Anne Højer Simonsen is a Senior Vice President and Head of Climate Policy at Danish Industry.
When the wind blows and the sun shines across Europe, powering electricity through cables connecting north and south, the benefits go far beyond the climate. It also bolsters Europe’s freedom, security, and economic competitiveness. At a time marked by war, geopolitical and economic uncertainty, and escalating climate risks, Europe urgently needs a clear green direction to stay competitive in developing and producing the clean technologies of tomorrow.
Meanwhile, the price of inaction on the climate crisis is mounting – examples include loss of productivity, ruined harvests, damaged infrastructure and an increasing number of homes lost to forest fires and floods across Europe. For the EU to remain resilient in the decades ahead, climate, security, and industrial policy must be approached as a unified agenda.
That is why we, as representatives of businesses, the financial sector, and civil society, jointly call for Europe’s next common budget – the Multiannual Financial Framework – to become a decisive turning point for the clean transition. We have therefore come together to formulate a set of recommendations on how the next budget can do exactly that.
Clean investment to future-proof Europe’s security and competitiveness
Today, the EU imports more than 90 percent of its oil and gas – costing us more than €400 billion per year. These are enormous sums leaving Europe instead of being invested in our own energy independence, innovation, and industry, where they could create jobs, strengthen security of supply, and reduce costs for businesses and consumers.
Breaking free of this import dependency will require significant investment. The European Commission has compared current investment levels with what is needed to meet the EU’s climate targets. The estimate is that from now until 2030, an additional €477 billion in climate investments is needed annually – rising to up to €743 billion per year towards 2040. The sums are significant, but they represent investments in a Europe able to stand on its own – economically and strategically. The Draghi Report likewise highlighted that major public and private investment are essential to secure Europe’s competitive edge.
The clean transition is one of the strongest safeguards for Europe’s economic stability. More affordable renewable energy brings down costs for both families and businesses. Clean innovation opens new markets and creates jobs. And an economy driven by renewable electricity cuts reliance on fossil fuels, which can all too easily become instruments of political pressure.
A sustainable EU budget is key to Europe’s competitiveness and security
The common EU budget is more than balance sheets and allocation formulas. It is Europe’s strategic plan for security, competitiveness, and a clean transition. Accordingly, EU spending on clean investments should be significantly increased compared to the current budget period. The budget should therefore include an ambitious target for investments in climate, energy, environment, and circular economy, to close the climate investment gap and reduce the EU’s dependence on expensive imported energy as quickly as possible.
The European Commission has proposed establishing a European Competitiveness Fund to consolidate and focus EU investments in strategic technologies. We believe that the fund should have significant clean DNA, prioritising investments in clean-tech, electrification, and industrial decarbonisation. This is essential if European industry is to compete globally. In particular, there is need for an enhanced focus on helping clean technologies and companies scale up, supporting innovation, and ensuring that clean-tech manufacturing in Europe is scaled up so that electrification does not simply replace old dependencies with new ones.
Powering up Europe
To break free from fossil fuel imports, the EU must not only produce far more renewable energy – it must also be able to use it efficiently. This means replacing gas boilers with electric heat pumps, converting industrial processes currently powered by fossil fuels to electricity-based technologies, and much more. Electrification is one of the most cost-effective paths to boosting competitiveness, reducing emissions, and lowering energy dependence, but it relies on a more integrated electricity market. We therefore strongly urge the European Parliament and Member States to back the Commission’s proposal to quintuple investment in strengthening electricity interconnections across Member States.
Public funds alone cannot close the climate investment gap. Yet the EU budget can provide strong signals and reduce risks for private investors, channeling capital in the right direction. Through blended finance instruments, guarantees, and clear political guidance, Europe can unlock far greater private investments for clean technologies.
Finally, the EU budget must be efficient and transparent. A robust method is needed to classify which investments qualify as sustainable, and which do not.
Europe has already made significant progress in the clean transition. Across the continent, businesses, investors, and civil society are moving toward increased electrification, greater energy efficiency, and expanded production, transmission, and storage of renewable energy. By doubling down on the clean transition, the EU can strengthen the synergies between being sustainable, competitive, and secure – and that is precisely where Europe’s future lies.
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