Clean energy technologies remain highly cost competitive in Europe, but EU manufacturers are facing challenges to their global competitiveness, according to a new Commission report published today. The 2025 Progress Report on the Competitiveness of Clean Energy Technologies underlines that, despite having a leading role historically in developing net-zero technologies, issues such as high energy prices, supply chain dependencies and labour shortages are impacting the competitiveness of the EU. Tackling these challenges will be pivotal for the sector. Tapping into the potential of net-zero technologies will in turn help to shape a more resilient, secure and affordable energy system, the Commission concludes. Today’s report underpins the Clean Industrial Deal and the Affordable Energy Action Plan, and it follows on from the Competitiveness Compass presented in January.

The EU has one of the largest global markets for net-zero technologies which offers a major economic opportunity. In that context, the report shows that EU renewable energy sources have reached record deployment across the continent, providing 48% of electricity in the EU in 2024. At the same time, it notes that the EU faces fierce global competition in the sector and is at risk of losing ground in terms of research and innovation. Stepping up efforts in this domain will help strengthen the EU’s net-zero technologies sector, while at the same time improving its performance in bringing innovation to the market and exploiting existing solutions. Innovation is pivotal to boost competitiveness in net-zero technologies.

Similarly, challenges related to the manufacturing of these technologies need to be addressed. EU companies are exposed to higher production costs and supply chain dependencies on specific components or raw materials. Considering the economic potential of the transition, the report also stresses the importance of increasing the EU’s manufacturing capacity. While the EU is still well placed in several net-zero technologies, such as wind energy or heat pumps, further support is required to strengthen the EU value chains across net-zero technologies.

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