Plan B for Europe A Complement Strategy for European Energy Efficiency, Industrial Resilience, and Economic Security
Plan B for Europe
Energy efficiency as a cautious & realistic path forward
All references and footnotes can be found in the full PDF report available here: https://www.globari.org/plan-b-for-europe
Jump to Plan B's key priorities and summary
Decades of ambitious but often poorly coordinated strategies have exposed the limits of mainstream approaches to achieving competitiveness, sustainability, and social cohesion. Frameworks such as the Lisbon Agenda, Europe 2020, and the European Green Deal brought bold visions, but their implementation has revealed systemic contradictions, regional disparities, and governance challenges. After acknowledging these failures, we propose "Plan B" as a realistic and pragmatic alternative, focusing on the stabilization and strengthening of Europe’s industrial and social foundations. By emphasizing energy efficiency in traditional industrial sectors, infrastructure modernization, and gradual innovation, "Plan B" offers a path to tangible progress and resilience.
At the heart of this alternative vision is energy efficiency, which focuses on energy-intensive sectors such as manufacturing, construction, transmission systems, and waste management. These industries are the largest consumers of energy in the EU, accounting for more than 50% of industrial energy use, but they also represent a sector with enormous and financially accessible potential for improvement. Industrial processes, particularly in steel and cement production, remain highly energy-intensive and are still ripe for technological modernization, which could reduce energy consumption by up to 30%. For example, the modernization of industrial furnaces with advanced heat recovery systems can achieve energy consumption reductions of up to 30%. These measures, despite being based on existing technologies, offer quick and visible results and place Europe at the forefront of sustainable industrial practices without requiring high upfront costs for greenfield innovation.
Waste management and energy distribution networks are critical for sustainability, representing a neglected potential for energy utilization through advanced recycling technologies and waste-to-energy systems. A focus on these sectors maximizes immediate impact while remaining aligned with long-term sustainability and economic objectives (European Commission, 2023). GARI has developed cost and savings scenarios for all industrial sectors, and they all present a similar picture. Additionally, in terms of funding for fundamental and applied research, traditional thermodynamic and material sciences have been chronically neglected by several orders of magnitude over the past two decades, as opposed to investments in renewable energy and decarbonization. As a result, the EU now finds itself in a situation where its past bets on global competitiveness in renewables have not delivered the expected results, while in terms of thermodynamic efficiency, we have not even attempted to expand the upper limits of possibilities through research (see following graph).
Graph coming soon...
The impact of investments in efficiency could be unprecedented. Energy savings could reduce the EU’s total energy consumption by 5–7.5% annually, equivalent to 150–210 million MWh—a deciding numberfor reducing dependence on imported energy sources. This is particularly urgent given ongoing geopolitical challenges and unstable energy markets. Furthermore, implementing these measures could create 250,000 to 350,000 jobs annually in industries such as construction, engineering, and technology deployment. This approach promises a natural solution to interregional and broader social disparities, providing job opportunities in both urban centers and economically struggling regions.
The economic impact goes beyond energy savings. Investments in energy efficiency have an estimated fiscal multiplier of 1.3, meaning that every euro spent generates €1.30 in economic activity. An annual budget of €50–70 billion could increase the EU’s GDP by €65–91 billion per year, directly supporting industrial competitiveness and economic stability. This stands in stark contrast to speculative strategies that require unprecedented loans to finance new technologies, where the EU is unlikely to achieve global competitiveness in the medium term anyway.
Investments in energy efficiency would not only bring immediate benefits but also strengthen the EU’s technological autonomy by reducing reliance on external suppliers and reinforcing its industrial base. Most of the necessary technologies, expertise, and materials are already available within the EU. Gradual modernization efforts, such as digital twins, advanced heat exchangers, and AI-driven process optimization, rely on established European manufacturers and research outputs. However, a lack of coordination has prevented these innovations from being integrated into comprehensive industrial strategies.
Energy efficiency thus serves as a cost-effective bridge to the goals of sustainability and resilience. Unlike the uncertain, leap-frog, and widespread rollout of green industrial technologies, which requires immense capital investments and a significant restructuring of supply chains—often with a realization horizon of more than five years (actually more than ten years in most cases)—efficiency measures utilize and enhance existing infrastructure and workforce capacities, leveraging and advancing Europe’s existing technological capacities and strengths, such as its highly innovative,precise manufacturing industry, also supporting the construction sector and related fields.
