Stalling growth, weakened productivity, and growing anxiety about the future set the scene for Mario Draghi’s recent report on the state of EU competitiveness. Now, the question is: How can Europe maintain its industrial edge while also delivering on its decarbonization goals?

One proposed way out of the maze is European Commission President Ursula von der Leyen’s recently announced “Competitiveness Compass” – which aims to close the innovation gap, unite decarbonization with competitiveness, and reduce dependencies.

There can be no doubt that Europe’s success depends on how it tackles its energy challenge. When it comes to decarbonization, European industries are grappling with significantly higher energy costs, including electricity prices two to three times those in the US. By leveraging renewables, which offer a lower levelized cost of energy compared to fossil fuels, Europe could reduce energy prices. A renewable-powered economy represents not only a solution to high energy costs, but also a foundation for rebuilding industrial competitiveness.

Expanding renewables is not just a matter of competitiveness, but also one of value creation. Wind energy alone has the capacity to drive substantial economic growth, potentially generating €49 billion in GDP and providing over 500,000 jobs across Europe by 2030, according to WindEurope. Yet, realizing this potential will require a stable, predictable, and well-functioning market – one that removes existing barriers and unlocks investments at scale.

While the wind industry is more than capable of meeting demand, the demand itself is the problem. Contrary to perceptions, manufacturing for the European wind industry is ready to scale, and is backed by a track record of ramping up production to meet demand. By 2025, Europe will be capable of manufacturing up to 32 GW of wind turbines annually. Yet, forecasts show that only 22 GW of new wind farms will be built each year from 2024 to 2030 – well below what the supply chain is equipped to deliver.

With a newly elected European Commission and key policy milestones ahead including the Clean Industrial Deal and the implementation of the Net Zero Industry Act (NZIA), policy-makers and industry leaders have the chance to work together to deliver on Europe’s twin goals of decarbonization and competitiveness. Done right, we can ensure that our policies empower rather than constrain Europe’s clean energy industries.

Germany has already shown what can be achieved through targeted policy reforms. By cutting legislative red tape for permitting onshore wind projects, Germany achieved a record increase in wind power build-out. This success demonstrates that simplification and efficiency, not over-regulation, are the keys to unlocking Europe’s energy transition and industrial potential.