The European Commission releases its Competitiveness Compass with a focus on decarbonisation

The European Commission unveiled its Competitiveness Compass on Wednesday, a strategic roadmap inspired by  the two reports respectively  authored by Mario Draghi and Enrico Letta, to guide its mandate. Building on the premise that Europe is losing its competitive edge, especially compared to the US and China, this compass establishes competitiveness as one of EU’s overarching principles for action and sets out key measures that should enable the EU to regain its economic dynamism.

EuropeOn welcomes the focus on decarbonization, one of the three key pillars of the document as well as the promise to “accelerate the clean energy transition and promote electrification”. However, the postponement of the Electrification Action Plan to 2026 is worrying as electrification is a predominant enabler of Europe’s decarbonisation targets.

We are also pleased to see skills recognised as a crucial “horizontal enabler” for boosting Europe’s competitiveness. The energy transition depends on a highly skilled workforce, and addressing labour shortages in the electrical sector will be essential to achieving Europe’s climate and industrial goals.

Decarbonisation needs to rely on electrification

Decarbonising Europe while boosting its competitiveness has been identified as one of the three main pillars of the Competitiveness Compass. The Clean Industrial Deal and the Affordable Energy Action Plan, coming out in less than a month, aim to reduce energy dependence and position the EU as a competitive hub for manufacturing while advancing clean technologies. However, these goals can only be met if electrification is placed at the centre of the strategy:

  • While the Electrification Action Plan has been postponed to 2026, the EU must keep it high on the agenda. Electrification is key to decarbonising European industries and buildings (in Denmark, 81% of the country’s 2030 decarbonization targets depend on the work of electrical contractors) and should be the foundation of any policy aimed at achieving the EU’s climate and competitiveness objectives.
  • The Compass astutely highlights energy taxation as a major gap in the energy market that requires urgent reform. The starting point should be the electricity/gas price ratio, which is crucial to making electrification attractive to consumers and ensuring the effective implementation of the Energy Performance of Buildings Directive (EPBD).
  • The Affordable Energy Action Plan must centre around electrification to guarantee low energy prices for industrial consumers and households as well as enable the timely, fair, and full implementation of the EPBD.
  • Electrification is the most efficient and cheapest solution to decarbonise road transport in most cases. Worryingly, the Compass highlights e-fuels as contributors to the 2035 climate neutrality target for cars, even if much more expensive for consumers and risks delaying the shift to electro-mobility.

Skills as a transversal priority to enhance Europe’s competitiveness

The European Commission has announced the release of the Union of Skills, expected for the beginning of March, which will include a new VET strategy. We welcome this initiative and urge the EU to prioritize workforce shortages in the electrical sector. Without a sufficient and fully qualified workforce, the ambitious targets set by the Green Deal will remain out of reach, while Europe will miss out on the local job creation and growth associated with the energy transition.

However, the Compass misses the mark on the quantitative aspect. For electrical contractors, the main issue is the shortage of workers before the shortage of skills. The aim to “increase labour market participation” could be a solution to this issue but should endeavour to steer prospective workers towards promising sectors that contribute to the competitiveness and decarbonisation of the EU.

To drive the energy transition, Europe must urgently tackle workforce and skills shortages. As outlined in our letter to Executive Vice President Ribera, Executive Vice President Sejourné, and Commissioners Hoekstra and Jørgensen, the Clean Industrial Deal must include a strong skills component to ensure its effectiveness.

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EuropeOn has been actively addressing the skills challenge since the launch of our #Skills4Climate campaign in 2019. Our members work closely with national governments to tackle workforce gaps, shape training curricula, and develop apprenticeship programs. Since 2021, our Skills & Attractiveness working group has been fostering collective solutions to strengthen the sector’s talent pipeline. In 2024, we published two reports under the revised Energy Efficiency Directive, focusing on assessing workforce gaps and awareness campaigns.