Sustainability Dossier
Summary
1. Introduction: Context and Governance
1.1. Introduction to the EU's Green Transition
The European Union is undergoing a profound transformation to become a climate-neutral community by 2050. This transition, launched with the European Green Deal, involves all economic sectors and aims to combine environmental sustainability, economic growth, and social inclusion. For SMEs, it represents both a regulatory challenge and a strategic opportunity.
Climate change and biodiversity loss require a systemic revision of the European development model. The Green Deal is not just an environmental plan, but an integrated strategy encompassing energy, transport, industry, agriculture, and nature protection. Sustainability is now a cross-cutting priority in all European policies. For SMEs and business networks, this evolution entails new regulatory obligations and compliance requirements, but also opportunities linked to innovation, funding, and emerging markets. The EU actively supports businesses with tools dedicated to competitiveness, digitalization, and the ecological transition. European environmental governance is multi-level: it involves EU institutions, national governments, and local actors, ensuring coordination, transparency, and participation. The "Fit for 55" legislative package, adopted in 2021, aims to reduce emissions by 55% by 2030, redefining rules and investments for the future. At the global level, the EU is a protagonist in sustainable finance. It contributes to the Green Climate Fund and collaborates with countries like Argentina, Canada, China, and India through the International Platform on Sustainable Finance. The High-Level Expert Group (HLEG) on sustainable finance, established in 2022, formulated recommendations to strengthen the role of the private sector in the green transition in middle and low-income countries.
1.2. EU Governance on Climate and Sustainability
The European Union's environmental governance is based on a multi-level decision-making system involving European Institutions, Member States, and local actors. The European Commission leads the legislative process, but the Parliament and the Council ensure democratic representation. The participation of SMEs in policy definition occurs mainly at the national level.
The European Commission plays a central role in defining environmental policies through specialized structures like the Directorate-General for Environment (DG ENV) and the Directorate-General for Climate Action (DG CLIMA). Legislative proposals drafted by the European Commission do not automatically enter into force but are subject to a process of examination, amendment, and negotiation between the European Parliament and the Council of the European Union, which represent citizens and Member States respectively. The process can conclude without the adoption of an act if no agreement is reached. When rules are approved, they can take different forms: regulations, which are directly applicable in all Member States, and directives, which require transposition through national legislation, allowing States to adapt their implementation to their specificities while respecting common objectives. To define technical aspects or practical application methods, the Commission can also adopt delegated or implementing acts, which complete the main legislation and ensure its uniform application. Environmental competences are shared between the EU and the Member States; both can adopt binding measures. An emblematic example is the European Climate Law, approved in 2021, which set the objective of climate neutrality by 2050 and a 55% reduction in net emissions by 2030. In July 2025, the Commission proposed an update with a new intermediate target for 2040: a 90% reduction in net emissions. To ensure coherence and monitor progress, a planning system based on the National Energy and Climate Plans (NECPs) was introduced, which each Member State must update regularly. These plans must be consistent with long-term national strategies and involve the direct participation of citizens, businesses, and local authorities, also offering SMEs and Chambers of Commerce the opportunity to actively contribute to policy definition. At the international level, the EU participates in multilateral initiatives for industrial safety, collaborating with bodies such as: the United Nations Economic Commission for Europe (UNECE), which promotes cooperation on cross-border incidents and environmental safety; the United Nations Environment Programme (UNEP), which works on accident prevention and global sustainability; the Organisation for Economic Co-operation and Development (OECD), which develops guidelines for chemical accident management and industrial safety. The EU is also one of the main actors in global climate finance, collaborating with the European Investment Bank (EIB). In 2022, the Commission allocated over €4 billion, largely destined for climate adaptation actions, while the EIB contributed €2.5 billion for projects related to renewable energies and energy efficiency, especially in Africa. In this context, the HLEG was established to analyse how to strengthen sustainable finance in middle and low-income countries. Composed of international experts, the group is tasked with formulating proposals to mobilise public and private investments to support the ecological transition in resource-limited contexts. The Green Climate Fund, on the other hand, is a multilateral fund created under the UN Framework Convention on Climate Change, with the objective of supporting projects in developing countries to reduce emissions and improve climate resilience. The EU is one of the main contributors, confirming its commitment to global climate finance.
1.3. EU Climate Objectives and Impacts for SMEs
The sharing of responsibilities between the European Union and the Member States is a key element of climate governance, with direct implications for SMEs and territories. While the EU defines common objectives, such as climate neutrality by 2050, it is up to individual countries to decide how to achieve them, adapting measures to their own economic and social realities. This multi-level approach creates opportunities and challenges that businesses must know how to interpret.
