Europe is at a historic turning point in terms of energy, industry, and climate policy. Under pressure from emission reduction targets, but also from the need to remain competitive with the US and China, the European Union is readjusting its approach: it is not abandoning its climate ambitions but is sending a clear signal that the current level of regulation has reached the limit of what is acceptable to the business community.
Against this backdrop, the European Commission is proposing to relax some environmental rules and cut red tape, and the debate about the risks and benefits of a shift away from industrialization to green energy is becoming crucial. The stakes are twofold: maintaining a competitive economic model and achieving climate targets in a world that is not, in fact, decarbonizing at the hoped-for pace.
Brussels steps on the “pragmatism” pedal
The European Commission has drawn up a set of proposals to relax environmental legislation, targeting in particular requirements for industries to report in detail on pollution and waste. The document, part of an “omnibus” effort to cut red tape, aims to eliminate regulations considered excessive by the business community.
Europe’s environmental regulations are among the strictest in the world – from CO₂ emissions and water quality to bans on harmful chemicals. Now, the Commission proposes: removing the requirement for each industrial facility and livestock farm to have its own environmental management system (EMS); allowing for the adoption of a simplified EMS at company level for all sites, which would also remove the obligation to detail the use of hazardous substances at facility level; waiving the requirement for industrial facilities to have a “transformation plan” aligned with climate objectives; exempting livestock and fish farms from reporting water and energy consumption; simplifying environmental assessments for industrial and energy projects.
According to the draft, these measures could cut administrative costs by around €1 billion a year, contributing to Brussels’ goal of reducing reporting burdens by 25% by 2029. This is not the first step in this direction, as the EU has already postponed the anti-deforestation directive, exempted thousands of companies from sustainability reporting and due diligence, and relaxed the environmental conditions attached to agricultural subsidies.
Critics – from environmental activists to ESG-oriented investors – accuse the Commission of “amputating” laws that help manage climate risks and attract capital for the green transition. In its defence, Brussels argues that climate targets remain unchanged, but they must be met “more efficiently, less expensively and more intelligently.”
Green transition and the risk of deindustrialization: Benefits and costs of a “cleaner” Europe
Europe remains the global champion of environmental regulations. But this leadership also comes at a visible cost: the declining attractiveness of European industry.
More and more governments and companies are warning that an accelerated green transition, combined with strict regulations and high energy prices, could have highly destabilizing effects. These could include: the closure of production facilities in key sectors such as steel, chemicals, cement, and glass; the relocation of investment to the US or Asia, where energy is cheaper and regulations are often more flexible; job losses in traditional industries and the emergence of industrial “dead zones”; increased dependence on imports for strategic products and technologies.
On the other hand, the gradual decline of traditional industrialization and the shift towards green energy also bring clear benefits: accelerated decarbonization and reduced pollution; improved quality of life and public health; stimulation of investment in cutting-edge areas – batteries, green hydrogen, energy efficiency, digitalization; the emergence of a cleaner, more innovative, and, in the long term, perhaps more competitive industrial ecosystem.
Risks not to be neglected
However, the risks of low industrialization remain significant: loss of economic competitiveness, reduction of the tax base, slower economic growth, social tensions in mono-industrial regions, and, perhaps most seriously, the inability to finance even the green transition in the long term.
Europe is thus in a paradox: to accelerate the green transition, it needs a strong economy, but overly restrictive climate policies risk weakening this very economic base.
A hostile global context: Energy as a strategic weapon
The new US national security strategy for Donald Trump’s second term in office describes Europe as a place where democracy and freedom of expression are in decline and national identities are eroding. On the energy front, the discourse is just as tough: Trump criticizes the European green transition, especially the expansion of wind power as “costly” and potentially destructive to the economy.
The White House leader’s political message may have a double meaning. On the one hand, we are talking about the aggressive promotion of domestic fossil fuels as a guarantee of prosperity and security, and on the other hand, pressure on European allies to “reconsider” their climate and immigration policies.
At the same time, the US is launching massive stimulus packages for industry and energy—such as the Inflation Reduction Act—which are attracting investments that would otherwise have remained in Europe.
Russia–India: Another energy pole is consolidating
As Europe narrows its dependence on Russian resources, Moscow is redirecting its exports to Asia. Vladimir Putin’s visit to Delhi confirms this trend: Russia is offering to provide India with “uninterrupted supplies” of fuel, despite US pressure to halt Russian oil imports.
India, the world’s third-largest crude oil consumer, has sharply increased imports from Russia after the 2022 invasion. Even if some Indian companies are now reducing these volumes to comply with US sanctions, the energy partnership remains strong. Putin provocatively points out that the US continues to buy nuclear fuel from Russia for its own power plants, and if Washington can afford this “pragmatism”, asks the Kremlin leader, why shouldn’t India enjoy the same privilege?
In parallel, Russia and India announce a joint economic program until 2030, cooperate in civil nuclear energy, shipbuilding and critical minerals, and strengthen the political and strategic dimension of their collaboration through the BRICS framework, presented as an alternative to the Western-dominated order.
For Europe, all this means a loss of influence in emerging markets, tougher competition for access to resources and an energy world increasingly fragmented into rival blocs.
Europe’s strategic dilemmas: Between climate idealism and energy realism
Against this complicated global backdrop, Europe must simultaneously manage three major dilemmas.
- Price vs. security vs. environment. The EU has more expensive energy than its main competitors and is heavily dependent on imported LNG and fossil fuels. The green transition is vital, but cannot, in the short term, compensate for the lack of abundant domestic resources. How does Europe secure affordable energy without sacrificing its climate goals?
- Tough regulation vs. economic competitiveness: European companies increasingly argue that they cannot compete globally if they remain the only ones subject to extremely tough standards. Without some relaxation and simplification, new investment is going to the US or Asia and Europe risks becoming a consumer market rather than a manufacturing hub.
- Green transition vs. technology dependence: reducing traditional industrialization reduces emissions but increases dependence on green technologies made elsewhere – especially China, dominant in photovoltaic panels, batteries and many critical materials. A “green” Europe, but one completely dependent on strategic technological imports, remains vulnerable.
So, a greener but no less industrial Europe seems the only sustainable way forward. But at what cost?
Green transition should not mean sacrificing industrial capacity. On the contrary, Europe can turn its climate ambition into a competitive advantage if it develops strategic green industries on its own territory (batteries, hydrogen, advanced materials, renewable energy equipment) or if it invests heavily in green hydrogen, modular nuclear reactors, and carbon capture and storage projects. It should also accelerate the digitization of the industry to reduce energy and resource consumption and revalue its mineral and raw material potential through modern and sustainable mining to reduce import dependence.
In this scenario, the decline of highly polluting industrial activities would be offset by the development of new, technology-intensive value chains with high added value and low climate impact.
Towards a new European energy and industrial contract
All these developments clearly show that Europe can no longer afford extremes: Neither green dogmatism that ignores economic and geopolitical realities, nor a simple return to fossil fuels without a long-term transition vision.
Europe’s energy future depends on well-calibrated strategic realism, i.e., a combination of renewable energy and transitional sources (gas, nuclear), smart regulations that do not stifle industry, a competitive industrial base, and genuine technological autonomy.
The legislative relaxation proposed by the European Commission is, in this sense, more than a technical gesture: It is recognition of the fact that the current model needs to be adjusted. The big question remains whether Europe will manage in due time to strike the delicate balance between climate ambition and economic survival in a world that is not moving at the same pace towards decarbonization.
This fragile balance will determine not only the continent’s energy future, but also its position in the economic and geopolitical architecture of the 21st century.