Today, Mario Draghi’s report presented a stark mirror to EU leaders: the bloc is lagging behind its global counterparts due to the lack of investments, sluggish innovation and high energy prices. Yet, green NGOs urge caution in the proposed goals and solutions: for Europe to truly lead, it must focus on a race to the top—one that puts people and the planet at the heart of its industrial strategy.

Christian Schaible, EEB’s Head of Zero pollution Industry, said:

“A race to outcompete China and the U.S. is not only economically unsound but will only further fuel geopolitical tensions. Europe’s true competitive edge lies in leading a global transformation —driving detoxification, de-pollution, and restoration. To combat deindustrialisation in critical sectors and secure lasting prosperity and economic resilience, EU leaders must focus on a coordinated industrial policy that prioritises fair partnerships, quality green jobs, and the highest environmental and social standards. It’s not just about making the green transition easier for industries; it’s about getting it right. Competitiveness is not the end game—protecting the planet and its people is.”

Here are our reactions to each of the sections of the report:

CLOSING THE INNOVATION GAP

The EU needs to keep pushing innovation, but it can´t be at the expense of people and nature. Europe needs to boost its low-carbon manufacturing capacity and invest in sectors critical for the green transition – including education and health & social care – but productivity growth should not be the end goal of being innovative, the wellbeing of people and the planet should remain the priority. A truly competitive and innovative European industry with regard to the rest of the world is one that can deliver a fair and just transition while operating within planetary boundaries. This includes creating quality jobs, providing decent incomes and livelihoods, supporting a healthy environment and advocating for Polutters Pay Principle.

A JOINT DECARBONISATION AND COMPETITIVENESS PLAN

Draghi rightly sees decarbonisation as a game-changer for lowering Europe’s energy costs and boosting security. But he falls into the dangerous trap of advocating for a “technology-neutral” approach. This would give equal treatment to all technologies, including nuclear and carbon capture and storage (CCS), alongside renewables, in terms of permitting and financing. According to the IPCC, nuclear and CCS are among the least effective technologies for mitigating climate change. Equating them with renewables, which can be built much faster and cheaper will delay decarbonisation and lead to higher energy prices for European industry.

The industrial transformation will provide significant co-benefits for air quality and reach the non-toxic environment and circularity goals, but the report lacks re-affirmation to those goals. Re-defining the “EU’s objective” as holistic and zero pollution aligned will be key, but there is no single mention of the EU industry to be a solutions provider to sustainable water services, food production or other life essential services, the lack of clarification as whether “strategically important sectors” are indeed compatible with sustainable production and addressing the triple planetary crisis is a clear shortcoming of the Draghi report.

INCREASING SECURITY AND REDUCING DEPENDENCIES

Diversifying the EU’s raw materials supply chains is vital to European industrial policy, but it necessitates ongoing dialogue, collaboration, investment as well as financial and technological transfers to make partnering with the EU an attractive endeavour based on benefit-sharing. Additionally, the EU should ensure partnerships involve binding due diligence measures, public participation, free, prior and informed consent, as well as transparency mechanisms to ensure partnerships lead to an urgently needed race to the top for extractive activities.

Crucially, increasing the security of supply cannot be accomplished without active demand-side reduction initiatives. While circularity, recycling, and resource efficiency are important aspects, sufficiency measures are often overlooked in discussions about supply security. Yet, sufficiency – reducing overall consumption – is the most powerful lever for increasing security and reducing dependency.

FINANCING INVESTMENTS

The EU lacks both sufficient funds and a coordinated mechanism across Member States to have an efficient industrial policy. The report highlighted this by mentioning the need for massive financing needs and for new joint funding. Private finance will be key to unleashing investments, but it will not only be far from sufficient to bring in the required level of finance to secure a green and social transition in Europe, but it is also problematic leading to market concentration and boosting private profit.

Public investment is not only essential to plug the gaps but critical to direct effectively where that investment should be going. This is why we are arguing that the only way forward to solve Europe’s multiple and interconnected crises (climate, nature, social inequality) and a weak economy is to set up a permanent EU investment instrument of at least 1.6% of EU GDP per year to for Member States to invest in sectors of critical importance for the transition to a wellbeing economy and safe planet.

STRENGTHENING GOVERNANCE

Draghi does not refer to the involvement of civil society when designing the strategic objectives. This is evident with the absence of other strategic, life-essential services the EU industry should provide e.g. safe and sufficient water, clean air and healthy soils, toxic-free products and environment to name a few. A reality check as to what really matters is needed.

Good governance is the basis of effective decision-making, legitimacy and trust. It should also be based on solid scientific evidence and should focus on what is right for the planet and people, the frontrunner and lead-by-example role expected by the EU, its Member States, and people, and avoid undue influence by vested interests. A just transition, led by workers’ and communities’ priorities, must be at the heart of any EU industrial policy, ensuring no one is left behind.

[ENDS]