Europe's Urgent Market Reforms for Industrial Decarbonization and Competitiveness
Mario Draghi has emphasized the critical need for Europe to undertake urgent reforms in its energy market to achieve competitive prices and bolster industrial resilience.
Despite the publication of the Draghi Report a year ago, only a small fraction of the recommended measures have been fully implemented, leaving the continent vulnerable in terms of energy autonomy and competitiveness. Draghi highlights that Europe remains overly dependent on raw materials and technology imports, which hampers its strategic positioning.
A key aspect of the renewal of Europe involves reforming its energy market to reduce high gas and electricity prices that threaten industrial productivity. The current governance fragmentation delays infrastructure permits, often taking up to nine years, and hinders swift market responses. Draghi advocates for linking energy prices to long-term contracts, renegotiating existing agreements, and promoting public financing for infrastructure projects to improve cost efficiency and security.
In addition, the report underscores the importance of harmonizing European energy policies, especially regarding network infrastructure and energy security. The role of the private sector in advancing these goals is critical, but the public sector must lead through simplified regulations and a unified legal framework. Better coordination is essential to maximize investment and streamline the deployment of renewable and low-carbon technologies.
Draghi also emphasizes that Europe must accept the reality of evolving geopolitical challenges, including the trade and industrial policies of major powers such as the United States and China. While these nations pursue rapid industrialization and technological innovation, Europe must create a supportive environment for private research and development investment and foster scalable growth for small and medium enterprises, which represent 70 percent of European employment.
Achieving a sustainable, energy-independent, and competitive Europe requires simultaneous growth acceleration and decarbonization efforts. Draghi advocates for making decarbonization a strategic lever to enhance competitiveness, underscoring that a green transition driven by innovation and market reform is vital for future resilience.
Leaders in organizations like Naturgy and IESE stress that aligned energy policies, technological innovation, and public-private collaboration are fundamental for shaping a sustainable and competitive European economy by 2035. The path forward depends on swift, decisive reforms and the collective effort of public institutions, industry actors, and society to realize this vision.