The European Green Deal represents a comprehensive EU climate policy framework that is fundamentally reshaping conditions for industry, energy, and transport through binding emission reduction targets. Its impact on competitiveness will depend on whether the pace of regulation matches technological and infrastructure readiness. The costs of decarbonization are often underestimated and insufficiently communicated at the political level, while their distribution across member states and sectors remains inadequately addressed. Fixed deadlines and regulatory requirements concentrate demand into short timeframes, which can artificially increase the overall cost of the transition. A key condition for a successful transition is prioritizing the decarbonization of electricity generation as the foundation for all downstream sectors. This should be accompanied by an active industrial policy that actively guides the transition, rather than relying solely on regulatory adaptation.

Key takeaways:

• The Green Deal requires an active industrial policy. Without coordinated public action to reduce investment risks and develop the necessary infrastructure, the negative impacts on competitiveness are likely to outweigh the benefits of the transition.
• The regulatory design of the Green Deal increases the cost of the transition. Fixed legislative timelines concentrate demand for technologies, materials, and capacity into narrow timeframes, creating demand shocks and driving up overall costs.
• Energy decarbonization must take priority over all downstream sectors. Most decarbonization pathways in industry, transport, and buildings depend on access to sufficient amounts of affordable, low-carbon electricity.
• Czechia’s position is specific and requires its own strategy. A high share of industry in GDP and above-average energy intensity make the Czech Republic one of the most vulnerable EU economies to the negative impacts of the Green Deal.

Policy paper– Ondřej Kovařík

The analysis is in PDF under the link below.