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Why is EU considering deregulation of energy laws amid economic concerns?

by admin March 28, 2025
March 28, 2025
Why is EU considering deregulation of energy laws amid economic concerns?

The European Commission, the executive arm of the European Union, is actively exploring potential revisions to the existing EU energy laws. 

This initiative is part of a broader package of proposals aimed at reducing the regulatory burden currently faced by struggling industries within the European Union, Reuters reported on Friday. 

These potential changes are being considered in response to concerns that the current regulatory framework may be hindering the competitiveness and growth of certain industries, particularly those grappling with economic challenges. 

The Commission’s objective is to strike a balance between ensuring a well-functioning energy market and promoting a favorable business environment that supports economic recovery and sustainable development.

The European Commission is initiating efforts to streamline regulations and reduce bureaucratic hurdles for businesses. 

Concerns driving regulatory changes

This comes in response to concerns that excessive red tape puts European companies at a competitive disadvantage compared to their counterparts in China and the US, where the Trump administration has been actively pursuing deregulation.

Following the release of initial proposals to streamline sustainability reporting requirements last month, the Commission is now evaluating strategies to simplify EU energy policies, according to five sources familiar with the matter quoted in the story.

Although still in the early stages, the discussions could be included in a comprehensive package aimed at reducing the regulatory burden for small and mid-cap companies due in April.  

The report indicated that this package is now expected to be delayed until May.

Three anonymous sources have revealed that the European Union’s energy efficiency directive is currently under scrutiny as part of a broader policy assessment. 

This directive, a cornerstone of the EU’s energy policy, sets ambitious targets for member states to improve their energy efficiency. 

The ongoing assessment suggests that the directive’s effectiveness and potential for further improvement are being closely examined.

Consumption targets

The directive mandates that companies audit their energy use and that larger firms implement energy management plans to meet binding energy consumption targets.

The renewable energy law, which sets binding targets for countries to expand their use of renewable energy, is one of the bloc’s main climate change policies. 

According to the report, the Commission is looking at potentially simplifying this law and is also looking at other climate change policies.

The impetus to reduce bureaucratic obstacles has garnered substantial support from the business sector, which contends that excessive regulations not only impede competitiveness but also strain valuable resources. 

This unnecessary burden forces companies to divert funds that could otherwise be allocated towards fostering innovation and technological advancements. 

By streamlining regulatory processes and eliminating redundant or outdated rules, governments can create a more conducive environment for businesses to thrive and invest in research and development, ultimately driving economic growth and prosperity.

Investors, left-leaning lawmakers, and campaigners have criticised the initial omnibus proposals. 

They argue that these proposals will weaken corporate accountability and create an unstable investment environment by reversing recently established laws.

The post Why is EU considering deregulation of energy laws amid economic concerns? appeared first on Invezz

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