Production – setting vision for 2040 and guiding EU action as well as the reform of the Common Agriculture Policy. Accounting for around a third of the EU’s budget, CAP reform is no small task! This communication will need to balance competitiveness and sustainability, while also supporting food security and the resilience and profitability of farming as a profession. The leaked document suggests that farmers are not favoured for additional funds to support the yield losses they will need to bear from using less pesticides. Rather, it seems the EU may put measures in place that would squeeze the agrifood value chain margins, with consumers possibly paying the price.

With the push for organic and agroecological farming being coupled with the much awaited Bioeconomy Strategy and an underlying assumption that organic is safer, agrochemical companies will have an interest in defending the reputation of their technologies. They may want to also ensure that the EU understands that organic doesn’t always mean safer or better. Agri-food players will have an interest in ensuring that the EU also understands the compromises in efficacy and yields and therefore the potential implications for the EU’s food imports.

The Biotech Act covering genetically modified crops grown for human consumption and animal feed as well as their import, is finally coming. With pressure to ensure that the same standards apply to imported crops as those grown in Europe, this piece of legislation will have far reaching implications including for Brazilian growers exporting GMO soybean into Europe as well as agrochemical, seed and value chain players. It will also cover bio-based fertilisers.

Chemicals: the fundamental pillar of the EU’s chemicals legislation, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) Regulation, is being revised! The Commission will make a proposal this year and is expected to streamline chemical safety assessments and improve decision-making on hazardous substances. Questions remain over how it will balance consumer safety, environmental protection, and industry competitiveness and if ideological motives will prevail over market considerations. With REACH regulating the manufacturing and management of the use of chemicals, this will have a far-reaching affect from the ingredients used in paint to those used in cleaning products and pesticides. Will the EU become even more engrained in its hazard-based approach, or will it allow science to guide the level of exposure that would pose a risk to health?

Defence: the European Commission and the European External Action Service are preparing a White Paper on the Future of European Defence. The EU has been stepping up its work on defence by releasing the first ever European Defence Industrial Strategy in March last year, having its first-ever Commissioner for Defence and Space (Andrius Kubilius) and with the European Parliament’s subcommittee on Security and Defence having been upgraded to a stand-alone Committee. If it will yield a European Defence Union and the procurement rules that will be accompanied are yet to be seen. Given the proposed allocation of €1.5 billion from the EU budget until 2027 that’s already on the table, the way the Competitiveness Compass directs EU efforts to enhance industrial capacity, establish a Single Market for defence, and improve SME access to finance will be crucial. As the EU strives to create a European defence industry, it will need to balance ambition with the willingness of Member States to play ball.

Energy: the Affordable Energy Action Plan, set for Q1 2025, will introduce measures to increase access to low-cost energy for households and industrial consumers, ensuring energy affordability while supporting the EU’s green transition. Additionally, the Electrification Action Plan and European Grids Package, expected in Q1 2026, will focus on expanding and modernising electricity grids to accommodate increased demand for renewable energy, storage solutions, and cross-border electricity trade. These efforts will be complemented by the New State Aid Framework, due in Q2 2025, which aims to facilitate investment in clean energy projects and industrial decarbonisation. The private sector will want to keep a close eye on which technologies will come out on top as being considered as greener.

Environment: the Clean Industrial Deal is expected to be the first announcement and will come at the end of this month. For all those companies who have said their innovations can help drive a more sustainable Europe – this one is for you! And if you feel that the sustainability contributions of your innovations and products are not being sufficiently understood, now is your time to speak up and explain. This piece of legislation aims to enhance the competitiveness of Europe’s net-zero industries while expanding manufacturing capacity for green technologies, from hydrogen and chemicals to biotech and nanotech. It is expected to announce financial support while also enabling clean trade relations. It is yet to be seen if it will genuinely enable Europe to lead the clean-tech race. Especially given that other global markets like the USA, China and India are already leading with massive investments in clean technology and less regulatory barriers. Also, how the deal balances a pro-industry and pro-trade approach with environmental considerations will determine if it enhances or curtails EU markets.

The Circular Economy Act, set for Q4 2026, is expected to focus on investment in recycling capacity, encourage the substitution of virgin materials with secondary raw materials, and reduce landfilling and incineration. This will be accompanied by the rollout of eco-design requirements for key consumer products, and should align with existing legislation including the heavily-lobbied Packaging and Packaging Waste Regulation, as well as the Waste Framework Directive, which is currently undergoing inter-institutional negotiations. The pressure will be on the Commission to stick to its promise of less regulation for businesses, whilst also reducing Europe’s reliance on third countries especially when it comes to the market for waste and secondary raw materials. It is yet to be seen how the EU will balance ambition with realism and the financial incentives that will be introduced to support the way circular economy principles are brought to life.

Health: the emergencies brought on by the Covid-19 had a profound impact on health policymaking during the previous mandate, with the establishment of HERA and a key revision of the Pharmaceutical Legislation kicking off with aplomb. This new mandate seeks to take things a step further and has promised to deliver a Critical Medicines Act within 100 days of taking office. The Act, which will in large part take notes from the work of the Critical Medicines Alliance, which is currently finalising its strategic report. In this sense we can expect the act to focus on securing supply chains for key medicines, reducing dependencies, and addressing certain market failures to avoid the shortages which were felt at the height of the pandemic. This will include measures to strengthen Europe’s pharmaceutical production capacity and reduce reliance on non-EU suppliers, especially for API manufacturing and generic medicines production. Later during this mandate, with a view to bolstering of its leading sectors and key area of expertise, the Commission is expected to put forward a European Biotech Act in 2026. Together with the EU Bioeconomy Strategy – which will focus on expanding the bioeconomy market – the Biotech Act will provide a framework for health technology assessment and clinical trials for biomedicines.

Tech and digital: 2025 will be a landmark year for this space, with the Apply AI and Data Union strategies planned for Q3, and the Digital Network Act for Q4. ‘Apply AI’ will seek to boost new industrial uses of AI in key sectors including manufacturing, energy, pharmaceuticals, and financial services. The Data Union will facilitate the secure sharing of private and public data, which will help bring AI applications to life. The Digital Networks Act will aim to create the market and regulatory conditions necessary for the Union to update its digital and telecommunications infrastructure to improve connectivity for end-users and ensure European companies have the framework necessary to close the innovation gap. In parallel, this year the Commission will also seek to build on one of Europe’s core industrial strengths, building on the success of the Chips Act, the Quantum Strategy and Quantum Act (planned for Q2 & Q4, respectively) will address regulatory fragmentation and support further investment in European quantum computing to help better leverage the opportunities afforded by new tech.

Transport: a Sustainable Transport Investment Plan, expected in Q3 2025, will introduce measures to support investment in charging infrastructure and the production and distribution of renewable and low-carbon transport fuels, eagerly expected by hard to abate sectors like shipping and aviation. These efforts aim to accelerate the transition to greener transport, while ensuring affordability and accessibility. Additionally, the Industrial Action Plan for the Automotive Sector, set for Q1 2025, is expected to propose supply and demand-side incentives, including measures to encourage the greening of corporate fleets and a potential EU-wide subsidy scheme to improve competitiveness in the sector. The ongoing Strategic Dialogue on the Future of the Automotive Industry will certainly feed into this initiative, although heated debates are taking place on whether to amend the current emissions standards for cars and vans (particularly the targets and penalties for 2025). Finally, expectations are high from both industry and citizens for the Commission to deliver on its flagship rail initiatives, namely the consolidation of European high-speed network and Single Digital Booking and Ticketing Regulation.