European Council conclusions on competitiveness and twin transition 19:45 On 23 October, the European Council adopted conclusions on competitiveness and twin transition.[...]

32. The European Council held an in-depth discussion on how to further reinforce EU competitiveness, building on its conclusions of March and June 2025 and focusing on simplification, a competitive green transition and a sovereign digital transition. It calls for a step change in the EU's action and will keep all strands of the competitiveness and Single Market agenda under review, as this is key for sustaining Europe's prosperity and social model. The European Council calls on the Commission and the co-legislators to take the implementation of the Single Market Strategy by 2028 ambitiously forward, also in the light of the Commission's upcoming roadmap.

Simplification

33. The European Council reaffirms the urgent need to advance an ambitious and horizontally-driven simplification and better regulation agenda at all levels - EU, national and regional - and in all areas in order to ensure Europe's competitiveness, without undermining predictability, policy goals, high standards and the integrity of the Single Market.In particular it recalls the commitment to drastically reduce, as a matter of urgency, administrative, regulatory and reporting burdens for businesses, including SMEs, and public administrations.

34. Welcoming the progress achieved so far, the European Council urges the Commission and the co-legislators to accelerate their work, as a matter of utmost priority, on all files with a simplification or competitiveness dimension. In particular, the European Council welcomes the work done on the simplification omnibus packages on investment and the carbon border adjustment mechanism (CBAM), as well as the stop-the-clock measures on sustainability reporting, battery due diligence and chemicals. It urges the co-legislators to swiftly conclude work on the proposed simplification omnibus packages on sustainability reporting and due diligence, agriculture, small mid-caps and digitalisation, defence readiness and chemical products. The package on sustainability reporting should be adopted by the end of the year and the others as soon as possible in early 2026. The European Council also calls on the Commission, in line with the respective competences under the Treaties, to propose without delay an optional 28^th company law regime allowing innovative companies to scale up.

35. The European Council calls on the Commission to swiftly bring forward further ambitious simplification packages among others on the automotive industry, military mobility, digital, financial services, transport, the environment, energy, and food safety, as well as a review of the REACH Regulation aiming to boost the competitiveness of the chemical sector. It also recalls the importance of a strong pharmaceutical sector in Europe.

36. The European Council also reiterates the need to avoid over-regulation and the introduction of new administrative burdens, in particular on SMEs, throughout the legislative and implementation processes at all levels, and calls for legislative and regulatory self-restraint, in line with a 'simplicity by design' approach.

37. The European Council calls on the Commission to intensify its efforts to stress-test the EU acquis. In this context, it invites the Commission to:

a) identify additional potential for further simplification and strengthening competitiveness, including in the context of the report assessing the overall situation of the banking system in the Single Market envisaged for 2026;

b) explore new proposals to streamline and accelerate planning and permitting procedures in Member States;

c) intensify simplification efforts regarding delegated and implementing acts;

d) consider the withdrawal of proposals, where appropriate.

38. The European Council calls on the Council (General Affairs) to assess the legislative work programme of the Commission in the light of these objectives.

A competitive green transition

39. The existential threat posed by climate change underpins the Union's commitment to the Paris Agreement and drives the Union's determination to harness the full potential of the industrial renewal and transformation of its economies required to create the clean technologies, markets, industries and high-quality jobs of the future. Enhancing the Union's competitiveness, bolstering its resilience, and advancing the green transition are mutually reinforcing objectives that must be pursued together.

40. For such a fundamental transformation to succeed, it must be fair and just, pragmatic, cost-effective and socially balanced, taking into account different national circumstances, providing affordable solutions across the economy and for citizens throughout the Union, so as to secure Europe's competitiveness and prosperity for present and future generations.

41. The European Council calls for an urgent stepping up of efforts to secure the supply of affordable and clean energy and build a genuine Energy Union before 2030, including by leveraging the new Energy Union Task Force. This will require ambitious electrification using all net-zero and low-carbon solutions, and investment in grids, storage and interconnections at national and EU level. In light of the negative impact of high energy prices on the global competitiveness of European industries, on the Union's strategic autonomy and on European households, the European Council calls on the Commission to accelerate work aimed at lowering energy prices and supporting sustainable energy production in the Union. In this context, the European Council welcomes the Commission's intention to submit relevant proposals as soon as possible.

