The European Commission has proposed giving itself legally-enshrined power to plan the expansion of European electricity grids, as it scrambles to update an ageing network to meet the soaring demands of the clean energy transition. The proposed changes to the Trans-European Networks for Energy, or TEN-E, regulation, would give the Commission power to conduct “central scenario” planning to assess what upgrades are needed to the grid — a marked change from the current decentralized system of grid planning. The Commission would conduct this planning every four years. Where no projects are planned, the Commission would have power to intervene. The proposal was part of the European Grids Package, a sweeping set of changes to EU energy laws released Wednesday. Electrification of everything from transport and heating to industrial processes is essential as Europe moves away from planet-warming fossil fuels. But that puts huge strain on networks, and the Commission estimates electricity demand will double by 2040. An efficient, pan-European electricity grid is essential to meeting this demand. “The European Grids Package is more than just a policy,” said Teresa Ribera, the EU’s decarbonization chief, in a statement Tuesday. “It’s our commitment for an inclusive future, where every part of Europe reaps the benefits of the energy revolution: cheaper clean energy, reduced dependence on imported fossil fuels, secure supply and protection against price shocks.” Along with centralized planning, the Grids Package proposes speeding up permitting of grids and other energy projects to get the infrastructure faster, including relaxing environmental planning rules for grids. Currently planning and building new grid infrastructure takes around 10 years. It would do this by amending four laws: the TEN-E regulation, the Renewable Energy Directive, the Energy Markets Directive, and the Gas Market Directive. The package also proposes “cost-sharing” funding models to ensure those countries that benefit from projects contribute to its financing, and speeding up a number of key energy interconnection projects across Europe.

High energy prices, risks on CBAM enforcement and promotion of lead markets, as well as increasing carbon costs are hampering domestic and export competitiveness with non-EU producers. The cement industry is fundamental to Europe’s construction value chain, which represents about 9 percent of the EU’s GDP. Its hard-to-abate production processes are also currently responsible for 4 percent of EU emissions, and it is investing heavily in measures aimed at achieving full climate neutrality by 2050, in line with the European Green Deal. Marcel Cobuz, CEO, TITAN Group  “We should take a longer view and ensure that the cement industry in EU stays competitive domestically and its export market shares are maintained.” However, the industry’s efforts to comply with EU environmental regulations, along with other factors, make it less competitive than more carbon-intensive producers from outside Europe. Industry body Cement Europe recently stated that, “without a competitive business model, the very viability of the cement industry and its prospects for industrial decarbonization are at risk.” Marcel Cobuz, member of the Board of the Global Cement and Concrete Association and CEO of TITAN Group, one of Europe’s leading producers, spoke with POLITICO Studio about the vital need for a clear policy partnership with Brussels to establish a predictable regulatory and financing framework to match the industry’s decarbonization ambitions and investment efforts to stay competitive in the long-term. POLITICO Studio: Why is the cement industry important to the EU economy?  Marcel Cobuz: Just look around and you will see how important it is. Cement helped to build the homes that we live in and the hospitals that care for us. It’s critical for our transport and energy infrastructure, for defense and increasingly for the physical assets supporting the digital economy. There are more than 200 cement plants across Europe, supporting nearby communities with high-quality jobs. The cement industry is also key to the wider construction industry, which employs 14.5 million people across the EU. At the same time, cement manufacturers from nine countries compete in the international export markets. PS: What differentiates Titan within the industry?  MC: We have very strong European roots, with a presence in 10 European countries. Sustainability is very much part of our DNA, so decarbonizing profitably is a key objective for us. We’ve reduced our CO2 footprint by nearly 25 percent since 1990, and we recently announced that we are targeting a similar reduction by 2030 compared to 2020. We are picking up pace in reducing emissions both by using conventional methods, like the use of alternative sources of low-carbon energy and raw materials, and advanced technologies. TITAN/photo© Nikos Daniilidis We have a large plant in Europe where we are exploring building one of the largest carbon capture projects on the continent, with support from the Innovation Fund, capturing close to two million tons of CO2 and producing close to three million tons of zero-carbon cement for the benefit of all European markets. On top of that, we have a corporate venture capital fund, which partners with startups from Europe to produce the materials of tomorrow with  very low or zero carbon. That will help not only TITAN but the whole industry to accelerate its way towards the use of new high-performance materials with a smaller carbon footprint. PS: What are the main challenges for the EU cement industry today?  