Ursula Woodburn is director of the Corporate Leaders Group Europe, which brings together business leaders committed to supporting the transformation to competitive and sustainable economies that will deliver a climate-neutral future by 2050.
A critical choice faces Europe’s leaders as they meet today at the European Council summit: Will Europe shape the future of global industry or be shaped by it?
In today’s volatile geopolitical and economic landscape, Europe must act decisively to secure its industrial sovereignty and long-term competitiveness or risk missing out on economic, security and climate benefits.
Creating a strong industrial strategy that both reflects the global clean tech race and addresses the challenges facing European industry would bring clear opportunities, and has huge potential to attract new investments.
But despite the benefits, the European Commission’s recent industrial drive, the Clean Industrial Deal, threatens to fall flat. When it was proposed at the beginning of the year, it promised action, but now the EU is sending mixed messages, with the Commission promoting “staying the course” while also cutting back on green policy.
Global race to invest in clean tech
Europe’s industrial base is strong, but it’s under pressure. Global competitors such as China are investing heavily in clean technologies, and the race for industrial leadership is accelerating, taking over sectors where Europe used to lead.
While necessary streamlining and simplification is useful, it is veering into a major upheaval of EU regulations. For example, wholesale cuts to sustainability reporting risk jeopardising investments already made in due diligence and reporting, and turning compliance efforts into uncompetitive costs, de facto rewarding the laggards.
It also ignores the major economic benefits that companies could have from becoming more sustainable.
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The European Commission must instead focus on how to build a streamlined, industrial strategy that both reflects genuine concerns from businesses and creates a pathway towards sustainability.
Businesses and investors are behind this. They are calling on the EU to set a robust 90% emissions-reduction target by 2040, arguing this would send a vital signal of Europe’s continued commitment to climate neutrality and industrial leadership.
Europe must support, not stifle green investment
Whatever the headlines say, businesses across Europe are already investing in the huge opportunities of a cleaner future economy and in reducing their broader impacts. This is because they understand the risks for their supply chains and the direction of future markets.
These efforts must be supported – not stifled – by forthcoming legislation. This should include clear incentives for reinvestment and instruments to reduce costs and secure Europe’s leadership in clean technology.
More than 130 signatories have just outlined a roadmap to strengthen the EU’s industrial edge, outlining a business roadmap with priority actions.
As EU leaders meet in Brussels, they need to implement a framework to support business cases delivering on Europe’s goals and ensure a future-proof economy. This is about ensuring that Europe can grasp future opportunities, rather than being mired in the past, and enable it to unlock billions of euros of investment for a resilient, clean and competitive Europe.
A strong industrial strategy could help mitigate significant risks to our economy – a recent report estimated 43 billion euros in losses from the droughts, heatwaves and floods that hit EU countries this summer, forecasting that losses would hit 129 billion euros a year by 2029.
Effective rules and lower costs
In the statement, businesses and investors are calling for simple, stable and effective regulation to attract investment and drive industrial renewal. This needs to be accompanied by effective enabling policies, including a robust European Emissions Trading Scheme.
Affordable clean energy and electrification are also crucial for reducing bills and enhancing energy independence. This means work needs to be done to increase access to and demand for this, supported by the right infrastructure.
In addition, the European Commission needs to follow through on the Clean Industrial Deal’s promise to use lead markets and strategic procurement to scale innovation and reduce prices. This has enormous potential to derisk the investments needed to scale up the production and sale of clean products and services, driving costs down thanks to economies of scale and enhancing consumers’ trust, and ensuring that clean products and services compete fairly with the fossil-based economy.
The company tracking energy transition minerals back to the mines
Following through on work to move from a linear to a circular economy, including the upcoming Circular Economy Act, is also essential. Effectively leveraged, it can boost productivity and resilience and tackle Europe’s resource overuse in a constrained world, but deployment is nowhere near delivering on this potential.
All of this requires mobilising a huge amount of investment, enabling investor confidence through clear long-term policy frameworks. Public finance should also be used to attract private capital and bridge the investment gap, including supporting the uptake of future-proof products and services, rather than extending the lifespan of assets that we know belong in the past.
