Four parameters to simplify and boost efficiency
An article by Vision team*
"Decarbonization must happen not only to save the planet but because it can become the main driver of growth for Europe." The report presented by Mario Draghi a few months ago reiterates that the energy transition can be the best opportunity for a continent that needs to escape its own obsolescence. But that study proposes a profound redefinition of the nature of this change: no longer as a matter of “laws to save the world" but as one of industrial policy, one seeking to close the investment and technological gap that has opened up between Europe, China, and the United States.
The Global Gap in Investments in Clean Technology Manufacturing
Source: BloombergNEF
The bar graph illustrates the geographic split of clean technology manufacturing investments from 2018 to 2027. Mainland China is the dominant player of the industry, accounting for the vast majority of global investment, with $130 billion spent in 2023. Following relocation efforts, the United States, Europe, and India are secondary players on the global stage, highlighting the industrial investment gap with China. This disparity is one of the key causes of European reliance on clean tech imports, and it is one that must be remedied by more proactive industrial policy. The 2025-2027 projection shows a slight moderate decrease in investments, which means that the industry will suffer a slowdown due to overcapacity and political risks. However, building an independent European clean energy supply chain remains a strategic necessity.
The new European Commission began its mandate declaring that a 25% reduction in business bureaucracy would be its guiding principle ("COMPASS"). However, simplification can be done in three different strategies, and the proposal of February 26 appears to modify corporate sustainability reporting obligations through the one requiring the least amount of strategic effort. This is also the one that has the least effect if the goal is to make innovation our best asset.
The problem of regulatory complexity, which seems to have taken hold in EU institutions, actually starts with the names and abbreviations of the layered legislative actions. With the EU regulations on corporate disclosure of non-financial impacts, they are known to but a few thousand citizens: the CSRD, which is intended to measure a large company’s environmental impact (as well as its impact on social rights and the quality of corporate governance); the CSDDD, which is intended to help companies improve that impact over time; and the "taxonomy" acts, which should guide investors towards activities that facilitate the energy transition.
The Commission has only recently submitted a revision of these requirements, and it is already surprising that this is happening while the affected companies were set to implement newly established procedures after months of preparation. The most significant "simplification" proposed by the Commission establishes a size threshold (1,000 employees) under which the requirement no longer exists: 23,000 of the 30,000 companies preparing to comply are now excluded. For the other companies, the first reporting requirement under the new rules is postponed by two years. On top of that, the unrealistic premise that large companies are alone responsible for the choices of all their suppliers along long and transnational "value chains" has been checked.
In fact, in the banner of "simplification," there are at least three different strategies of varying degrees of complexity and impact. The Commission seems to have opted for the first approach, which is more of a retreat than a real rethink. In some cases, this might be justifiable, but it is certainly not a strategic approach. It exposes European companies to the risk of simply delaying costly and misplaced obligations in favor of doing something about them ineffectively.
Much better, if harder, would have been to redefine the reporting requirements using four key criteria: maintaining the focus strongly on environmental impact assessments (the "E" in ESG) rather than extending scope to other goals, replacing qualitative corporate statements with simple, objective emission and energy efficiency metrics developed by the OECD, eliminating the flawed "taxonomy" approach that classifies industries as either polluting or clean even when technology changes, and making bureaucratic requirements voluntary practices encouraged through targeted incentives.
Beyond simplification, a broader plan is still missing (which could be referred to as the "CLEAN INDUSTRIAL DEAL") with which to step into the future with the strength necessary to defend and promote the European model.
The European Commission is, at times, accused of being overly liberal and, at others, of being too interventionist. But it is not an ideological issue, as certain people prefer to state. It is a matter of professional bias—a cultural problem for bureaucracies run by rule-makers who themselves get lobbied by interest groups (consulting firms, legal offices) who profit from the regulatory complexity they create.
Mario Draghi and the newly appointed Commissioner Teresa Ribera emphasize the need for an industrial policy capable of achieving pragmatic and short-term results. The inspiration is correct, but implementation risks getting lost in a sea of details managed by bureaucrats who are not incentivized to solve complex problems.
*Sara Chiminello, Associate of Vision Think Tank
References
BloombergNEF. (2025). Energy Transition Investment Trends 2025. Abridged Report. Tracking global investment in the low-carbon transition. Link.
European Commission. (2024). The future of European competitiveness: In-depth analysis and recommendations. Link.
European Commission. (2025). Competitiveness Compass. Link.
