Plan B for Europe A Complement Strategy for European Energy Efficiency, Industrial Resilience, and Economic Security
GARI's Recommendations
The GARI team, in conducting this analysis, has mapped out a critical mass of recommendations originating from EU institutions, academia, think tanks, and policy circles. We have concluded that the overwhelming majority of proposed measures are highly aspirational, reflecting European ambitions, but they fall into a "cyclical deadlock of interdependent solutions", where success in one area is entirely contingent on success in another, rendering the recommendations as a whole practically unworkable.
This is not to suggest that the EU should abandon its long-term aspirations for global competitiveness, a just society, and a sustainable future. Nor do we argue that ambitions such as broad deregulation, an ambitious EU external economic policy, or the support of advanced technologies are without merit.
However, we propose that these aspirational recommendations be complemented—and, in the current context, prioritized—by short-term, incremental, and realistic objectives, which align with a "crisis management" approach and promise immediate results. These recommendations do not increase external dependencies and have positive economic, environmental, and social impacts.
Support Data-Driven Scenario Planning
Utilize data simulations and predictive models to analyze the impact of trade conflicts and geopolitical disruptions, such as tariff changes and supply chain restrictions.
ENERGY
1. Prioritize Energy Efficiency in Industrial Policy
The EU should shift its decarbonization strategy from a technology-first approach to a demand-reduction-first approach by maximizing efficiency in energy-intensive industries (EIIs) before investing in new, high-risk energy solutions.
Efficiency investments should precede large-scale decarbonization projects such as CCS and green hydrogen, as their effectiveness depends on minimizing existing energy consumption.
2. Redirect Energy Investment Toward Immediate Gains
Instead of committing €750 billion annually as proposed in the Draghi Report, an investment in the region of €70 billion per year in efficiency-driven modernization, would generate faster, more scalable returns.
These investments should focus on energy-saving upgrades in steel, cement, glass, and chemical industries, as well as fundamental energy infrastructure, including heat, water, and waste, as a precursor to leap-frogtechnologies that increase external dependencies.
3. Reduce Dependence on Imported Energy and Raw Materials
Prioritize domestic supply chain resilience by investing in recycling and resource recovery to reduce reliance on imported critical raw materials (CRM).
Shift focus from substituting fossil fuel dependency with dependency on imported renewables and batteries, particularly from China, where solar panels, batteries, and electric vehicle components dominate global markets.
4. Strengthen Energy Infrastructure Modernization
Modernizing power grids, transmission networks, and distribution systems should be a core priority, including:
Expansion of high-voltage direct current (HVDC) transmission lines to reduce grid losses from 5–8% to 3–5%.
Upgrading district heating systems through better insulation and smart demand prediction to reduce heat losses by up to 20%.
Replacing old pumps and modernizing wastewater treatment plants with anaerobic digesters to cut energy consumption by 10–20% while supporting circular economy goals.
5. Recognize Nuclear Energy as a Bridge to Sustainable Decarbonization
Advocate for nuclear energy, including fusion research, as a realistic and stable component of the EU’s low-carbon transition strategy.
Shift political and regulatory narratives to frame nuclear energy as an energy security measure, ensuring long-term European self-sufficiency rather than reliance on intermittent renewables and battery storage.
6. Reform Permitting for Energy Efficiency and Industrial Decarbonization
Accelerate permitting processes for energy-related industrial innovation, particularly for:
Modernization of energy-intensive industries (EIIs).
Raw material extraction and refining within the EU to reduce CRM dependence.
Construction of efficiency-focused infrastructure projects such as energy-efficient industrial zones, modernized heating networks, and advanced grid technology.
7. Create Incentive Structures for Energy-Saving Technologies
Establish financial incentives and regulatory frameworks to promote efficiency investments in industries before pushing high-risk decarbonization projects.
Develop energy efficiency-based contracts (similar to carbon contracts for difference) to de-risk investments in high-efficiency industrial processes.
8. Integrate Energy Efficiency into EU’s External Economic Strategy
Tie energy infrastructure investments to broader trade agreements, ensuring EU-funded energy projects contribute to domestic industrial security rather than reinforcing foreign dependencies.
Focus EU-supported Ukraine reconstruction on modern, energy-efficient infrastructure, creating regional supply chain integration for energy-intensive sectors such as steel and cement.
9. Address the Structural Weakness of the EU’s Industrial Energy Policy
The Draghi Report and existing EU industrial strategies have largely ignored energy efficiency in favor of technology-based decarbonization, which fails to reduce overall industrial energy demand.
