The EU unveils measures to boost competitiveness. What does this mean for Norwegian exporters?
In January, the new European Commission set out its first major initiative of its term. The EU's Competitiveness Compass is a roadmap for strengthening the EU's competitiveness and addressing several of the challenges it currently faces: economic growth in the EU has stagnated, European companies lack capital for high-risk projects, and rules and regulations are holding back innovation in key sectors.
Unless we take action, Europe risks falling behind economically and technologically, putting European prosperity at risk.
«The Compass can make everyday business a little easier for you if you export to the EEA or are subject to EU sustainability reporting requirements here in Norway.»
Good news for Norwegian businesses
Norway is part of the EU's single market, so many of the initiatives will affect Norwegian businesses. The EU is also our largest export market. The Competitiveness Compass could therefore be good news for Norwegian businesses.
The Compass could make things a little easier for you if you export within the EEA or are subject to the EU's sustainability reporting requirements here in Norway.
The Compass may also make it more attractive to invest in green energy technologies and measures to cut emissions from existing production. However, it is uncertain how much the measures will actually simplify matters. The Compass primarily provides a basis for a series of planned initiatives to be presented over the coming months.
The Compass responds to the warnings in Mario Draghi's 2024 report and aims to deliver on his recommendations to
- Close the innovation gap
- Develop a shared strategy for decarbonisation and competitiveness
- Strengthen European security and reduce dependencies.
Measures will focus on five priority areas:
- Simplify regulations and processes
- Remove barriers in the single market
- Funding to support innovation and growth
- Competence building and quality jobs to secure a skilled workforce
- Better coordination of policy at European and national level.
'A simplification effort on an unprecedented scale'
The heading 'Simpler, easier, faster' shows that the Commission recognises how today's extensive regulations and reporting requirements make it difficult for European businesses to devote resources to development and scaling.
«‘The burden created by complex regulations and lengthy licensing processes has become a drag on Europe’s competitiveness’»
The EU will now introduce a range of measures to make it easier to run a business. It aims to cut administrative and reporting requirements for companies by 25 per cent, and reduce the burden on small and medium-sized enterprises (SMEs) by 35 per cent.
Several of the measures will be presented on 26 February in the first of a series of simplification packages. The package aims to simplify the EU's sustainability reporting rules. Strict reporting requirements for large companies are now 'trickling down' the supply chain, placing disproportionately stringent requirements on smaller companies. The EU now aims to simplify these requirements.
«The EU hopes this will free up capacity for smaller companies to focus on other tasks.»
Green competitiveness and the Clean Industrial Deal
The Competitiveness Compass also includes measures to secure the EU's green transition. The drive for green growth through the European Green Deal is now being taken forward through measures that will also safeguard the competitiveness of European businesses.
CleanIndustrialDeal (CID) was presented on 26 February as a roadmap for competitiveness and decarbonisation.
Two sectors in particular will be affected: energy-intensive industries and environmental technology, or 'cleantech', as the EU calls it.
To make Europe an attractive place to invest and decarbonise, the plan must give European industry '(…) a stronger business case for large-scale, climate-neutral investments in energy-intensive industries and cleantech'.
The green transition will strengthen Europe's competitiveness by giving companies and investors greater predictability.
The plan advances measures through six so-called business drivers:
- affordable energy
- leading markets
- funding
- circularity
- access to materials, global markets and international partnerships
- expertise.
These efforts should be complemented by measures in the five horizontal areas set out in the Competitiveness Compass. (See fact box)
CID therefore works in tandem with other key initiatives. The Affordable Energy Action Plan (AEAP) was presented on the same day. It aims to accelerate the deployment of clean technologies and the electrification of industry by reducing energy prices for households, industry and businesses.
The EU has also announced an Industrial Decarbonisation Accelerator Act (Industrial Decarbonisation Accelerator Act) to make it easier and faster to develop renewable energy production facilities. Among other measures, the Act will introduce new carbon footprint labels and harmonise and simplify existing labelling schemes.
To finance the green transition, the EU will also propose establishing an Industrial Decarbonisation Bank under the EU Innovation Fund. This will unlock €100 billion in funding and strengthen InvestEU's capacity to take on risk. Norwegian companies can access funding from the Innovation Fund through Enova.
The EU also plans to review its public procurement rules in 2026.
Innovation and strengthening the single market
Simplification efforts will work alongside a range of measures to strengthen innovation, remove barriers and fully realise the free movement of goods and services that underpins the EU single market.
The EU will also present a dedicated Startup and Scale-up Strategy in the second quarter of 2025. The strategy will address bottlenecks that prevent companies from starting and scaling up.
Do you have views on this? The European Commission is inviting feedback on the strategy by 17 March. Share your feedback here.
Prerequisites and the way forward
For Norwegian companies to benefit from these changes, they must also apply to the EEA. Most of the measures in the proposal cover the EU single market, so it is implicit that they must also apply throughout the EEA.
If the EEA is not included in the new changes, Norwegian companies could be put at a disadvantage. One example is export controls, which the EU wants to use more frequently. This could disadvantage Norwegian companies. The same applies to the proposal to give European companies priority in public procurement processes.
As the Competitiveness Compass covers a relatively wide range of measures, strategies and regulations, some are likely to be relevant to the EEA while others are not. The Norwegian authorities will therefore need to consider several of the initiatives as they develop.
Our EU teams in Brussels and Norway are closely monitoring developments to understand how the changes will affect Norwegian businesses.
Our advisors help you understand and navigate EU opportunities and regulations:
- Our Brussels office has advisors who can help you understand the opportunities offered by new EU regulations and programmes. Read more here
- Our Export Centre has advisers with expertise in the EU single market