MC: Several factors are making us less competitive than companies from outside the EU. Firstly, Europe is an expensive place when it comes to energy prices. Since 2021, prices have risen by close to 65 percent, and this has a huge impact on cement producers, 60 percent of whose costs are energy-related. And this level of costs is two to three times higher than those of our neighbors. We also face regulatory complexity compared to our outside competitors, and the cost of compliance is high. The EU Emissions Trading System (ETS) cost for the cement sector is estimated at €97 billion to €162 billion between 2023 and 2034. Then there is the need for low-carbon products to be promoted ― uptake is still at a very low level, which leads to an investment risk around new decarbonization technologies. > We should take a longer view and ensure that the cement industry in the EU > stays competitive domestically and its export market shares are maintained.” All in all, the playing field is far from level. Imports of cement into the EU have increased by 500 percent since 2016. Exports have halved ― a loss of value of one billion euros. The industry is reducing its cost to manufacture and to replace fossil fuels, using the waste of other industries, digitalizing its operations, and premiumizing its offers. But this is not always enough. Friendly policies and the predictability of a regulatory framework should accompany the effort. PS: In January 2026, the Carbon Border Adjustment Mechanism will be fully implemented, aimed at ensuring that importers pay the same carbon price as domestic producers. Will this not help to level the playing field? MC: This move is crucial, and it can help in dealing with the increasing carbon cost. However, I believe we already see a couple of challenges regarding the CBAM. One is around self-declaration: importers declare the carbon footprint of their materials, so how do we avoid errors or misrepresentations? In time there should be audits of the importers’ industrial installations and co-operation with the authorities at source to ensure the data flow is accurate and constant. It really needs to be watertight, and the authorities need to be fully mobilized to make sure the real cost of carbon is charged to the importers. Also, and very importantly, we need to ensure that CBAM does not apply to exports from the EU to third countries, as carbon costs are increasingly a major factor making us uncompetitive outside the EU, in markets where we were present for more than 20 years. > CBAM really needs to be watertight, and the authorities need to be fully > mobilized to make sure the real cost of carbon is charged to the importers.” PS: In what ways can the EU support the European cement industry and help it to be more competitive? MC: By simplifying legislation and making it more predictable so we can plan our investments for the long term. More specifically, I’m talking about the revamping of the ETS, which in its current form implies a phase-down of CO2 rights over the next decade. First, we should take a longer view and ensure that the cement industry stays competitive and its export market shares are maintained, so a policy of more for longer should accompany the new ETS. > In export markets, the policy needs to ensure a level playing field for > European suppliers competing in international destination markets, through a > system of free allowances or CBAM certificates, which will enable exports to > continue.” We should look at it as a way of funding decarbonization. We could front-load part of ETS revenues in a fund that would support the development of technologies such as low-carbon materials development and CCS. The roll-out of Infrastructure for carbon capture projects such as transport or storage should also be accelerated, and the uptake of low-carbon products should be incentivized. More specifically on export markets, the policy needs to ensure a level playing field for European suppliers competing in international destination markets, through a system of free allowances or CBAM certificates, which will enable exports to continue. PS: Are you optimistic about the future of your industry in Europe?  MC: I think with the current system of phasing out CO2 rights, and if the CBAM is not watertight, and if energy prices remain several times higher than in neighboring countries, and if investment costs, particularly for innovating new technologies, are not going to be financed through ETS revenues, then there is an existential risk for at least part of the industry. Having said that, I’m optimistic that, working together with the European Commission we can identify the right policy making solutions to ensure our viability as a strategic industry for Europe. And if we are successful, it will benefit everyone in Europe, not least by guaranteeing more high-quality jobs and affordable and more energy-efficient materials for housing ― and a more sustainable and durable infrastructure in the decades ahead. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Titan Group * The advertisement is linked to policy advocacy around industrial competitiveness, carbon pricing, and decarbonization in the EU cement and construction sectors, including the EU’s CBAM legislation, the Green Deal, and the proposed revision of the ETS. More information here.