"Plan B" proposes a fundamental shift, prioritizing process optimization, waste reduction, and industrial-scale energy recovery before investing in speculative green energy projects.
10. Strengthen Public-Private Partnerships (PPP) in Energy Efficiency
The EU should mobilize private-sector capital for energy efficiency investments, ensuring:
Banks and insurance companies provide financial mechanisms to support low-risk efficiency projects.
Governments facilitate PPPs in industrial modernization and smart energy grids.
Efficiency-focused tax incentives make energy-efficient industrial upgrades financially attractive.
11. Shift Energy Research Funding Toward Thermodynamic and Materials Science
Redirect EU research funding from an overwhelming focus on renewables toward efficiency-focused thermodynamic research, which has been underfunded for decades.
Prioritize advanced materials for energy efficiency, particularly in heat recovery, industrial process optimization, and waste-to-energy technologies.
ECONOMIC Context with a Short- to Medium-Term Implementation Horizon and Immediate Impact
Establish incentives to support energy efficiency in energy-intensive industries, emphasizing immediate and measurable reductions in energy consumption.
Promote investment in industrial infrastructure modernization through financial incentives, such as low-interest loans for upgrading energy-efficient technologies.
Integrate European industry and other economic sectors vertically and horizontally through data and cloud technologies.
Find a balanced approach between supporting domestic cloud industries and ensuring access to necessary technologies (Draghi Report).
Accelerate permitting processes for innovation in energy-intensive industries, including the mining sector.
Ensure transparency by engaging industrial associations in shaping future EU strategies, ensuring they reflect real market conditions.
Invest in infrastructure modernization, prioritizing loss-prone sectors such as water distribution, waste management, and district heating systems, particularly in underdeveloped regions.
Support localized R&D initiatives that leverage regional industrial strengths while addressing innovation gaps between EU member states.
Create new regional innovation funds to reduce disparities and support equitable development.
Improve cross-border transport and energy infrastructure.
Invest in railway and road infrastructure between EU member states and establish smart logistics hubs.
Expand workforce retraining programs to align with the evolving needs of transitioning industrial sectors.
Advocate for nuclear energy, including fusion research, as a bridge to sustainable low-carbon solutions.
Develop public-private partnerships (PPP) to accelerate infrastructure modernization, combining private-sector expertise and capital with public oversight and responsibility.
INTERNATIONAL Context with a Medium- to Long-Term Implementation Horizon and Return on Investment
Advance the EU-Mercosur agreement, accelerate its implementation, and reject current recommendations that prioritize German interests in pharmaceuticals and environmental technologies.
Support Ukraine’s reconstruction and integration into European structures while preparing the EU for long-term geopolitical conflicts.
Create trade missions and simplify logistics to facilitate supply chain diversification.
Increase funding for fundamental research in physics, chemistry, pharmaceuticals, and material sciences, alongside high-risk, high-reward research projects (e.g., CERN) with breakthrough potential.
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.
TRANSATLANTIC Context
Develop a rapid response mechanism for trade conflicts.
Monitor U.S. policy developments and ensure quick and coordinated EU reactions.
Strengthen the EU’s ability to track and respond to political and trade policy changes in the U.S..
Create frameworks for fast, coordinated action among EU institutions and member states.
Enhance ties with U.S. states, the private sector, and business representatives with key economic interests.
Establish trade and investment offices in key U.S. states, such as California, Texas, and Illinois, to support business relations and bypass federal protectionist policies.
Organize dialogues between U.S. state officials, business leaders, and EU representatives to build alternative channels of cooperation.
Prioritize sectors where the U.S. faces major challenges, particularly the aerospace industry:
Component manufacturing, aircraft maintenance, air traffic control systems, and personnel training are areas where European aerospace not only matches but currently surpasses U.S. capabilities.
The U.S. aerospace sector is on the brink of a deep structural crisis, affecting safety, production, and operational capabilities.
This is one of the few competitive advantages Europe holds, and it must be leveraged strategically.
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.
Ready to move forward?
Submit your request for a confidential, tailored proposal—whether you're seeking a customised briefing, full-scale analysis, price projections, or strategic insight. GARI works with governments, companies, and institutions to deliver decision-ready outputs. Simply outline your objectives, and we’ll respond with a bespoke proposal aligned to your needs.
Submitting a request is non-binding and does not constitute a commitment.
.jpg)
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.
