EU State of the Energy Union 2025 – A unifying call for sovereignty, security, decarbonisation, and competitiveness  

In her most recent State of the Union speech, President von der Leyen declared: “This must be Europe’s Independence Moment.” The European Commission’s 2025 State of the Energy Union lands squarely in this context, offering a stocktake of progress while pointing to the challenges still ahead. 

EU’s future hinges on deploying the full range of climate and clean energy solutions to cut emissions, meet rising power demand, and strengthen competitiveness. Achieving this requires a comprehensive policy toolkit, technology-neutral approach and faster progress across all dimensions of the Energy Union. 

Powering Europe with 24/7 Clean Electricity 

Von der Leyen underlined the challenge: “We know what drove prices up: dependency on Russian fossil fuels. And we know what brings prices down: clean homegrown energy. We need to generate more homegrown renewables – with nuclear as a baseload.”  

Accelerating renewables is vital, but it will not be enough on its own. To meet growing electricity demand around the clock — from transport and heating to the exponential needs of AI, data centres, and electrifying industrial processes — Europe must complement variable renewables with clean firm power. Advanced nuclear (including SMRs), superhot rock geothermal and fusion can provide reliable, carbon-free electricity when the sun isn’t shining, and the wind isn’t blowing. 

Greater efficiency will also be critical to lower costs and improve competitiveness, but it cannot substitute for building out clean supply. True resilience will come from combining efficiency with a diverse portfolio of clean technologies, reducing dependence on imported fossil fuels, and strengthening European and global supply chains. CCS and hydrogen will be essential parts of this mix, particularly for hard-to-abate sectors, where electrification is not feasible. 

To deliver this vision at least cost and with security, Europe needs a fit-for-purpose procurement and contracting framework, backed by investment in modern, integrated grids that can handle higher shares of renewables and firm clean power. 

Fixing the Grids: The Backbone of the Energy Union 

While Europe has made progress it remains far from a fully integrated internal energy market. The Letta and Draghi reports underline the costs of fragmentation, from higher prices to lost competitiveness.  

At the core of market integration sits Europe’s electricity grid, which is struggling to keep pace with the scale and urgency of the transition. Investment remains insufficient not only in clean generation and interconnections, but also in flexible and firm capacity needed to balance weather-dependent renewables and ensure security of supply. At the same time, the grid itself is not adequately prepared for the increasing physical risks of climate change, threatening infrastructure resilience.  

These challenges are magnified by institutional and procedural bottlenecks. Lengthy and complex permitting procedures delay project delivery; fragmented and uncoordinated grid planning at national and EU level hinder efficient grid development. Today’s announcement on Energy Highway identifies eight critical bottlenecks in the EU´s energy infrastructure- from the Øresund Strait to the Sicilian Canal – which is a welcomed step. If done right, the upcoming Grids Package, the Electrification Action Plan, and the announced Single Market Roadmap could put an end to these pressing challenges and deliver a more integrated and coordinated electricity market.  

Decarbonising Industry: CCS, Hydrogen, and Lead Markets 

Heavy industry — steel, cement, chemicals — sits at the heart of Europe’s competitiveness, and at the core of its decarbonisation challenge. 

Von der Leyen announced: “This is why we will introduce a ‘Made in Europe’ criteria in public procurement.” By creating lead markets for near-zero products, Europe can safeguard its competitiveness while accelerating decarbonisation. 

In addition to electrification wherever possible, the solutions are clear: 

• Carbon capture and storage (CCS) to address unavoidable CO₂ emissions. 

• No-regrets hydrogen for targeted applications such as steelmaking, ammonia, and refining. 

• CO₂ transport and storage networks as critical infrastructure. 

The upcoming proposal of the Industrial Accelerator Act (formerly Industrial Decarbonisation Accelerator Act) and Procurement Directives review, with the introduction of “Made in Europe” criteria, should drive demand for decarbonised products with clear and ambitious labelling, pioneering compliance markets for the private sector, and demand-side mandates for the purchase of decarbonised materials in selected end-use sectors . 

Research, Innovation, and Competitiveness 

Von der Leyen announced a “Choose Europe package of EUR 500 million to attract and retain the best scientists and researchers.” 

This is welcome, but Europe must go further. The EU continues to fail at translating innovation into commercialisation, and its research and innovation policy remains too disconnected from industrial and decarbonisation policy. 

More attention must be given to key technologies to ensure they move forward rapidly from demonstration to market. The upcoming EU SMR communication, Fusion Strategy and Geothermal strategy will be important opportunities to change this. 

Climate Action: A Missed Opportunity 

Despite briefly noting that the EU remains on track to meet its 2030 targets, von der Leyen gave limited attention to climate action itself, instead emphasising new “omnibus” simplification packages. This was a missed opportunity to reconcile Members of European Parliament and Member States around the urgent need to align decarbonisation, competitiveness, and energy security. Competitiveness and decarbonisation need to strengthen each other to deliver a real clean industrial deal.  

Europe’s Independence Depends on Action 

Von der Leyen concluded: “Ultimately, it is about having the freedom and the power to determine our own destiny.” 

That independence will be built through infrastructure, innovation, and political will. 

For CATF, the priorities are clear: 

• Scale 24/7 clean electricity with renewables and clean firm power together. 

• Coordinated infrastructure buildout, including for CO₂ transport and storage networks. 

• Improve market design issues to reliably decarbonise Europe through enhanced planning, procurement and contracting. 

• Prioritise hydrogen for no-regrets uses 

• Create lead markets for clean industrial products, with clear labelling and compliance markets. 

• Strengthen the nuclear energy value chain. 

• Align research, innovation, and deployment, with fusion and geothermal strategies as priorities. 

• Combine efficiency with deep technology deployment. 

From implementing climate targets to industrial decarbonisation, Europe must move faster, invest smarter, and lead globally in the transition ahead.