With the European Green Deal and the Clean Industrial Deal, the EU set a clear course for the economic transition, serving Europe’s strategic interests of competitiveness and growth while also tackling climate change. For the EU to reach its industrial decarbonization and competitiveness objectives, the Draghi report identifies an annual investment gap of up to €800 billion. High-quality, reliable and comparable corporate disclosures, including on sustainability risks and impacts, are key to inform investment decisions and channel financing for the transition. EU rules on corporate sustainability reporting have been expected to fill the existing data gap. While simplification as such is a helpful aim, it looks like the Omnibus initiative is going too far. With the current direction of travel, confirmed by the Council in its agreement on 24 June, the Omnibus is likely to severely hinder the availability of comparable environmental, social and governance (ESG) data, which investors need to scale up investment for industrial decarbonization and sustainable growth, thus impairing their capacity to support the just transition. > The Omnibus is likely to severely hinder the availability of comparable > environmental, social and governance (ESG) data, which investors need to scale > up investment for industrial decarbonization and sustainable growth. The European Commission introduced the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy to respond to real needs, voiced over the years by investors and businesses alike. These rules were intended to close the ESG data gap, bring clarity and structure to the disclosures needed to allocate capital effectively for a just transition, and foster long-term value creation. These frameworks were not meant as ‘tick-box compliance exercises’, but as practical tools, designed to inform capital allocation, and better manage risks and opportunities. Now, the Omnibus proposal risks steering these rules of course. Although investors have repeatedly shown support for maintaining these rules and their fundamentals, we are now witnessing a broad-scale weakening of their core substance. Far from delivering clarity, the Omnibus initiative introduces uncertainty, penalizes first movers, who are likely to face higher costs due to adjusting the systems they put in place, and undermines the foundations of Europe’s sustainable finance architecture at a time when certainty is most needed to scale up investment for a just transition to a low-carbon economy. THE COST OF DOWNGRADING SUSTAINABILITY DATA The EU’s reporting framework is a critical enabler of investor confidence, for them to support the clean transition, and resilience building of our economy. It aims to replace a fragmented patchwork of voluntary disclosures with reliable, comparable data, giving both companies and investors the clarity they need to navigate the future. Let’s be clear: streamlining corporate reporting is a goal that is shared by investors and businesses alike. But simplification must be smart: by cutting duplications, not cutting corners. The Omnibus is likely to result in excluding up to 90 percent of companies from the scope of CSRD and EU Taxonomy reporting, if not more, should the council’s position, which includes a €450 million turnover threshold, be retained. This would significantly restrict the availability of reliable data that investors need to make investment decisions, manage risks, identify opportunities and comply with their own legal requirements. Voluntary reporting is unlikely to bridge this data gap, both in terms of the number of companies that will effectively report and regarding the quality of information reported. Using basic, voluntary questionnaires that were designed for very small entities would result in piecemeal disclosures, downgrading data quality, comparability and reliability. Market feedback has already demonstrated that it is necessary to go beyond voluntary reporting to avoid these shortcomings. This is precisely why EU regulators designed the CSRD in the first place. As a result of the Omnibus initiative, investors will likely focus on a limited number of investee companies that are in scope of CSRD and provide reliable information — limiting the financing opportunities for smaller, out-of-scope companies, including mid-caps. This will also restrict the offer and diversity of sustainable financial products — despite the clear appetite of end investors, including EU citizens, for these investments. This runs counter to the objectives of scaling-up sustainable growth laid down in the Clean Industrial Deal, and of mobilizing retail savings to help bridge the EU’s investment gap as proposed in the Savings and Investments Union. CUTTING DUE DILIGENCE BLINDS INVESTORS The CSDDD is also facing significant risks in the current institutional discussions. Originally, the introduction of a meaningful framework to help companies identify, prevent and address serious human rights and environmental risks across their value chains marked an important step to accelerate the just transition to industrial decarbonization and sustainable value creation. For investors, the CSDDD provides a structured approach that improves transparency and enables a more accurate assessment of material environmental and human rights risks across portfolios. This fills long     standing gaps in due diligence data and supports better-informed decisions. In addition, the CSDDD provisions to adopt and implement corporate transition plans including science-based climate targets, in line with CSRD disclosures, are providing an essential forward-looking tool for investors to support industrial decarbonization, consistent with the EU’s Clean Industrial Deal’s objectives. By limiting due diligence