EU Competitiveness Compass: Key Priorities & Business Impact

EU Competitiveness Compass: Key Priorities & Business Impact

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5 February 2025

The EU Competitiveness Compass: Simplifying REACH 2.0 Compliance

The European Commission has unveiled the Competitiveness Compass, a strategic framework aimed at reinforcing the European Union’s economic resilience, industrial leadership, and technological innovation. This initiative identifies critical policy priorities to address productivity challenges, regulatory bottlenecks, and global competitiveness, ensuring that the EU remains a key player in the international market.

Importantly, the Competitiveness Compass will also play a key role in facilitating the implementation of the upcoming REACH 2.0 framework, simplifying compliance processes for the chemical industry and enhancing regulatory efficiency across the EU.

Key Priorities of the Competitiveness Compass

Boosting Productivity and Innovation

Over the past two decades, the EU has struggled with slower productivity growth compared to other global economies. To bridge this gap, the Competitiveness Compass focuses on:

  • Accelerating technological innovation and integrating new technologies into industrial ecosystems.
  • Enhancing the commercialization of European research to convert innovation into market-ready solutions.
  • Supporting a business-friendly environment that fosters competition and entrepreneurship.

Addressing Structural Challenges

At the same time, long-standing regulatory and economic barriers have hindered the EU’s ability to compete globally. To overcome these obstacles, the strategy highlights:

  • The need for simplified regulations to reduce bureaucratic burdens on businesses.
  • Strengthening infrastructure and investment to support industrial growth.
  • Advancing skills development and workforce adaptability to meet evolving industry demands.

Enhancing the EU’s Global Competitiveness

In addition to these measures, the EU must take decisive action to maintain its position as a leading economic power. To achieve this, the Competitiveness Compass outlines three key priorities:

  • Reinforce its industrial base in key strategic sectors.
  • Improve conditions to attract foreign and domestic investment.
  • Build a resilient and autonomous economy, reducing dependencies on external markets.

What Does It Mean for the Chemical Industry?

The Competitiveness Compass is not just a broad economic roadmap; it plays a crucial role in shaping the future of the chemical industry, especially with the upcoming REACH 2.0 revision. According to the European Commission, the long-awaited REACH revision will bring significant benefits to the EU’s chemicals industry and boost its global competitiveness.

Simplification of REACH Compliance

The revision, expected to be published by the end of this year, aims to ease the regulatory burden for companies, ensuring faster decision-making on key hazards. This will help streamline processes related to the detection and management of hazardous substances, making compliance more efficient for chemical companies.

Under the EU’s Chemicals Strategy for Sustainability (CSS) (2020), the Commission proposed initiatives like the Mixtures Assessment Factor (MAF) and the Generic Approach to Risk Management (GRA), intended to modernize REACH based on current scientific knowledge. However, with changing economic priorities, the new framework will focus on creating a more favorable environment for the industry, potentially revising or simplifying some of these measures.

Regulatory Simplification for Enhanced Competitiveness

The Competitiveness Compass introduces an “unprecedented simplification effort”, targeting faster administrative processes and proportionate regulations. The appointment of the first-ever Commissioner for Implementation and Simplification reflects the EU’s commitment to reducing bureaucratic obstacles, benefiting the chemicals sector directly.

Key upcoming initiatives include:

  • Clean Industrial Deal (Q1 2025)
  • Chemicals Industry Package (Q4 2025)
  • Circular Economy Act (Q4 2026)
  • Advanced Materials Act (2026)

These initiatives are designed to support regulatory efficiency, enhance sustainability practices, and promote innovation in the chemical sector.

Implications for Businesses in the EU

As these policies take shape, businesses will need to proactively adapt. To stay competitive, companies should:

  • Monitor regulatory changes that impact industry compliance and operations.
  • Leverage EU funding and initiatives to drive digital transformation and sustainability.
  • Engage with policymakers and industry groups to contribute to competitiveness reforms.

How Can We Help?

At Lisam, we closely monitor the regulatory changes expected with REACH 2.0 to ensure we can support companies in maintaining compliance with evolving EU regulations.

Contact us today to share your challenges and discover how our software can help you meet your regulatory needs.

Request a Demo

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