The structure of European climate governance allows Member States to define intermediate targets, choose the technologies to adopt, and design support mechanisms, often in collaboration with local authorities and economic actors. For SMEs, this means operating in a continuously evolving regulatory context, where it is fundamental to understand key tools like the Emissions Trading System (EU ETS), the Effort Sharing Regulation, and sectoral regulations on transport and land use. The EU's approach is systemic and inclusive, based on the awareness that the climate transition requires coordinated action at all levels of government and in all economic sectors. To support this transformation, the EU has integrated climate objectives into its own budget: between 2021 and 2027, climate-related spending amounts to approximately €658 billion, distributed through the Multiannual Financial Framework and the NextGenerationEU plan. These resources are transversally incorporated into main European programmes, such as the Common Agricultural Policy, Cohesion Policy, Horizon Europe, the Connecting Europe Facility, and the Recovery and Resilience Facility. For SMEs, this translates into funding opportunities that go beyond environmental programmes, including economic, technological, and innovation initiatives. A targeted example is the LIFE Programme, which dedicates approximately €905 million to climate change mitigation and adaptation. SMEs are considered central actors in this programme, together with public entities and civil society organisations. LIFE funding can support the development of sustainable business models, energy efficiency, and climate resilience. In addition to grants, the EU mobilises private investments through mixed financial instruments, such as the European Fund for Sustainable Development Plus (EFSD+) and the External Action Guarantee. These mechanisms combine European grants with loans and venture capital, reducing risk for investors and facilitating access to funding. For SMEs active in international markets or involved in global value chains, they represent a concrete opportunity to start new collaborations and access strategic resources.
1.4. Stakeholder Involvement and Inclusive Governance
The European climate transition is based on the active involvement of economic and social actors in policy definition, with tools that allow SMEs and Chambers of Commerce to participate in decision-making processes. Through the National Energy and Climate Plans and the Social Climate Plans, businesses can contribute to the design of concrete measures, access targeted funding, and influence the implementation of climate strategies at the territorial level.
The European Union has provided, through regulatory instruments such as the Energy and Climate Governance Regulation, that Member States consult qualified stakeholders in drafting the National Energy and Climate Plans and long-term climate strategies. This involvement includes public and private subjects, with the objective of ensuring that measures are calibrated to the needs of the territories and different economic categories. For SMEs and Chambers of Commerce, this represents a concrete opportunity to contribute to the definition of policies that take into account business and local specificities. The same principle was applied to the preparation of the Social Climate Plans, necessary to access funding from the Social Climate Fund. In Italy, the plan was completed and ready to be transmitted to the European Commission. It foresees an overall investment of €9.3 billion, articulated in measures for the energy efficiency of public buildings and vulnerable micro-enterprises, support for families exposed to energy price hikes, the development of public mobility in disadvantaged areas, and the introduction of digital tools to facilitate access to transport for subjects in fragile conditions. These measures are designed to mitigate the effects of the extension of the ETS2 system, which from 2027 will also include the building and transport sectors, with possible impacts on energy and fuel costs. The public consultation on the plan concluded in June 2025, involving administrations, local authorities, associations, and economic representatives. For SMEs, participating in these processes means being able to contribute to the definition of more effective and proportionate measures, as well as accessing targeted support tools. The EU has also activated technical support mechanisms to facilitate the drafting of the plans, including the Technical Support Instrument and the CCEG-SCF expert group, which promotes the exchange of good practices between Member States and stakeholders. Beyond formal consultations, businesses can participate in public consultations and impact assessments, contributing data, experiences, and proposals. This approach strengthens the quality of policies and allows SMEs to position themselves actively in the transition towards a more sustainable economy.
2. Key Policies and Tools
2.1. The European Green Deal
The European Green Deal, presented in 2019, is the EU's central strategy to achieve climate neutrality by 2050. Through a set of legislative and financial instruments, the plan involves all economic sectors and aims to transform environmental challenges into opportunities for sustainable growth. The measures include binding targets, post-pandemic investments, and structural reforms affecting energy, transport, buildings, industry, and biodiversity.
The European Green Deal strategy is based on a just transition, articulated in a vast range of legislative and financial instruments that involve every economic sector: energy, transport, agriculture, industry, and biodiversity.
In response to the economic crisis caused by the COVID-19 pandemic, the Green Deal was integrated into the EU's recovery strategy. Through the NextGenerationEU plan and the long-term budget, the Union has allocated about one third of the total €1,800 billion to support green objectives. Among the most relevant legislative instruments is the Fit for 55 packages, which aims to reduce net emissions by at least 55% by 2030 compared to 1990 levels. The included measures encompass the expansion of the emissions trading system, the introduction of the Carbon Border Adjustment Mechanism to counter carbon leakage, and the creation of a €86 billion Social Climate Fund, destined to support vulnerable families and SMEs during the ecological transition.
Looking to the future, the Commission has proposed a further target for 2040: a 90% reduction in net emissions, in line with the Paris Agreement. The Green Deal also promotes profound sectoral transformations. In the energy sector, the REPowerEU plan accelerates the development of renewable sources and energy efficiency. In the transport sector, the EU aims to phase out internal combustion engines by 2035, investing in sustainable fuels and green infrastructure. The building sector is affected by a wave of renovations to improve energy performance, while industry is at the centre of the Net-Zero Industry Act, aimed at strengthening European production of clean technologies.