obligations to direct suppliers (so-called Tier 1), the Omnibus proposal risks turning the directive into a compliance formality, diminishing its value for businesses and investors alike. The original CSDDD got the fundamentals right: it allowed companies to focus on the most salient risks across their entire value chain where harm is most likely to occur. A supplier-based model would miss precisely the meaningful information and material risks that investors need visibility on. It would also diverge from widely adopted international standards such as the OECD guidelines for Multinational Companies and the UN Guiding Principles. The requirement for companies to adopt and implement their climate transition plans is also at risk, being seen as overly stringent. However, the obligation to adopt and act on transition plans was designed as an obligation of means, not results, giving businesses flexibility while providing investors with a clearer view of corporate alignment with climate targets. Watering down or downright removing these provisions could effectively turn transition plans into paperwork with no follow-through and negatively impact the trust that investors can put in corporate decarbonization pledges. Additionally, the council proposal to set the CSDDD threshold to companies above 5,000 employees, if adopted, will result in fewer than 1,000 companies from a few EU member states being covered. Weakening the CSDDD would add confusion and leave companies and investors navigating a patchwork of diverging legal interpretations across member states. A SMARTER PATH TO SIMPLIFICATION IS NEEDED How the EU handles this moment will speak volumes. Over the past decade, the EU has become a global reference point in sustainable finance, shaping policies and practices worldwide. This is proof that competitiveness and sustainability can reinforce, not contradict, one another. But that leadership is now at risk. > How the EU handles this moment will speak volumes. Over the past decade, the > EU has become a global reference point in sustainable finance, shaping > policies and practices worldwide. The position taken by the council last week does not address some of the major concerns from investors highlighted above and would lead to even more fragmentation in reporting and due diligence requirements across companies and member states. While the window for change is narrowing, the European Parliament retains the capacity to steer policy back on track. The recipe for success and striking the right balance between stakeholders’ concerns is to streamline rules while preserving what makes Europe’s sustainability framework effective, workable and credible, across both sustainability reporting and due diligence. Simplify where it adds value, but don’t dismantle the tools that investors rely on to assess risk, allocate capital and support the transition. What the market needs now is not another reset, but consistency, continuity and stable implementation: technical adjustments, clear guidance, proportionate regimes and legal stability. The EU must stand by the rules it has put in place, not pull the rug out from under those using them to finance Europe’s future. --------------------------------------------------------------------------------

The European Commission’s state aid rules for the Clean Industrial Deal aim to stoke demand for clean-tech products and ease investments from “risk averse” pension funds, according to a draft obtained by POLITICO. The document is due to be published on Feb. 26 as part of the European Union’s Clean Industrial Deal, a wide package of measures to help industry reduce its climate emissions. Executive Vice President Teresa Ribera had been tasked with finding ways to simplify and extend state aid to businesses. While the Commission is set to cap subsidies for clean-tech manufacturing at €75 million per project, down from €150 million under a current program, it also opened up new options for governments to fund industry decarbonization and renewable energy production. It also sets a €350 million limit for loans and caps state guarantees at €525 million for clean-tech businesses in some regions, part of a range of measures that also allow governments to pay up to 50 percent of investments in equipment or machinery using hydrogen and 35 percent for equipment to produce renewable energy. It spoke of the need to incentivize investments in Europe where “considerable funds will need to be mobilised, mainly from private sources.” “Public support will be necessary to advance decarbonisation efforts,” it said, and the framework intends to provide “a longer planning horizon and businesses with investment predictability and security” and help “the de-risking of investments in portfolios of projects” to encourage more risk-averse pension funds and insurers. It said governments could also introduce tax incentives to help companies purchase clean-tech assets not necessarily within state aid control — as long as they didn’t favor certain companies. Separately, the draft shows the Commission trying to funnel more help to smaller companies and disadvantaged regions. Industry groups were positive about the updates. Stefan Sagebro, from the Confederation of Swedish Enterprise, said the clean-tech thresholds are “not unreasonable” since they are aimed at the “mass production of goods where there is intense competition” and where officials should be “more careful” about providing subsidies. Vincent van Hoorn, of the lobbying group Cleantech for Europe, said the framework needed to “marry speed and agility to provide much more predictability to clean-tech entrepreneurs.” He was glad to see the Commission recognizing “the unique advantages of fiscally efficient tools such as guarantees.”