This is a moment for pragmatic leadership and delivering a strategic industrial agenda. With clear direction and consistent action, European leaders can ensure the twin transitions deliver a stronger, more resilient, and globally competitive economy.
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EU must sharpen its industrial edge on the road to climate neutrality
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Three countries have been named by the Paris Agreement’s compliance committee for failing to submit a nationally determined contribution (NDC) and repeatedly snubbing offers of help with their climate plans.
After months of internal debate over whether to identify serial non-responders, the Paris Agreement’s Implementation and Compliance Committee (PAICC) named the three countries which have failed to engage with it over their NDCs on Friday.
It named Democratic Republic of Congo, Senegal and North Korea in a footnote of its annual report, adding that it decided to name them “with a view to facilitating engagement”, adding that representatives of the three nations had been invited to its meeting in early 2027 “with the purpose of identifying any challenges and constraints”.
“The Committee noted the importance of Parties engaging with the Committee in a timely manner, while noting that some delays may be due to the national capabilities and circumstances of the Parties”, the report said.
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Paris Agreement committee snubbed over missing NDC climate plans
Many governments have still not submitted a nationally determined contribution to the UN, breaching a key requirement of the Paris Agreement
In July, PAICC said 12 countries had ignored its repeated attempts to discuss why they had not published an NDC as required every five years under the 2015 Paris accord.
Members of the committee had been divided over whether to name them, but at a September meeting decided to do so in their annual report to the annual climate COP summit.
By the time the report was published on Friday, only Congo, Senegal and North Korea “had not communicated an NDC or submitted a [Biennial Transparency Report] and had not yet responded to any of the Committee’s notifications, despite several reminders issued by the Committee in this regard”.
Rainforest and renewable energy ambitions
The silence from Congo and Senegal is notable because the former is home to much of the Congo Basin rainforest while the latter has sought billions of dollars in climate finance to support its renewable energy ambitions.
After Brazil, Congo has more rainforest than any country in the world. This forest, and the country’s peatlands, absorb huge amounts of greenhouse gas but are fast being lost to expanding farmland, charcoal production, logging and mining.
Senegal signed a Just Energy Transition Partnership with Canada and wealthy European nations in 2023, to help it meet its renewable energy targets under the-then government of Macky Sall. It was chair of the Least Developed Countries group between January 2022 and December 2023.
Tejas Rao, who is researching the PAICC as part of a doctoral thesis at Cambridge University, said the governments of the three countries should engage with the committee.
“Engagement costs these governments very little and the committee has shown it will listen,” he said.
“Silence leaves the committee with no basis to help, and it leaves the [governments] exposed to the narrative that they are simply disengaged,” he told Climate Home News.
Paris Agreement requirement
The 2015 Paris Agreement requires all parties to publish an NDC every five years outlining their emissions reduction targets, with each plan meant to be more ambitious than the country’s last NDC.
The latest set – the third round of plans, with new targets for 2035 – was due in February 2025. While most countries missed this deadline, all but around 30 – mostly small emitters but including Egypt, Vietnam and Argentina – have now submitted them.
Over the year, the PAICC – which is made up of government climate officials from developed and developing countries – has been communicating with governments that have not submitted NDCs and trying to overcome barriers to them doing so.
Some nations have cited exceptional circumstances as the reason for not submitting an NDC, a process that requires a significant amount of work in tracking emissions and consulting on how to curb them across the economy. For example, a letter from a Sudanese official to the PAICC, seen by Climate Home News, said that the country’s civil war had led to the suspension of its NDC preparation.
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The US and Iran are not signed up to the Paris Agreement and so do not have active NDCs, nor does Taiwan, which is not a UN member state.
Rao said that because the PAICC is “facilitative and non-punitive”, naming the countries “is meant to open a door, not close one – the invited consultation is the point”.
“In recent months, governments that explained their constraints, whether capacity, finance or domestic process, have been met with follow-up and support rather than sanction, and the number of silent governments has fallen sharply,” Rao said.
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Paris Agreement committee names three countries snubbing it over NDCs