EU Competition Policy’s Alignment with Sustainable Development Goals

Introduction

The European Commission (the Commission) is increasingly aligning its competition law enforcement with overarching sustainability objectives, particularly the United Nations’ Sustainable Development Goals (SDGs). In July 2025, the Commission issued guidance clarifying the role of competition law in achieving these goals. This report outlines how EU competition policy, through State aid, horizontal agreements, and merger control, is being adapted to support the transition to a net-zero economy, thereby contributing to SDG 13 (Climate Action), SDG 7 (Affordable and Clean Energy), and SDG 9 (Industry, Innovation, and Infrastructure).

State Aid Frameworks Supporting Climate Action and Clean Energy (SDG 7, SDG 13)

The Clean Industrial Deal State Aid Framework (CISAF)

The Clean Industrial Deal State Aid Framework (CISAF), effective from June 2025 until the end of 2030, is a central component of the Clean Industrial Deal (CID). It is designed to enable Member States to support the EU’s climate objectives as codified in the EU Climate Law, which are directly aligned with SDG 13 (Climate Action). The framework facilitates investment in key sectors to accelerate the green transition.

The CISAF applies to five key areas crucial for sustainable industrialisation (SDG 9):

• Renewable energy development
• Temporary electricity price relief
• Industrial decarbonisation
• Clean technology manufacturing
• De-risking mechanisms and incentives for investments in clean technologies and critical raw materials

The framework simplifies approval processes for aid schemes that meet its conditions. It also incorporates the “do no significant harm” principle from the EU Taxonomy Regulation, ensuring that supported activities do not undermine other environmental objectives, reflecting a holistic approach to the SDGs, including SDG 6 (Clean Water and Sanitation), SDG 12 (Responsible Consumption and Production), SDG 14 (Life Below Water), and SDG 15 (Life on Land).

CEEAG and Enforcement Examples

For measures not covered by the CISAF, Member States can use the Guidelines on State aid for climate, environmental protection, and energy (CEEAG). Recent enforcement actions demonstrate the Commission’s commitment to these frameworks:

1. France: An €11 billion aid scheme to support offshore wind energy was approved under CISAF, directly advancing SDG 7 (Affordable and Clean Energy).
2. Denmark: A €36 million measure to encourage the use of sustainable aviation fuel was approved under CEEAG, contributing to the reduction of greenhouse gas emissions in line with SDG 13 (Climate Action).

Fostering Partnerships for Sustainability through Horizontal Agreements (SDG 17)

Revised Horizontal Guidelines for Sustainability Agreements

In June 2023, the Commission published revised Horizontal Guidelines that provide specific rules for sustainability agreements between competitors. These guidelines facilitate collaborations that pursue sustainability objectives, embodying the principles of SDG 17 (Partnerships for the Goals). The guidelines acknowledge that certain agreements fall outside the scope of competition restrictions, including those that:

• Aim for compliance with legally binding requirements.
• Concern internal corporate conduct rather than economic activity.
• Create databases on sustainable value chains.
• Organise industry-wide sustainability awareness campaigns.

Sustainability Standardisation and Exemption Criteria

The guidelines establish a “soft safe harbour” for sustainability standardisation agreements, presuming they are compliant if six cumulative conditions are met. The sixth condition requires that the standard either does not lead to a significant price increase or that the combined market share of participants does not exceed 20%. For agreements requiring an exemption, the Commission will assess benefits passed on to consumers, including individual use-value, individual non-use value, and collective benefits. This recognition of collective benefits for society aligns with the broad, indivisible nature of the SDGs.

Informal Guidance Promoting Collaborative Action

The Commission encourages companies to seek informal guidance on novel sustainability initiatives. In July 2025, it issued its first guidance letters, providing legal certainty for projects contributing to the SDGs:

• Automotive Sector: Guidance on a licensing negotiation group for technologies essential for the EU’s net-zero emissions objectives.
• Port Operators: Guidance on a joint purchasing agreement for electric container-handling equipment to reduce CO2 emissions, supporting SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action).
• French Wine Sector: An opinion approving an agreement to set indicative prices for organic wines, promoting sustainable agriculture in line with SDG 12 (Responsible Consumption and Production).