BRUSSELS — The European Union’s upcoming industrial decarbonization strategy will revolve around six thematic “pillars” ranging from energy prices and workforce issues to recycling and trade, a senior European Commission official told POLITICO. The Commission is expected to unveil its much-anticipated Clean Industrial Deal, a multi-year plan to boost the EU’s traditional energy-intensive industries and emerging clean technology sectors, on Feb. 26, within the first 100 days of its new term. While work on drafting the plan is still in the early stages, an outline is taking shape. The official, speaking anonymously to discuss policies still being developed, said the six thematic areas include energy security and energy prices; financing; recycling and critical raw materials; labor and skills; lead markets; and global action. A second Commission official confirmed the themes. High energy prices in the EU — relative to other advanced economies — are making it harder for companies in the bloc to compete with foreign rivals. The Commission intends to publish an “action plan” on affordable energy alongside the Clean Industrial Deal. In her speech at the World Economic Forum in Davos on Tuesday, Commission President Ursula von der Leyen signaled that infrastructure will be at the heart of the energy plan. “Not only must we continue to diversify our energy supplies and expand clean sources of generation, [but] we must also mobilize more private capital to modernize our electricity grids and storage infrastructure,” she said. “We must [also] better connect our clean and low-carbon energy systems. All of this will be part of a new plan that we will present in February.” On financing, the Commission must square a tricky circle: While it cannot prejudge the outcome of high-stakes negotiations on the EU’s long-term budget, many companies and countries are expecting a funding boost for struggling industries. On recycling and critical raw materials, the Commission will propose a Circular Economy Act next year to tackle resource shortages and reduce waste. On labor and skills, the EU’s climate and competition chief, Teresa Ribera, has spoken at length — if not in detail — about the importance of social policy elements in the Clean Industrial Deal. At an event on Monday, she said developing the Clean Industrial Deal “requires thinking in terms of skills, labor force and job opportunities.” At another event last week she said: “Many of the problems we are experiencing right now … may be connected to the fact that there are many Europeans that feel that the institutions do not care about them. That we are speaking about business opportunities but we do not speak about social difficulties. That is very, very important.” On recycling and critical raw materials, the Commission will propose a Circular Economy Act next year to tackle resource shortages and reduce waste. | Liselotte Sabroe/Ritzau Scanpix/AFP via Getty Images With lead markets, the Commission is referring to measures that create demand for decarbonized goods, such as setting quotas. One example would be mandating a certain percentage of climate-friendly materials in public procurement contracts. EU Climate Commissioner Wopke Hoekstra told MEPs in the European Parliament’s industry committee last week that to help both emerging and traditional industries, “we need to make sure we come up with lead markets” as well as cut red tape. As for the international element of the Clean Industrial Deal, Ribera signaled in Monday’s speech that the Commission would reach for a combination of diplomacy and trade measures. “It connects back to the access to raw materials, to the development of relationships with [other] countries … to ensure secure value chains,” she said. “But it also comes back to trade relations and the mirror effect … when we invest abroad and when we open our markets to foreign investors.” So-called mirror clauses in bilateral trade deals require that any imports from the other country “mirror” the EU’s strict environmental and production standards. “We cannot think of building a Clean Industrial Deal and [manufacture] more in Europe and at the same time not make full use of our external policies and capacities,” Ribera said.

The European Union’s Competitiveness Compass has been postponed by another week to Jan. 29, according to an agenda obtained by POLITICO. The delay was confirmed by a European Commission official and an EU diplomat, who both spoke on condition of anonymity because planning details aren’t yet public. The proposal, which aims to set the economic strategy for the Commission’s work until 2029, was initially due to be unveiled on Wednesday, but was postponed after Commission President Ursula von der Leyen became ill with pneumonia. How sick she was only became clearer last week when the Commission confirmed that she had been hospitalized and is now recovering at her home in Germany. An earlier agenda showed the proposal would be presented next week but the latest planning document, dated Jan. 13, shows another week of delay. “I hope the date will remain Jan. 29,” the Commission official told POLITICO. The Competitiveness Compass is the keystone for a series of initiatives the Commission has scheduled for the next few months, including the Clean Industrial Deal due in February. Drawing from reports from Mario Draghi and Enrico Letta on how to boost the EU’s economy, the initiative aims to tackle the EU’s innovation gap with global rivals, ensure the bloc’s economic security and make progress on decarbonizing EU industry.

