Implications of the EU’s Competitiveness Agenda for European Trade Associations
The EU Competitiveness Compass, launched in early 2025, marked a strategic pivot in how the European Union approaches industrial policy, innovation, and global economic positioning. For European trade associations, this shift presents both opportunities and challenges across advocacy, operations, and member engagement.
The Compass is a communication that sets out the EU’s joint agenda for decarbonisation and competitiveness, adopting several of the recommendations contained in the Draghi Report. With the Clean Industrial Deal as a key enabler, existing initiatives like the Net Zero Industry Act and Critical Raw Materials Act are strengthened with new initiatives on circular economy, energy affordability, industrial permitting, skills development, financing, state funding and public procurement reform.
This shift signals a move away from top-down regulatory oversight toward strategic enablement, creating conditions for European industries to thrive globally while meeting climate goals. Crucially, discussions are now taking place at sector level for key industrial clusters such as the automotive and chemical industries, typically in the form of Sector Dialogues attended by EU Commissioners, industry representatives and social partners.
Alignment of policy and industry action
The main opportunity for trade associations is to play an active role in shaping this reform agenda centred around competitiveness, contributing with investment and regulatory proposals to Europe’s industrial transformation.
Amongst the trade associations we are working with at Ricardo, some key focus areas have emerged since the launch of the Competitiveness Compass and the Clean Industrial Deal.
Key areas of focus for trade associations in 2025-26 include the following:
- Circularity and resource efficiency
- Critical raw materials and lifecycle innovation
- Carbon pricing for competitiveness
- Digitalisation and product safety
- Industrial emissions and zero pollution
These topics align closely with the Compass’s focus areas, suggesting that trade associations are already positioned to play a central role in shaping and implementing the EU’s competitiveness agenda. These topics are also reflected in the recently published 2026 European Commission Work Programme, a strategic document where key initiatives for the coming year are confirmed, including:
- A Circular Economy Act
Aiming to harmonise, across Member States, end-of-waste (EoW) criteria, Extended Producer Responsibility (EPR) fees, and tax guidelines for recycled materials, creating a unified framework to boost the uptake of secondary raw materials and reduce regulatory fragmentation. Ricardo and partners support the European Commission in the Impact Assessment of the proposed measures, currently under way. - A Climate Package for the Decade Ahead
Updating the EU Emission Trading System for transport and industrial sectors, as well as reviewing the market stability reserve to ensure carbon price predictability. Ricardo has been supporting the Commission on the design and implementation of the ETS and will continue to provide evidence in this phase. - An Energy Union Package
Including the development of legislation covering the infrastructure and market aspects of transporting CO2. Ricardo and partners are contributing to the design of this regulatory framework by exploring storage potential at European sites, and competition dynamics in this emerging sector.
The voice of EU industry
By leveraging their sector expertise and networks, trade associations can position themselves as strategic partners in advancing Europe’s industrial and environmental transformation. The Competitiveness Agenda offers a framework to:
- At a minimum, support members in navigating complex regulatory landscapes.
- As agents of change, contribute to shaping policy through evidence-based advocacy.
- To elevate their role, drive innovation by connecting with EU institutions, social partners and financing institutions.
Associations and trade bodies can proactively shape the debate by identifying early on the key priority topics and trends where they can play a role. Then, they need to work hard to coalesce their members’ interests around those priority topics and develop evidence-based strategies that present a positive agenda for reform and investment vis-à-vis policymakers, workers and consumers.
This shift also provides an opportunity for associations to review their internal governance, membership structure and overall impact. By comparing industry associations in the EU with those in other global economies also provides an opportunity to reassess industry engagement in Europe and build alliances across borders.
Further information and support
Please get in touch with any questions or to find out more about how Ricardo works with trade associations to equip them with the insights, evidence and tools required to drive positive sectoral reform, maximising opportunities and minimising risk as they navigate the evolving EU policy landscape.