Integrating Sustainability into Merger Control for Green Innovation (SDG 9)

The Role of Sustainability in Merger Reviews

Sustainability considerations are increasingly integrated into the Commission’s merger reviews. While the Commission cannot block mergers on purely environmental grounds, it recognises that competitive markets can foster sustainable outcomes. Key issues identified for enhancing merger enforcement’s contribution to sustainability goals include:

• Accounting for consumer preferences for “green” products in market definition.
• Preventing the loss of “green” innovation through mergers.
• Accepting social and environmental benefits as efficiencies.
• Scrutinising “green” killer acquisitions where small innovators are acquired by incumbents.

Merger Guidelines Consultation

The Commission is reviewing its merger guidelines to better factor in policy objectives such as sustainability, innovation, and resilience. The consultation addresses how sustainability can be a parameter of competition. In horizontal mergers, this includes assessing whether merging firms are close competitors in developing more sustainable products or “green” technologies. The concept of “green efficiencies”—sustainability benefits that could offset a merger’s negative effects on competition—is also being explored as a way to support innovation that contributes to SDG 9 and SDG 13.

Sector-Specific Frameworks for Clean Technology and Sustainable Industrialisation (SDG 7, SDG 9)

The Net Zero Industry Act (NZIA)

The Net Zero Industry Act (NZIA), which entered into force in June 2024, aims to ensure that at least 40% of the EU’s annual deployment needs for clean technologies are met by domestic manufacturing by 2030. This directly supports SDG 7 and SDG 9 by strengthening the EU’s capacity in solar, wind, batteries, and hydrogen. The NZIA also sets a binding target for CO2 storage capacity, mandating oil and gas producers to contribute to industrial decarbonisation efforts crucial for SDG 13.

Complementary Clean Technology Initiatives

Other EU frameworks are being implemented to accelerate the green transition and secure sustainable supply chains:

• Critical Raw Materials Act: Ensures a sustainable supply of materials essential for clean tech manufacturing, supporting SDG 12.
• REPowerEU Plan: Aims to accelerate the clean energy transition and reduce fossil fuel dependence, advancing SDG 7.
• Industrial Accelerator Act: A forthcoming legislative package intended to streamline administrative procedures for strategic sectors, including clean tech, to fast-track decarbonisation.

Outlook: Competition Law as a Tool for Achieving the 2030 Agenda

EU competition law is evolving from a tool focused solely on consumer welfare to one that actively supports the Commission’s broader policy objectives, including the Sustainable Development Goals. While not a direct enforcement mechanism for sustainability, competition policy is being shaped to remove barriers and create incentives for a sustainable transition.

The facilitation of State aid, clarification on cooperation agreements, and potential reforms to merger control create significant opportunities for businesses to advance projects that contribute to a net-zero economy. The Commission’s actions indicate that competition law will be a key instrument in ensuring that “green drivers” become “market drivers,” aligning market forces with the global 2030 Agenda for Sustainable Development.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article extensively discusses the development and deployment of clean energy technologies, including renewables like offshore wind, and the EU’s support for these sectors through frameworks like the Clean Industrial Deal State Aid Framework (CISAF) and the REPower EU Plan. The goal is to advance the development of clean energy and ensure it is affordable.

• SDG 9: Industry, Innovation, and Infrastructure

  The article focuses on industrial decarbonisation, strengthening the EU’s manufacturing capacity for clean technologies (e.g., solar panels, wind turbines, batteries), and fostering innovation. The Net Zero Industry Act (NZIA) is a key policy mentioned, aiming to build resilient infrastructure and promote inclusive and sustainable industrialization.

• SDG 12: Responsible Consumption and Production

  The concept of a “circular economy” is mentioned as a policy goal within the Clean Industrial Deal (CID). The article also refers to consumer preferences for “recycled products” and the creation of databases for suppliers with “sustainable value chains,” which are central to achieving sustainable consumption and production patterns.

