Transforming Into a Modern, Resilient Europe
![A large building that has EU frags outside](/sites/default/files/styles/carousel_2x/public/images/EU-flags_Schneider-Electric_080524.jpeg)
Becoming climate neutral is a massive undertaking for anyone, let alone an entire continent. But, that’s exactly what the EU is doing. In recent years, the European Commission has driven an ambitious decarbonization policy, striving to create a more resilient Europe and become the first climate-neutral continent in the world.
This goal comes from a time of layered crises. The pandemic tested the EU’s integrity, while the invasion of Ukraine brought warfare to its borders and crippled energy security. The economy has also suffered. For the past five years, growth in the European Union (EU) has been on average 1% lower than that of the U.S. and will continue to trail by around 0.8% in the long term, according to projections. One reason is the rise of energy prices across the zone. The price of natural gas in the EU is still three times higher than in 2019, and about five times that of the U.S.
To reach its target, the EU must first solve a triad of problems involving energy: security, industrial competitiveness, and decarbonization. These issues have one common denominator: the EU’s dependence on imported fossil fuels.
This dependence doesn’t just wreck the environment, it comes at a steep price — and opportunity cost. When the EU’s energy import bill soared, over 800 billion euros went to buying fossil fuel imports at inflated prices. For comparison, that’s almost triple the EU’s defense spending in 2023. This money could’ve been spent on the energy transition instead.
Resilient Europe: A modern economy built on modern technologies
The demand-side of the equation — how energy is consumed by end-users — is a powerful lever for decarbonization, deserving much more attention. Here, we must encourage the swift adoption of both electrification and digitalization. By combining these modern technologies, industries can optimize the way they use energy, driving a faster transition away from fossil fuels and toward sustainable, affordable, and secure energy resources.
With the Green Deal, the EU developed the right framework to address its energy challenges. But, there’s a long road ahead. For example, nearly 75% of the building stock in Europe isn’t energy efficient, with only about 1% undergoing renovation each year.
Renewed EU institutions must tighten their focus on demand-side management of the energy sector, while ensuring the ‘green’ transformation of society doesn’t impede competitiveness. To these institutions, we propose three priorities to make a more resilient Europe.
1. Accelerating the energy transition.
This is the key to ending fossil fuel dependency and encouraging affordable, low-carbon energy sources. The Green Deal is a start, but we need more action to unleash the power of electrification on the demand-side. Across all sectors, research suggests that the share of electricity in the EU mix could more than double to reach 50% — with technologies that are already available at scale. Buildings, industry, and the distribution grids are where we should start.
2. Prioritizing digital transformation.
The digitalization of the global economy is underway, but the EU still lags behind the two current powerhouses of the world: the U.S. and China. Digitalization can help develop new economic activities while giving thrust to the decarbonization of the EU’s energy system.
Notably, digitalization unlocks advanced forms of energy efficiency, and directly supports the rise of circularity at scale. That’s why a digital transformation — combining sustainability and digitalization — must become a core policy of the EU, especially for industry and infrastructure.
3. Simplifying the sustainability policy framework.
Europe’s ESG commitment is driving innovation and the energy transition, aiming to make the continent a hub for sustainable technologies. Recent political cycles brought significant legislation to prepare for the 2050 climate goals, including the Sustainable Finance package, considering broader societal and environmental impacts. Moving forward, it’s crucial to refine the regulatory framework to enhance Europe’s leadership in sustainability policies, driving real transformation beyond reporting.
I’m optimistic about the future. The EU boasts prominent industry leaders, strong local R&D and manufacturing capabilities, and abundant talent from top universities. With the right strategy, the EU has the potential to overcome its energy challenges.