This approach reduces Europe’s dependence on fossil fuel and critical raw material (CRM) imports and enhances strategic autonomy in times of geopolitical uncertainty without creating new dependencies. It is precisely through this natural reduction of dependencies that "Plan B" addresses one of the clearest weaknesses exposed by recent crises, including the COVID-19 pandemic and the 2022 energy shock.
Infrastructure modernization forms another critical pillar of "Plan B". This is particularly urgent in regions such as Central and Eastern Europe, where outdated water distribution systems and district heating infrastructure are still in use. Decades of insufficient investment in basic public infrastructure—including water distribution, waste management, district heating systems, and transmission networks—have left many EU regions unprepared for the demands of a sustainable future. Addressing these deficiencies is not just an environmental necessity but also a socio-economic imperative.
For example, in countries such as Bulgaria and Romania, water leakage rates exceed 30%, while the EU average stands at an unsustainable 25%. Infrastructure modernization should be carried out both to integrate renewable energy sources and to improve energy efficiency, benefiting both urban and rural populations.
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Upgrading district heating networks with better insulation and smart demand prediction tools could reduce heat losses by up to 20%
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In the water management sector, replacing old pumps and modernizing wastewater treatment plants with anaerobic digesters could reduce energy consumption by 10–20% while also supporting circular economy goals.
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Reduce grid losses from 5–8% to 3–5%.In energy infrastructure, modernizing transmission and distribution networks with high-voltage direct current connections (HVDC), digital twins, and smart substations could
Ultimately, annual investments in energy efficiency amounting to €50–70 billion (compared to the €750 billion per year proposed in the Draghi Report) represent not only a practical alternative but an essential course correction. This approach balances immediate needs with long-term goals, ensuring that the EU’s decarbonization strategy remains economically viable, socially fair, and environmentally sustainable. Without this shift, the EU risks deepening its dependency and vulnerability, thereby undermining the strategic autonomy and industrial resilience that its policies are meant to secure.
The contrast between these more immediately and more affordably attainable benefits and the speculative focus of the Draghi Report is indeed stark. While the report proposes massive investments in technologies such as green hydrogen, these solutions require long-term development and an increase in external dependencies. By contrast, energy efficiency measures provide rapid and scalable benefits that strengthen Europe’s industrial base, create jobs, and enhance energy security. By focusing on advanced yet easily implementable technologies, the EU can reduce energy consumption and emissions while also fostering public support for the green transition.
"Plan B" acknowledges the diverse strengths of European industry and supports targeted investments in workforce retraining and skills development to align with the evolving demands of modernized industrial sectors. Similarly, localized research and development (R&D) centers can focus on the industrial strengths specific to a given region, fostering innovation without deepening regional inequalities. The emphasis on gradual progress prevents the social and economic pathologies that often accompany sudden, large-scale transitions, thereby laying the foundation for long-term stability.
The real impacts of "Plan B" then naturally, realistically, and attainably address all three long-term pillars of EU strategies: competitiveness, sustainability, and social cohesion, while also limiting the growth of import dependencies. Increased competitiveness stems from increased productivity and decreased operational costs in industrial sectors. By prioritizing efficiency, European businesses can remain competitive without relying on subsidies or unproven new approaches that increase dependencies on an external environment. In essence, all that is needed is a political signal that EIIs (energy-intensive industries) are not industries to be discarded (as they are implicitly categorized in the Draghi Report), thereby paving the way for restoring confidence in the future, along with encouraging investment.
A focus on energy efficiency directly contributes to emissions reduction while also conserving limited resources. Unlike transformation strategies that often require major trade-offs, such as reliance on critical raw materials (CRM) for renewable energy technologies, Plan B’s prioritization of efficiency minimizes environmental impact within the existing industrial framework.