BRUSSELS — Stéphane Séjourné, the European Union’s industry czar, wants to move fast on emergency plans to shore up the bloc’s embattled industry, he told POLITICO in an interview. The European Commission is “going to give a signal to the markets and investors, notably on the scope of the reforms and real investments we want to make” within weeks, said Séjourné, the Commission’s executive vice president for prosperity and industrial strategy. This aims to answer European industry’s calls for help with higher energy prices, burdensome environmental regulation and global rivals that can undercut them on price. The planned Clean Industrial Deal, due on Feb. 26, will include “an emergency and strategic plan for certain sectors in difficulty and a long-term strategy for all players and sectors,” he said. This will work as “a business plan” making it clear how much investment or skilled workers they need, he said. The Commission is preparing emergency plans for energy-intensive industries such as steel, aluminum and other metals, cement, and energy, he said. To stoke demand, “we’re also going to create decarbonized public procurement markets” by “moving toward public procurement with clauses that enable us to reinforce the rules favoring made-in-Europe products, for example, and a green label on industry,” he said. This will include a market for green steel “that does not exist today.” Séjourné is pushing to include chemicals — which he dubbed “the industry of industries” — as one of several strategic sectors. The EU should adopt a strategy that is “both defensive and offensive” for its relationship with the United States, Séjourné said, weeks before the return of Donald Trump to the White House. | Eva Marie Uzcategui/Getty Images Cleantech, biotech and other technologies that can boost productivity also form an “industrial flagship” and the EU needs “to support them in their scale-up.” DEALING WITH TRUMP The EU should adopt a strategy that is “both defensive and offensive” for its relationship with global competitors including the United States, Séjourné said, just weeks before the official return of Donald Trump to the White House. “At a time when all the continents are also thinking about their particular interests” Europe must “overcome its naivete in the public policies it pursues. So, yes to Europe, and yes to ‘made in Europe,’” he said. He urged the EU to strike a trade pact with the U.S. quickly to avoid a costly trade war. One of the first challenges for the Commission will be to keep the EU’s 27 national governments “united on our American strategy,” Séjourné said. Within the EU, the Commission plans next week to present its overall “economic doctrine for the next five years” in the form of a competitiveness compass. A single market strategy will come by June and a competitiveness fund to boost innovation is due later this year. Séjourné also aims to ease regulatory requirements for businesses and cut by half the amount of data they need to supply for various regulations, he said. An “omnibus bill” answers calls from EU governments on overregulation and it will also simplify procedures to access EU funds and InvestEU programs.

Get ready for Ursula von der Leyen 2.0. After a first term marked by a pandemic and the outbreak of war on Europe’s doorstep, the European Commission president is gearing up for another spin as the European Union’s top official. While showdowns with geopolitical rivals like Russia, China and Donald Trump’s United States are likely to occupy much of her attention, there will be plenty of fights back home for her as well. POLITICO lists the major battles ahead.  DEPORTATIONS VS. HUMAN RIGHTS The final months of von der Leyen’s first term were defined by a major push from EU capitals to crack down on irregular migration into the bloc. The start of her second is likely to be all about migration as well, as leaders look to lock in commitments made during their last gathering in Brussels. First up: Von der Leyen’s Commission is expected to table a proposal for a new directive on “returns,” which is EU jargon for deportations to countries outside the country’s borders. EU capitals expect the Commission to table proposals geared at facilitating deportations in the coming months. Next up, and considerably more tricky is the idea of opening so-called return hubs outside the bloc’s borders, which are really processing centers where asylum-seekers would be housed while their applications are processed. Italy’s experimentation with this idea via a bilateral deal with Albania has already come in for criticism from courts in Rome. The challenge for von der Leyen will be to carry through with the bloc’s agenda on migration without falling into an ethical trap or leading the EU to be accused of inhumane practices. ENLARGEMENT VS. THE RISK OF INTERNAL DIVISION Another major task in von der Leyen’s inbox is EU enlargement. After Russia’s assault on Ukraine, the EU opened its arms — symbolically — to the membership applications of Ukraine and Moldova, kickstarting a process