The European Environment Agency identifies six no-regret options to strengthen Europe’s long-term sustainable competitiveness through 2040, framing competitiveness beyond traditional economic metrics.

These six options address climate risks, resource dependencies, and resilient governance, and are presented as applicable to Europe’s future stability.

1) scale up circular economy and resource efficiency; 2) invest in climate adaptation, nature-based solutions and resilient infrastructure; 3) develop European capabilities in computing, AI and next-generation biotechnology; 4) invest in skills, education and lifelong learning; 5) support social cohesion, public trust and effective regulatory frameworks; 6) maintain an active EU role in international environmental and social sustainability standard-setting and multilateral institutions.

Fourth direction: invest in skills, education, and lifelong learning to enable effective adoption of new technologies and infrastructures.

Second direction: combine climate adaptation, nature-based solutions, and resilient infrastructure to protect productive capacity and reduce losses from future shocks.

The report emphasizes that the directions are not a single forecast or binding obligations, and policies may have trade-offs requiring joint assessment to avoid shifting risks elsewhere.

Fifth direction: enhance social cohesion, public trust, and effective regulatory frameworks to improve policy implementation and investment support.

Europe faces geopolitical fragmentation, technological disruption, climate risks, and dependence on global supply chains for critical materials, requiring anticipatory policymaking and coordinated implementation at scale.

Key messages emphasize that past competitive advantages may not hold, and that sustainability can be a foundational driver of resilience, innovation, and employment if integrated into the economic model.

5. Using resources more efficiently: Increase circularity, repair and reuse to reduce primary material demand and energy exposure to markets, while managing trade-offs like keeping old assets that may be inefficient or vulnerable to climate impacts.

First direction: expand circular economy and improve resource efficiency to keep materials in use and reduce exposure to raw-material price fluctuations and supply chain disruptions.

While Europe already has policy foundations supporting these directions, the challenge is translating ambition into coordinated actions at the needed pace and scale, with sustained investment and adaptable institutions.