By reducing overall energy demand, this approach also facilitates the transition to renewable energy, alleviates pressure on supply chains, and accelerates the shift to a low-carbon economy. Perhaps most importantly, "Plan B" prioritizes social cohesion in a way that previous strategies have failed to consider and does not require massive social transfers, such as the €100 billion social fund. Instead, improved infrastructure directly enhances quality of life, strengthens trust in public institutions, and counters populist narratives, which have gained strength in recent years and are likely to continue doing so.
At the same time, this plan avoids the need for new, overly ambitious regulatory and legislative frameworks, which in the past have increased unpredictability, confusion, lack of transparency, and general systemic entropy.
Finally, "Plan B" limits rather than increases the EU’s dependence on external supply chains. Geopolitical and geo-economic risks will understandably not disappear, and reliance on imported CRMs will persist. However, unlike existing strategies, "Plan B" acknowledges these risks, actively mitigates their impact, and does not build the EU’s future on the unrealistic assumption—present in the Draghi Report—that after three decades of failed attempts, the EU will suddenly develop a more unified external economic policy.
Challenges and Political Realities
Although "Plan B" offers a realistic and balanced path forward, it is not without challenges. One of the key issues is the low and long-term return on investment, combined with an uncertain future for energy-intensive industries, as they lack political support within the EU. This makes them unattractive to investors, who tend to follow the path of least resistance in pursuit of the highest and fastest returns.
In this regard, competing with digital and new green technologies is not feasible, as the investment world and market are riding the wave of existing interest in these technologies, regardless of their actual socio-economic impact (though Plan B could help disrupt this bubble).
This is why banks, insurance companies, tax incentives, and direct financial support for efficiency-oriented technologies must play a central role. However, here lies a major obstacle: deeply ingrained European resistance to heavy industry, which also affects banks' willingness to finance EII-related projects.
In the specific case of the Czech Republic, where most banks are foreign-owned subsidiaries, maneuvering space will be limited. For such an approach to function, a fundamental shift in the EU’s mentality and the philosophy of the European economic-political ecosystem is truly necessary. Achieving such political consensus among member states with differing priorities may be an unrealistic expectation, as it requires skilled diplomacy and compromise. However, it is in the vital interest of the Czech Republic—and the entire Central European region, including Germany (!)—to make every possible effort in this direction.
Reconstruction of Ukraine and the European Economy
Russia’s aggression against Ukraine represents a failure of the global order, a human and humanitarian tragedy, and an unprecedented threat to European security. For this reason, we are reluctant to view the (hopefully) post-war reconstruction of Ukraine as an "opportunity." Supporting Ukraine’s recovery and its integration into the European community*** is both a moral and strategic imperative. Nevertheless, Ukraine’s economic recovery must be seen as not only a means of better integrating the Ukrainian economy with Europe but also as a way to address some of Europe’s structural economic challenges.
At this stage, it is impossible to estimate the scope, timeframe, or cost of Ukraine’s reconstruction. However, it is already evident that European industry will have two significant opportunities: directly participating in reconstruction efforts and, in the long term, capitalizing on trade relations with a revitalized Ukrainian economy. Key sectors such as construction, energy, and manufacturing will require significant investment, creating opportunities for the EU to implement advanced technologies and sustainable practices (World Bank, 2023). Similarly, investments in digital infrastructure and transportation networks can leverage the expertise of EU industrial sectors while accelerating technological integration across the continent.
Moreover, Ukraine’s reconstruction aligns with the EU’s strategic goal of reducing reliance on external supply chains by strengthening regional economic ties. The rebuilding effort provides a platform for European industry to diversify its production base, particularly in energy-intensive and critical material sectors. For instance, Ukraine’s mining and agricultural industries could complement EU industrial sectors, thereby reducing the vulnerability of raw material supply chains (European Commission, 2023). By integrating Ukraine into the EU’s economic framework through targeted investments and public-private partnerships, the EU must simultaneously support a key ally, expand its industrial base, and address urgent challenges such as deindustrialization and supply chain resilience.
Of course, the feasibility of this plan is constrained by well-known European realities, such as the preference for national champions and specific economic interests. Investment in Ukraine’s reconstruction is also contingent upon the EU’s highly uncertain ability to ensure the long-term stability of a post-war "New Ukraine" for decades ahead—without which, revitalizing Ukraine’s economy and industry would be of little purpose. Obstacles will also arise from Europe’s limited capacity—in terms of workforce, capital, and production capabilities—as well as Ukraine’s own limited absorption capacity. However, by adopting the logic of "Plan B," Ukraine’s reconstruction takes on a more realistic shape.