that’s likely to take years to complete. Von der Leyen will also have to shepherd the applications of Western Balkan states that have been in the EU’s waiting room for much longer. There are clear upsides to enlarging the EU beyond its current cast of 27 members. Expanding the bloc helps to grow its internal market and fight population decline while showing that the EU has a far greater power of attraction as a geopolitical power, than, say, Russia. But it’s also a politically perilous exercise. Amid broad statements of support for enlargement from EU capitals, there are fears that letting in populous countries like Ukraine will flood the EU’s internal market with cheap labor and products, putting other members — particularly neighbors like Poland — at a disadvantage.  Get ready for Ursula von der Leyen 2.0. | Frederick Florin/Getty Images Such concerns are likely to lead von der Leyen to proceed with caution. But she will also be aware that keeping candidate countries in the EU’s waiting room for too long has its own risks, namely disillusionment and the temptation to pivot toward Moscow.  FARMER VS. REFORMERS The Common Agricultural Policy accounts for more than a third of the EU budget — and 20 million European farmers want to keep it that way.  Ursula von der Leyen and her advisers have other ideas: They are desperate to find money to pay for hundreds of billions in investments to restore Europe’s industrial competitiveness — and have their eyes on that vast pot of cash. So far, there is no sign that either the powerful EU farm lobby, which has a vise-like grip on the Commission’s agriculture department, or agriculture ministers in the bloc’s 27 capitals, will give up farming entitlements and instead link payouts to performance targets, such as expanding organic agriculture.  The new Agriculture Commissioner Christophe Hansen will find it hard enough to preserve the fragile consensus on farming reforms, which he is supposed to pour into a 100-day “vision” that would seek to placate angry farmers by easing environmental burdens and boosting their incomes. And that will just be the hors d’oeuvre ahead of far tougher bargaining on the CAP ahead of the next multiyear fiscal term starting in 2028. COMPETITION VS. COMPETITIVENESS With the EU’s economy stagnating, nothing looms as large for von der Leyen as the need to kickstart the bloc’s competitiveness. Whether it’s American dominance in artificial intelligence, or the recent explosion of Chinese electric vehicle exports, European firms are having their lunch eaten by their overseas rivals, which benefit from their scale and their deeper pockets. Policymakers in Brussels are desperately trying to think up ways to make sure native businesses aren’t left in the dust. One idea from former European Central Bank chief Mario Draghi: Help EU companies scale up. The telecommunication industry is a case in point: The EU has 34 mobile network operators compared with just three in the U.S. The solution? A relaxation of merger rules to allow established players to snap up their smaller rivals.  The Spanish socialist Teresa Ribera is heading up the powerful competition portfolio. She will play a role in building up European capabilities in sectors ranging from finance to defense. She will need to answer an existential question lying ahead for competition policy, on whether Europe sticks to an orthodoxy that keeps prices low and companies small, or loosens its approach to let bigger, hopefully more globally competitive players emerge. FREE SPEECH VS. ONLINE SAFETY During von der Leyen’s first term, the EU came up with some of the world’s most far-reaching legislation for the digital world, namely the AI Act covering artificial intelligence and the Digital Services Act (DSA) that covers online platforms. The latter set of laws, now in force across the bloc, impose stringent regulations on platforms like Elon Musk’s X or Chinese-owned TikTok over how they monitor their platforms for illegal content. But the world has changed since the DSA came into force, not least because Musk is now the owner of X and has declared war on what he calls “censorship” from regulators.  One idea from former European Central Bank chief Mario Draghi: Help EU companies scale up. | Pool Photo Teresa Suarez/Getty Images The South African billionaire is also a key ally of U.S. President-elect Donald Trump, and U.S. Vice President-elect JD Vance has gone so far as to link U.S. support for NATO to the EU’s treatment of Musk’s X platform. These warnings will have to be weighed carefully as the Commission moves ahead with an investigation into X, which former digital supremo Thierry Breton accused of flouting the EU’s digital rulebook. SECURITY VS. SPENDING As the EU contemplates a future in which Washington invests less in NATO and withdraws its support for Ukraine, the bloc is getting ready to fight over money.  