(Science|Business) Cutting Green Deal red tape will not help innovation, experts say

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The European Green Deal has exposed a misalignment between policy ambitions and the deployment of innovative technologies, but experts warn that plans by the European Commission to fix that by cutting red tape risks undermining the regulatory stability that researchers and innovators actually need.

Established in 2019, the Green Deal was intended to be a transformative blueprint for a carbon-free Europe. The ambitious policy agenda was backed by a flurry of funding schemes and grants aimed at boosting climate research and deploying green technologies at scale. Over 35% of Horizon Europe spending was allocated to address climate change, while a roster of partnerships, which are large-scale collaborations between research and industry, were focused on climate and energy, the bioeconomy, food and natural resources. 

But the Green Deal has faced a significant backlash due to concerns over regulatory overreach and lags in practical, on-the-ground delivery.

“Regulation advanced quickly, while industrial scaling instruments, infrastructure deployment, permitting reform and large-scale risk-sharing mechanisms evolved more gradually,” said Camino Correia, director of European programmes at consulting firm Zabala Innovation. “That created the perception of an implementation gap.”

According to Apostolos Thomadakis, head of research at the European Capital Markets Institute, the Green Deal had a sequencing problem. “Rules moved faster than delivery capacity,” he said. 

And for Phuc-Vinh Nguyen, head of the Energy Centre at the Jacques Delors Institute, the issue was that the previous Commission had somehow neglected the industrial aspect of climate policies. The Green Deal “split climate policies from competitiveness issues, leading to a catch-up situation today.”

Now, however, the political centre of gravity is shifting to competitiveness, and the Commission aims to drive economic growth while still delivering on its climate ambitions. With the expected launch of a new European Competitiveness Fund, it is doubling down on support for deploying new technologies at scale. It also plans to streamline and revamp climate regulations.

But errors in the past do not mean that the Green Deal needs a full makeover. 

Simon Hunkin, policy and proposals coordinator at sustainability innovation network Greenovate! Europe, says that the debate is not so much about “fixing” the Green Deal, but “updating and completing” it in order to take into account the increasingly tense geopolitical context and growing economic pressures.

“Regulation, stability and predictability are cornerstones of successful industrial and research strategies,” he said. The architecture of the Green Deal “creates long-term stability that innovators, researchers and investors rely on when committing to multi-year programmes,” he added.

Lukas Kahlen, expert in climate change and sustainable development the non-profit NewClimate Institute, said that the Green Deal’s “strong regulatory framework” incentivised investors to route more money towards clean technologies and “positioned the EU in a low-carbon global economy.”

Aligning research policy with funding

The Commission has already started introducing more flexibility into meeting its climate targets and promoting more concrete, targeted initiatives. This includes the Industrial Accelerator Act, which supports clean industrial production, and the Clean Industrial Deal, a game plan for turning decarbonisation into a driver for economic growth. 

Framed as the follow-up of the Green Deal, the Clean Industrial Deal is backed by a €600-million call under Horizon Europe. 

For Correia, the Clean Industrial Deal, the European Competitiveness Fund and the Industrial Accelerator Act represent the operational phase of the same transition towards a greener economy. “For researchers, this means a stronger emphasis on scalability, industrial partnerships and measurable contribution to decarbonisation pathways,” she said. 

“What is required is stronger continuity between research, demonstration and large-scale deployment, clearer technology readiness level progression, faster access to funding and tighter connection with industrial policy,” she added. 

However, if the political shift ultimately concentrates opportunities on close-to-market projects, some fear that researchers working on projects without an immediate economic impact could see their funding dwindle. 

According to Hunkin, this type of funding should be preserved. “Research activities that aim to improve the environment and protect climate and biodiversity are not necessarily going to result in big industrial breakthroughs but can increase competitiveness by reducing the costs of externalities, enabling sustainable resource use and creating new jobs,” he said.

Correia agrees that the Commission should not lose sight of the full innovation journey. “A stable and predictable innovation framework across programming cycles is equally necessary,” she said. “Excellence remains central, but alignment with key industrial ecosystems is influencing the funding priorities.” 

Thomadakis meanwhile would like to see hard regulatory guardrails remain. “But make implementation more risk-based and proportionate, while investing in the enabling conditions,” he said. “That is how you reconcile climate ambition with innovation and industrial capacity, without turning the Green Deal into a paper exercise.”