The issue of Russia’s aggression against Ukraine in the context of transatlantic relations is deliberately omitted from this analysis for two reasons: the topic of energy dependencies, sanctions, and their development during Russia’s aggression is already well covered in EU materials, Czech policy, and secondary analyses and research. Therefore, this text focuses solely on the economic aspects of Ukraine’s potential reconstruction. ***
Plan B's key priorities.
GARI presents a pragmatic and cautious “Plan B for Europe”, acknowledging the EU’s structural constraints and offering a gradual, realistic pathway forward. The plan prioritizes energy efficiency in energy-intensive industries, a sector capable of delivering immediate and tangible results while addressing Europe’s fundamental vulnerabilities. It focuses on precision manufacturing and infrastructure modernization, advocating for a robust incentive plan and carefully selected regulations in energy efficiency, workforce reskilling, and investments in core and critical infrastructure. The goal of these measures is to balance external dependencies, competitiveness, environmental sustainability, and social cohesion in a way that is realistic, organic, and capable of delivering results within a sufficiently short timeframe—without succumbing to the pitfalls of overly ambitious but unattainable goals.
ENERGY EFFICIENCY FIRST
Focuses on reducing industrial energy consumption before committing to leap-frog green technologies.
Supports cost-effective, measurable improvements in energy-intensive industries (EIIs) such as steel, cement, and chemicals.
INFRASTRUCTURE MODERNISATION
Upgrades power grids, district heating, and water systems to reduce losses and improve efficiency.
Encourages localised industrial modernisation to reduce external dependencies.
ECONOMIC AND INDUSTRIAL RESILIENCE
Shifts focus from technology-first decarbonization to efficiency-driven competitiveness.
Supports domestic production capabilities instead of reinforcing dependence on foreign supply chains (e.g., Chinese solar panels and batteries).
GEOPOLITICAL CONSIDERATIONS
Suggests leveraging industrial policy to navigate transatlantic tensions.
Acknowledges that securing political consensus in the EU is difficult, but Central Europe, including Germany, has a vital interest in pursuing this approach.
A PRAGMATIC ALTERNATIVE TO EXISTING EU STRATEGY
Avoids the pitfalls of speculative, high-risk investments.
Provides a credible path to energy security, economic stability, and industrial competitiveness.
Represents a necessary course correction for Europe's long-term sustainability and autonomy.
Summary of Plan B For Europe
- A Pragmatic Approach
"Plan B: for Europe" does not represent a departure from global climate ambitions, but rather a cautious recalibration focused on economic and industrial resilience while maintaining sustainability goals. By prioritizing energy efficiency, workforce resilience, and infrastructure modernization, it offers a pragmatic and achievable alternative to current EU strategies, which often rely on overly ambitious and speculative technological transitions. Instead of committing unprecedented financial resources to high-risk green technologies, Plan B redirects investment toward efficiency improvements in existing industrial sectors, ensuring that decarbonization efforts are cost-effective, scalable, and aligned with economic competitiveness.
A key element of this strategy is reducing Europe’s dependence on external supply chains, particularly in energy-intensive industries (EIIs) and critical raw materials (CRM). Instead of reinforcing vulnerabilities by outsourcing industrial production and relying on China for renewable energy components, Plan B encourages localized industrial modernization to strengthen domestic production capabilities. This includes energy infrastructure upgrades, digital integration of industrial sectors, and regulatory reforms that support efficiency-driven innovation.
Given the geopolitical uncertainties ahead, particularly with the return of Donald Trump and the likelihood of trade conflicts, the EU will need to navigate transatlantic relations carefully. One hypothetical tactical option (though not highly realistic under the current European Commission) would be for the EU to find internal consensus on a pro-industrial approach, while presenting this shift as an alignment with Trump’s economic logic. In his transactional worldview, this would be a political win, while simultaneously allowing the EU to strengthen its industrial base.
