European industrial policy: plans of the new European Commission and Dutch priorities

This summer, recently re-elected Commission President Ursula von der Leyen laid out her policy priorities for the next five years. In this context, what are the European Commission’s plans for industrial policy? What role will the Netherlands likely play? And how do these plans align with the recommendations recently presented by Draghi?

In this blog series from Public Matters, we provide insights into what to expect in the coming years regarding four major European policy areas: energy & industry, healthcare, technology, and agriculture. This week, colleague Judith focuses on the anticipated developments in the industrial sector.

Looking back at the previous term

During her first mandate, Von der Leyen set the stage with the European Green Deal, a comprehensive initiative aimed at sustainability and reducing CO2 emissions across the EU. The Green Deal established the foundation for far-reaching measures to curb greenhouse gas emissions and green the economy. Significant pieces of legislation were passed during this time, such as the European Climate Law, which enshrined the goal of climate neutrality by 2050 into law, and the Fit for 55 package, targeting a 55% emission reduction by 2030. Although these laws marked a significant step forward, their implementation and practical execution remain challenging. Von der Leyen and her team’s dedication to realizing these goals will be central to her second term.

New initiatives and focus areas

Von der Leyen’s re-election signals a clear continuation of Europe’s climate agenda. The Commission remains committed to the established targets: reducing greenhouse gas emissions by 55% by 2030 and achieving climate neutrality by 2050. This also includes a newly introduced goal of a 90% net emissions reduction by 2040, as outlined in the European Climate Law. First mentioned in the 2040 Climate Target Communication earlier this year, this ambitious target has been confirmed as a cornerstone of the new mandate.

One of the key initiatives is the Clean Industrial Deal, set to be unveiled next month. It aims to foster both industrialization and sustainability by helping businesses green their production processes. This presents not only opportunities for a more sustainable industrial sector but also strengthens Europe’s leadership in clean technologies. However, some critics are concerned that the focus on economic growth and deregulation could undermine climate goals. The term “greenhushing” has emerged to describe instances where climate ambitions are downplayed in favor of economic arguments, leading to vague commitments and delays in real action—something critics also observe in the U.S. Inflation Reduction Act.

The Draghi report: recommendations for strengthening competitiveness

The recently published Draghi report, considered the most comprehensive analysis of the EU’s competitiveness in 30 years, could significantly influence the new mandate. The report emphasises the urgent need for structural policy reforms to simultaneously achieve decarbonization and re-industrialization.

Regarding energy policy, the report underscores that Europe needs a long-term strategy to avoid future price shocks. It advocates for simplifying permitting procedures, creating new financing models, and decoupling the prices of renewable and nuclear energy from fossil fuels. Draghi also highlights the need to harmonise energy prices across the EU and reduce taxes to close the gap with countries like the U.S. and China, where energy is significantly cheaper.

In terms of industrial policy, the report is clear: high energy prices and volatility pose serious challenges for energy-intensive sectors and future value chains. The use of ETS revenues to fund both capital and operational costs for decarbonization projects is suggested as a potential solution. The Carbon Border Adjustment Mechanism (CBAM) also plays a critical role in preventing carbon leakage after the phase-out of free emissions allowances.

For the Netherlands, the report’s recommendations—such as harmonizing taxes and network tariffs—could be advantageous, as Dutch businesses face high energy costs. Implementing these changes would level the playing field across the EU and boost the competitiveness of Dutch industry.

The report also offers opportunities for companies and lobbyists to take an active role. Industries in Northwestern Europe face similar challenges, such as high energy prices and infrastructure limitations. By forming alliances like the Antwerp Declaration, businesses can amplify their voices and apply pressure on policymakers to remove barriers. This could lead to more collaboration on the energy transition and provide companies with the opportunity to align their strategies with EU policy.

Nuclear energy: a potential direction for the EU?

A crucial aspect that could impact European industry is the role of nuclear energy. There is speculation that the European Commission may introduce a “Nuclear Act,” positioning nuclear power more prominently within EU energy policy as a means to diversify the energy mix and reduce carbon emissions. The Draghi report identifies nuclear energy as a potential pillar of a low-carbon energy system. In the Netherlands, plans for new nuclear power plants are currently a topic of debate. However, critics caution that investments in nuclear power could divert funding away from renewable energy and raise challenges with integrating nuclear power into the grid.

The Dutch approach: innovation, cooperation, and fairness

The Netherlands plays an active role in the European energy transition, with a strong emphasis on innovation, collaboration, and social equity. Dutch strategy prioritises cooperation at the EU level to remove obstacles and ensure a level playing field for all member states. The country advocates for an implementation agenda that supports climate goals while remaining economically viable and socially just. This includes investments in technologies such as green hydrogen and CO₂ storage, to not only enhance sustainability but also create new market opportunities in the industrial sector.

Additionally, there is a focus on the fair distribution of the costs of the energy transition, with particular attention to lower- and middle-income groups. The Dutch Parliament has stressed that climate policy must ensure social inclusion and foster economic growth.

In conclusion

For organizations engaged in EU lobbying, the European Commission’s policy priorities and focus areas are of critical importance. Understanding these priorities and aligning with the timeline of the forthcoming work programme enables stakeholders to strategically engage at key decision points and with relevant actors. As the formation of the new European Commission takes shape, this period offers opportunities for interaction with policymakers, participation in consultations, and building coalitions with other stakeholders. Organizations that proactively follow policy developments, leverage their networks in Brussels, and collaborate strategically will be well-positioned to succeed.