By Gwenaelle Avice
Europe’s Clean Industrial Deal offers a historic opportunity to align decarbonization with economic growth. Gwenaelle Avice Huet, EVP of European Operations at Schneider Electric, explores how regulatory reform, innovation, and grid modernization must converge to strengthen competitiveness, accelerate the adoption of clean technology, and position Europe as a global leader in the energy transition.
We are only just reaching the halfway mark, but 2025 has already seen waves of sweeping policy reforms and changes across the globe. Amidst this moment of change, one thing is certain: growth is at the top of many agendas. I firmly believe decarbonization and growth go hand in hand. McKinsey research finds that ESG-related cost savings could impact profits by as much as 60%, highlighting how integral sustainability is to bolstering resiliency and competitiveness. While others are dampening sustainability pledges, Europe stands to gain a real competitive advantage by differentiating itself and accelerating progress in clean technology.
The Clean Industrial Deal, announced in February this year, represents Europe’s biggest opportunity yet to decarbonize industry, bring down energy prices, and drive competitiveness. But to achieve this, we need to see a shift in approach. Effective deployment requires policymakers to reduce regulatory burdens. Overly complex rules and long-term commitments have often served as an excuse for inaction. If Europe is to lead the green transition, immediate and tangible measures must replace bureaucratic delays.
Cutting bureaucracy to unleash growth
For our ambitions around competitiveness to become a reality, the EU needs to boost investment, productivity, and innovation across member states.
Take the EU’s Recovery and Resilience Facility as an example. Established in 2021 to drive post-pandemic recovery, its effectiveness has been hampered by complex implementation rules and varying administrative capacities across member states. While countries like France have disbursed around 75% of allocated funds, Germany has managed only 20%, and Italy 60%. In contrast, the U.S. Inflation Reduction Act streamlines environmental funding into a single program with a simplified application process, making investment faster and more efficient.
To prevent more examples like this from occurring, we need to adopt a unified approach to regulatory processes. While we want to allow member states to adopt, implement, and adapt legislation for their own needs, we need to be more closely aligned. Decluttering the regulatory books is also an important step forward. We’d suggest a one in, two out approach to any new policy frameworks, especially so that redundant rules can be removed.
Fostering a culture of innovation across Europe
We know electrification and digitalization are the core steps for the energy transition. While there’s been unquestionable progress over the last few years, shown by the EU’s domestic net greenhouse gas (GHG) emissions falling steadily, down by 37% compared to 1990 levels, we can do more and should go faster.
Clean technologies serve as the bedrock for the technologies needed to enable the green transition. The more we invest in these technologies, the more we should see economies of scale. The key to this: developing a culture of innovation across sectors. Increasing investment in R&D and startups while reducing unnecessary bureaucratic processes will facilitate this.
Strategies like the recent Clean Industrial Deal are great evidence that this is slowly becoming a reality, as it was announced that over €100 billion will be mobilised to support EU-made clean manufacturing.
This is a positive commitment, but Europe must also focus on scaling and implementing existing technologies to strengthen its energy infrastructure.
Strengthening Europe’s grids
The power outage that disrupted parts of Spain and Portugal in April underscores the growing importance of energy resilience. To ensure a robust and sustainable energy transition, Europe must strengthen its electricity grids through targeted infrastructure investment and accelerated digitalization.
In line with these needs, the Clean Industrial Deal includes an agreement with the European Investment Bank (EIB) to provide over €2 billion in guarantees. This move reinforces the central role of grid modernization and electrification in Europe’s industrial strategy, while also aiming to streamline regulations and accelerate the deployment of renewable energy. While the intent is clear and encouraging, the agreement remains non-binding. To translate ambition into impact, we need concrete actions supported by all member states.
Collaborative effort is essential
Going faster on home-grown solutions not only requires this investment into innovation, but also a culture of collaboration. Member states need to work alongside one another and encourage their internal industries to cooperate to drive progress.
As we collaborate, knowledge sharing on the best practices for decarbonizing the industry can also be shared. For example, adopting cost-effective energy measures through efficiency could see manufacturing industries nearly double the gross value added per unit of energy by 2040, according to the IEA, and adopting electrification using existing technology could electrify approximately 78% of industrial energy use. These are the kind of success stories we need to be sharing to inspire others in the region to take action.
The path forward
Europe has the tools and expertise to lead the global green transition, but success depends on action. To drive real progress, investment must be channelled into innovation and a regulatory environment that supports and accelerates growth.
The Clean Industrial Deal is a promising step, but to realize its full potential, we need bold leadership, agile governance, and a shared commitment to building a more sustainable, resilient economy.
Gwenaelle Avice
