EU’s Energy Cost Challenge: High Prices Until 2050

The European Union is projected to face the highest energy prices globally until at least 2050, according to a recent study by BusinessEurope. This scenario arises from increased energy demand and inherent disadvantages within the EU’s energy framework. Even under the most optimistic net-zero scenario, the EU’s energy production costs are expected to be at least 50% higher than those in the US and China. In a scenario where climate policies encounter delays, costs could triple compared to key competitors, placing European industries at a severe competitive disadvantage.

The root causes of this cost disparity include the EU’s reliance on energy imports and geopolitical disruptions, notably the reduced gas supplies following Russia’s invasion of Ukraine. Such dynamics have exacerbated the cost challenges, prompting concerns over Europe’s ability to sustain its industrial base against global competitors like the US and China, who may capitalise on their lower energy costs to boost traditional and clean tech sectors, such as steel and wind energy.

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Markus Beyrer, Director General of BusinessEurope, has called for urgent action at the EU level to address these energy cost issues. He highlighted the need for competitive energy prices to maintain Europe’s industrial competitiveness. Key recommendations from BusinessEurope include revisiting the phase-out of free carbon emission allowances for manufacturers, better integration of renewable and low-carbon energy sources, ensuring the hydrogen value chain, streamlining licensing procedures, and promoting decarbonisation through incentives.

The high energy costs remain a top concern for major European industrial leaders. Policymakers have recognised the importance of competitiveness in renewable energy as a cornerstone for the next European Commission. However, businesses continue to struggle with bureaucratic hurdles that hinder swift progress in energy transition.

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EU Moderates Emissions While Sustaining Economic Momentum

by THEFUTURE.TEAM

November 15, 2025

The European Union witnessed a modest decline in greenhouse gas emissions in the second quarter of 2025, as reported by Eurostat. Emissions across the EU registered at 772 million tonnes of CO₂-equivalents, marking a 0.4 percent reduction from 775 million tonnes in the same period of 2024. Concurrently, the EU’s gross domestic product rose by 1.3 percent, reinforcing the ongoing decoupling between economic growth and environmental impact.

Sector-By-Sector Performance

Within the broader statistics on emissions by economic activity, the energy sector—specifically electricity, gas, steam, and air conditioning supply—experienced the most significant drop, declining by 2.9 percent. In comparison, the manufacturing sector and transportation and storage both achieved a 0.4 percent reduction. However, household emissions bucked the trend, increasing by 1.0 percent over the same period.

National Highlights And Notable Exceptions

Among EU member states, 12 reported a reduction in emissions, while 14 saw increases, and Estonia’s figures remained static. Notably, Slovenia, the Netherlands, and Finland recorded the most pronounced declines at 8.6 percent, 5.9 percent, and 4.2 percent respectively. Of the 12 countries reducing emissions, three—Finland, Germany, and Luxembourg—also experienced a contraction in GDP growth.

Dual Achievement: Environmental And Economic Goals

In an encouraging development, nine member states, including Cyprus, managed to lower their emissions while maintaining economic expansion. This dual achievement—reducing environmental impact while fostering economic activity—is a trend that has increasingly influenced EU climate policies. Other nations that successfully balanced these outcomes include Austria, Denmark, France, Italy, the Netherlands, Romania, Slovenia, and Sweden.

Conclusion

As the EU continues to navigate its climate commitments, these quarterly insights underscore a gradual yet significant shift toward balancing emissions reductions with robust economic growth. The evolving landscape highlights the critical need for sustainable strategies that not only mitigate environmental risks but also invigorate economic resilience.

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