• SDG 13: Climate Action

  This is a central theme. The article is framed around the EU’s efforts to achieve its climate objectives, such as “cutting emissions by at least 50% by 2030” and “reaching climate neutrality by 2050.” Policies discussed, including carbon capture and storage (CCS) targets and support for decarbonisation, directly address the need to combat climate change and its impacts.

• SDG 17: Partnerships for the Goals

  The article details how the EU is modifying its competition laws and providing guidance to encourage partnerships and cooperation among companies (“sustainability agreements concluded between competitors”) to achieve sustainability objectives. This involves public-private collaboration, as Member States are encouraged to provide State aid to support green projects, fostering partnerships to achieve the goals.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7: Affordable and Clean Energy
  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article highlights the CISAF’s support for “renewable energy development” and the approval of an €11 billion scheme in France for “offshore wind energy” as direct actions toward this target.
  • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The EU’s entire legal framework discussed (CISAF, NZIA) is designed to “unlock investment” and support the development and deployment of “clean technologies such as renewables, batteries, hydrogen, and carbon capture.”
• SDG 9: Industry, Innovation, and Infrastructure
  • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable… with all countries taking action. The article discusses “industrial decarbonisation” and the NZIA’s objective to strengthen “manufacturing capacity for clean technologies” as key components of retrofitting EU industries for a net-zero future.
  • Target 9.b: Support domestic technology development, research and innovation in developing countries… The article focuses on the EU context but describes policies like the NZIA that aim to ensure “at least 40% of the EU’s annual deployment needs for these technologies are met by domestic production by 2030,” fostering domestic innovation in “green technologies.”
• SDG 12: Responsible Consumption and Production
  • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. The mention of policies supporting the “circular economy” and the Critical Raw Materials Act, which aims for a “sustainable supply of critical raw materials,” directly relates to this target.
  • Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse. The article notes that sustainability considerations in merger reviews can include “customers’ preferences for recycled products,” indicating a market-driven approach to this target.
• SDG 13: Climate Action
  • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The entire article is an analysis of how the EU is integrating its climate objectives (“cutting emissions by at least 50% by 2030,” “climate neutrality by 2050”) into its core economic policies, specifically competition law, State aid rules, and industrial strategy.
• SDG 17: Partnerships for the Goals
  • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships. The article’s discussion of the revised Horizontal Guidelines, which provide rules for “sustainability agreements concluded between competitors,” and the Commission’s willingness to provide “informal guidance” for such collaborations, is a direct example of promoting partnerships to achieve sustainability goals.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions several specific, quantifiable indicators that can be used to measure progress:

• Indicator for SDG 13 (Climate Action): The EU’s climate objectives are stated as concrete, measurable targets: “cutting emissions by at least 50% by 2030” and “reaching climate neutrality by 2050.” Progress can be measured against these overarching goals.
• Indicator for SDG 13 (Climate Action) / SDG 9 (Industry, Innovation, and Infrastructure): The Net Zero Industry Act (NZIA) establishes a binding EU-wide target for CO2 storage: “By 2030, at least 50 million tonnes of annual CO₂ injection capacity must be achieved.” This is a specific, measurable indicator of progress in carbon capture and storage infrastructure.
• Indicator for SDG 9 (Industry, Innovation, and Infrastructure): The NZIA also sets a manufacturing capacity target: “at least 40% of the EU’s annual deployment needs for [clean] technologies are met by domestic production by 2030.” This provides a clear metric for tracking the growth of the EU’s domestic clean tech industry.
• Indicator for SDG 7 (Affordable and Clean Energy): Financial flows are used as an indicator of support for clean energy. The article cites specific aid schemes approved by the Commission, such as “France’s €11 billion aid scheme to support offshore wind energy” and a “Danish measure of €36 million aimed at reducing greenhouse gas emissions in the domestic aviation sector.” These amounts serve as indicators of public investment directed towards clean energy.

4. Table of SDGs, Targets, and Indicators

Source: lw.com