On 14 February, the European Commission published its Annual Single Market and Competitiveness Report. It details the strengths and challenges of the EU’s Single Market through 19 key performance indicators (KPIs), spanning nine categories, including research and innovation (R&I) and energy. The document, stemming from the 2020 EU Industrial Strategy, aims to inform future discussions between legislators on promoting the Single Market and competitiveness agenda.

Overall, this 2024 edition highlights the successes of the Single Market, one of the world’s largest integrated market areas, providing high-quality opportunities for innovation. It also addresses potential pathways for improvement to boost the impact of R&I and accomplish the clean energy transition. The report identifies several areas of progress made in the past year. Private investments, crucial for the EU’s competitiveness and the green transition, have increased. Recognising the overall importance of R&I, it cites highly qualified engineers, research excellence, quality infrastructure, and a competitive edge in clean technology development as drivers of the Single Market. The paper further identifies the EU as a global leader, with one-fifth of the top 10% of most cited scientific publications produced in Europe.

On energy, the report underlines achievements in regulatory burden reduction and simplification. The EU has managed to reduce process-related barriers, especially for wind and solar projects. The publication also highlights newly negotiated Strategic Raw Materials Partnerships and an increased share of energy from renewable sources, alongside reduced greenhouse gas emissions compared to 1990 levels and progress in circularity across the bloc. However, the Commission acknowledges remaining hindrances to competitiveness, threatening the energy transition and the R&I ecosystem. These include high energy prices, insufficient public investments in R&I and clean technologies, a lack of synergies between research and industry, workforce reskilling, and strategic dependencies on third countries.

The document highlights the importance of new legislation such as the Net-Zero Industry Act (NZIA), the Chips Act, the Critical Raw Materials Act (CRMA), the revised Renewable Energy Directive, and the EU electricity market design reform. It advocates for massive electrification of the grid, accelerated grid deployment, and investments in interconnected and integrated energy markets. Recognising the role played by several initiatives, including the New European Innovation Agenda (NEIA), Important Projects of Common European Interest (IPCEIs), the Innovation Fund, and the future Strategic Technologies for Europe Platform (STEP), as well as infrastructure like the European Innovation Council (EIC), the Commission calls for their full utilisation to reach the agreed-upon 3% of GDP target for R&I investments and compete with key international players like the US and China.

The document concludes that more strategic and targeted instruments and investments are needed to achieve the energy transition. It suggests placing a stronger focus on strategic technologies, like critical raw materials substitutions and reuse, and reinforcing synergies and links between research and industry to scale up innovations and bring them to market efficiently.