If the bloc is to take more responsibility for its own security, it will require huge investments in countries not accustomed to spending heavily on defense. Von der Leyen has identified €500 billion in investments needed to boost the bloc’s military-industrial apparatus. The only problem: Where to find it when the continent’s largest economies are struggling and when huge sums are needed to deal with the climate crisis and competitiveness.  The other battle is over whether the bloc’s defense funds would be used to buy only made-in-the-EU equipment. Some countries, France chiefly, argue Europe needs to invest in its own production to prime-pump a defense industry that has shrunk considerably since the end of the Cold War. That’s being weighed against the need to be able to obtain weapons systems quickly and efficiently, as well as the risk of irritating Washington. Indeed, U.S. officials make no secret of the fact that they don’t like “Buy European” as an idea. Once Trump is in the White House, the administration could use purchases of U.S. weapons as a way to divide and conquer among EU states, privileging those that continue to buy from America and shunning those that don’t. GREEN GOALS VS. TIGHT PURSE STRINGS  The Clean Industrial Deal promises to be one of the most defining legislative efforts of the next Commission — even if the bill’s actual contents remain vague. The aim, according to the Commission, is to ramp up investments in clean technologies and energy-intensive sectors to keep Europe’s economy humming without losing sight of the bloc’s green objectives. Yet the “how” remains shrouded in mystery given EU countries’ reluctance to put cash on the table. So far, there is only one instrument the EU’s executive has explicitly called for: a European Competitiveness Fund. But its broad scope suggests the clean tech sector will have to compete against other capital-intensive sectors, such as AI and space, to get the money it desperately needs.  Making this more complicated, the Clean Industrial Deal will have several masters. Top EU Commissioners Teresa Ribera and Stéphane Séjourné will oversee the master plan, but one of its key components, dubbed the Industrial Decarbonization Accelerator Act (essentially a bill to help clean up the most carbon-belching sectors) will fall under the remit of European Climate Commissioner Wopke Hoekstra, who will also be busy trying to finalize talks to reform the Energy Taxation Directive, which governs tax rates for various energy forms. NATIONAL INTERESTS VS. EU PRIORITIES The European Commission’s proposal this summer for its next seven-year budget will be the official opening salvo to fierce negotiations between national capitals that will stretch until the end of 2027.  One of the most politically sensitive topics in Brussels, the €1.2 trillion budget governs spending on anything from support to Ukraine to film subsidies. Hawkish Eastern European and Nordic countries including Poland and Sweden are keen to boost EU spending on defense, while Southern ones such as Italy and Greece would like more cash to stem migrant departures from Africa.  The Industrial Decarbonization Accelerator Act will fall under the remit of European Climate Commissioner Wopke Hoekstra. | Sean Gallup/Getty Images One of the big questions is how many hoops countries will need to jump through to access their cash. The Commission would like capitals to implement key economic reforms in exchange for access to their share of EU money. But countries receiving the bulk of the funding — mainly in Eastern Europe — are no fans of this approach. In 2025, EU countries will set their red lines for the negotiations. But if the past is anything to go by, leaders will squabble and only reach a final agreement at the last moment.  CLEAN TECH VS. TOXIC RISK Countries and companies are rushing to develop new technologies in an effort to halt catastrophic climate change — but many such solutions are manufactured with chemicals with unforeseen side effects that pose grave risks of their own. That includes “forever chemicals” or PFAS, the risks of which science is only beginning to understand. Concerns over PFAS have led to an EU effort to phase out the chemicals in a range of sectors the bloc is counting on for the green transition. The EU executive is also due to come up with a revision of the EU’s chemicals safety framework to better protect its citizens from harmful substances. While the European Commission pledged to reduce the bloc’s pollution to levels “no longer considered harmful” to human health and the environment by 2050 — that was back in 2021. Three years, two wars and an energy crisis later — and with a debt crisis potentially brewing — there are other priorities in play.  Over the next few years, EU lawmakers and countries will fight over how to make sure a tighter regulatory framework for chemicals doesn’t impede the clean energy transition while still (and, in theory, primarily) keeping the population and environment safe from toxic pollution.  Jacopo Barigazzi, Douglas Busvine, Leonie Cater, Federica Di Sario, Carlo Martuscelli, Francesca Micheletti, Barbara Moens, Gregorio Sorgi and Nicholas Vinocur contributed to this report.