Ultimately, Plan B represents a necessary course correction, prioritizing economic and industrial realism over speculative policies. By focusing on efficiency, resilience, and strategic autonomy, it provides a credible and achievable alternative to the EU’s current industrial and energy strategies.
All references and footnotes can be found in the full PDF report available here: https://www.globari.org/plan-b-for-europe
Jump back to beginning of Plan B for Europe
GARI presents a pragmatic and cautious “Plan B for Europe”, acknowledging the EU’s structural constraints and offering a gradual, realistic pathway forward. The plan prioritizes energy efficiency in energy-intensive industries, a sector capable of delivering immediate and tangible results while addressing Europe’s fundamental vulnerabilities. It focuses on precision manufacturing and infrastructure modernization, advocating for a robust incentive plan and carefully selected regulations in energy efficiency, workforce reskilling, and investments in core and critical infrastructure. The goal of these measures is to balance external dependencies, competitiveness, environmental sustainability, and social cohesion in a way that is realistic, organic, and capable of delivering results within a sufficiently short timeframe—without succumbing to the pitfalls of overly ambitious but unattainable goals.
Plan B's key priorities.
GARI presents a pragmatic and cautious “Plan B for Europe”, acknowledging the EU’s structural constraints and offering a gradual, realistic pathway forward. The plan prioritizes energy efficiency in energy-intensive industries, a sector capable of delivering immediate and tangible results while addressing Europe’s fundamental vulnerabilities. It focuses on precision manufacturing and infrastructure modernization, advocating for a robust incentive plan and carefully selected regulations in energy efficiency, workforce reskilling, and investments in core and critical infrastructure. The goal of these measures is to balance external dependencies, competitiveness, environmental sustainability, and social cohesion in a way that is realistic, organic, and capable of delivering results within a sufficiently short timeframe—without succumbing to the pitfalls of overly ambitious but unattainable goals.
Summary of Plan B For Europe
- A Pragmatic Approach
"Plan B: for Europe" does not represent a departure from global climate ambitions, but rather a cautious recalibration focused on economic and industrial resilience while maintaining sustainability goals. By prioritizing energy efficiency, workforce resilience, and infrastructure modernization, it offers a pragmatic and achievable alternative to current EU strategies, which often rely on overly ambitious and speculative technological transitions. Instead of committing unprecedented financial resources to high-risk green technologies, Plan B redirects investment toward efficiency improvements in existing industrial sectors, ensuring that decarbonization efforts are cost-effective, scalable, and aligned with economic competitiveness.
A key element of this strategy is reducing Europe’s dependence on external supply chains, particularly in energy-intensive industries (EIIs) and critical raw materials (CRM). Instead of reinforcing vulnerabilities by outsourcing industrial production and relying on China for renewable energy components, Plan B encourages localized industrial modernization to strengthen domestic production capabilities. This includes energy infrastructure upgrades, digital integration of industrial sectors, and regulatory reforms that support efficiency-driven innovation.
Given the geopolitical uncertainties ahead, particularly with the return of Donald Trump and the likelihood of trade conflicts, the EU will need to navigate transatlantic relations carefully. One hypothetical tactical option (though not highly realistic under the current European Commission) would be for the EU to find internal consensus on a pro-industrial approach, while presenting this shift as an alignment with Trump’s economic logic. In his transactional worldview, this would be a political win, while simultaneously allowing the EU to strengthen its industrial base.
Ultimately, Plan B represents a necessary course correction, prioritizing economic and industrial realism over speculative policies. By focusing on efficiency, resilience, and strategic autonomy, it provides a credible and achievable alternative to the EU’s current industrial and energy strategies.
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This report presents a comprehensive analysis of Europe’s industrial and energy landscape in the context of global competition, systemic dependencies, and political realities. It examines the structural weaknesses in current EU strategies—including the Draghi Report—highlighting overlooked risks, unrealistic assumptions, and the growing disconnect between political ambition and implementation capacity. Drawing on macroeconomic data, geopolitical developments, and sector-specific trends, the study identifies actionable insights across energy, infrastructure, trade, and industrial policy. The goal is to support decision-makers with grounded, data-driven perspectives and to offer a foundation for realistic, long-term solutions.