42. The European Council recalls the urgent need to intensify collective efforts to ensure Europe's industrial renewal, modernisation and decarbonisation in a technologically neutral manner. It underlines in this context that particular attention should be paid to traditional industries, notably the automotive, shipping, and aviation industries as well as energy-intensive industries, such as steel and metals, chemicals, cement, glass and ceramics, and pulp and paper, so that they remain resilient and competitive in a global market and a challenging geopolitical environment. In this regard, it welcomes the recent Commission proposal to protect the European steel sector from unfair impacts of global overcapacity. It welcomes the Commission's intention to take forward the review foreseen under the Regulation on CO2 emissions performance standards for cars and vans, and calls for the swift presentation of this proposal, taking into account technological neutrality and European content. It looks forward to the Commission's proposal on industrial decarbonisation acceleration, which will contribute to boosting demand for 'made in Europe'. Further efforts are also needed to strengthen innovation and the Union's competitive edge in clean and digital technologies, and cutting-edge innovation.

43. In order to deter and counter unfair trade practices, the European Council invites the Commission to make effective use of all EU economic instruments.

44. In this context, the European Council held a strategic discussion on how to support the achievement of the EU's intermediate climate target for 2040.

45. In this regard, the European Council underlines the importance of taking into account the following elements:

a) the realistic contribution of carbon removals to the overall emission reduction effort, while taking into account the uncertainties of natural removals and ensuring that possible shortfalls would not be at the expense of other economic sectors;

b) the importance of contributing to the global emission reduction effort in a way that is both ambitious and cost-efficient, notably by defining an adequate level of high-quality international credits;

c) the need for a revision clause, in light of latest scientific evidence, technological advances, and evolving challenges to and opportunities for the EU's global competitiveness.

46. The European Council calls on the Commission to further develop the necessary enabling conditions to support European industry and citizens in achieving the 2040 intermediate target and, in this context, welcomes the recent letter from the President of the Commission on climate and competitiveness. It expects the Commission and the co-legislators to promptly take work forward.

47. The European Council takes note of the Commission's intention to propose measures to smoothen the entry into force of ETS2 and invites the Commission to present a revision of the ETS2 implementation framework, including all relevant aspects.

A sovereign digital transition

48. In the face of geopolitical shifts, rapid technological change, and growing global competition for innovation, talent and investment, it is crucial to advance Europe's digital transformation, reinforce its sovereignty and strengthen its own open digital ecosystem. This requires reinforced international partnerships and close collaboration with trusted partner countries and international organisations on digital innovation and governance.

49. In this regard, the European Council underlines that the Union's values, interests, and regulatory autonomy underpin EU action, including in the digital sphere. This means the EU will continue to foster human-centric technological solutions that protect individuals and their data, and safeguard digital accountability, transparency and societal resilience. The European Council stresses the importance of protecting minors, including through a digital age of majority for accessing social media, respecting national competences.

50. In addition, the Union's digital infrastructure and technological base must be protected, including by addressing risks arising from hybrid threats, cyber security challenges, and strategic dependencies. In order to avoid over-reliance on external suppliers, the European Council also underlines the importance of developing European technological capabilities and diversifying the EU's sources of critical raw materials.

51. To that end and to strengthen Europe's competitiveness, the Union must offer an environment conducive to increased innovation in the private sector, frontier technologies, the emergence of start-ups and the scaling up of European technological solutions. Market fragmentation, infrastructure gaps and high energy prices continue to hinder the growth potential of this technological transformation and must also be addressed. The European Council underlines that particular efforts are required to advance the rollout of connectivity infrastructure, deepen the Single Market for electronic communications, as well as to promote the development and deployment of sustainable digital systems, networks and technologies. It also calls for the Single Market to be digitalised and the uptake of digital technologies and interoperable data to be supported across the European economy.

52. The European Council takes note of the recent Commission initiatives on AI and quantum technology. It invites the Commission to remain ambitious regarding Europe's sovereign digital transformation in its upcoming proposals, including on the EU cloud and AI development.