In parallel, the Biodiversity Strategy and the Nature Restoration Law aim to protect ecosystems and enhance natural carbon sinks, contributing to environmental resilience and quality of life. In summary, the European Green Deal is not just a climate policy, but an integrated vision for a greener, fairer, and more competitive economy.
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2.2. Vision and Roadmap: Fit for 55, REPowerEU and the European Climate Law
The European Union's climate strategy is based on three main pillars: the European Climate Law, which sets binding emissions reduction targets; the Fit for 55 packages, which translates these targets into sectoral legislative measures; and the REPowerEU plan, which accelerates the energy transition in response to the geopolitical crisis. These tools outline a clear path towards climate neutrality by 2050, with direct impacts on the operational context of European businesses.
The European Climate Law made the objective of climate neutrality by 2050 binding, defining two intermediate milestones: a 55% reduction in net emissions by 2030 and, according to the Commission's July 2025 proposal, a 90% reduction by 2040. These targets guide all EU sectoral and financial policies.
To implement these commitments, the EU adopted the Fit for 55 legislative packages, which includes the revision of key regulations such as the Emissions Trading System (EU ETS), the Effort Sharing Regulation, and the directives on renewable energy, energy efficiency, transport, buildings, and land use. The package aims to translate climate targets into concrete obligations for Member States, businesses, and citizens.
In response to the energy crisis linked to the invasion of Ukraine, the EU strengthened its strategy with the REPowerEU plan, which accelerates the energy transition by focusing on three lines: diversification of sources, development of renewables, and reduction of demand. The plan raised the targets for renewable energies (at least 42.5% by 2030, with an indicative target of 45%) and for energy efficiency (an 11.7% improvement by 2030).
For SMEs and Chambers of Commerce, this roadmap represents a structural change. Businesses will have to adapt to new environmental standards but will be able to access support tools like the Innovation Fund, the Modernisation Fund, the Social Climate Fund, and the funding from the Recovery and Resilience Facility. The clarity of long-term objectives favours the planning of investments in clean technologies, energy efficiency, and sustainable business models, strengthening competitiveness in a European market increasingly oriented towards decarbonisation.
2.3. The ETS and ETS2 System: Market Regulation and Economic Impacts
The European Union Emissions Trading System (EU ETS) and its extension to diffuse sectors (ETS2) constitute central instruments of the European climate strategy. Beyond regulating emissions in industrial sectors and energy consumption, the system integrates market stability mechanisms to guarantee an effective and predictable carbon price. These elements have significant economic repercussions for businesses, citizens, and investment planning.
Introduced in 2005, the EU ETS is a regulated emissions market based on the cap-and-trade principle. The European Union sets an overall limit on greenhouse gas emissions in the covered sectors, divided into emission allowances (one allowance corresponds to one tonne of CO₂ equivalent). Companies can buy or sell these allowances, favouring emissions reduction where it is less costly to intervene. In this way, the system promotes economically advantageous solutions to achieve climate objectives. Currently, the mechanism covers about 10,000 installations in the energy, high-intensity energy industry, intra-EU aviation, and, from 2024, maritime transport sectors. By 2030, a 62% reduction in emissions compared to 2005 levels is foreseen. Allowances are allocated mainly through public auctions, according to the "polluter pays" principle, but free allocations are provided for sectors exposed to the risk of carbon leakage, such as chemicals, metallurgy, and construction materials. To guarantee market stability, the EU introduced the Market Stability Reserve (MSR) in 2019, which regulates the supply of allowances based on the total number of allowances in circulation (TNAC). If the TNAC exceeds a pre-established threshold, the MSR withdraws a portion of allowances from auctions; if it falls below a minimum threshold, it releases a defined quantity. Since 2023, allowances accumulated beyond a safety threshold are permanently invalidated, strengthening the price signal and preventing structural surpluses.
With the 2023 revision, ETS2 was introduced, operational from 2027, which extends the carbon price principle to diffuse sectors like buildings and road transport. This new system will have a separate cap, an autonomous reduction trajectory, and price stability mechanisms to avoid excessive volatility. ETS2 represents a turning point: it introduces a price signal for millions of consumers and businesses, making the environmental cost of daily energy choices visible.
The carbon price, determined by the interaction between supply and demand for allowances, is a key indicator for the climate transition. A high price incentivises decarbonisation and the adoption of clean technologies, while a price that is too low risks weakening the system's effectiveness. Thanks to the MSR and regulatory reforms, the price has reached more stable levels, at times exceeding €90/tonne.
A solid and predictable carbon market allows businesses to plan with greater certainty, evaluate the return on investments in energy efficiency, and position themselves strategically in sustainable supply chains. Furthermore, the proceeds from ETS auctions feed strategic funds like the Innovation Fund, the Modernisation Fund, and the Social Climate Fund, which finance projects for industrial decarbonisation, renewable energies, and sustainable mobility, offering opportunities also to SMEs as technology suppliers, partners, or funding beneficiaries.
2.4. Social Climate Fund: Equity in the Transition
The Social Climate Fund (SCF) is a central instrument of the European climate strategy to ensure that the transition towards climate neutrality is fair and inclusive. Born with the Fit for 55 legislative package, the SCF accompanies the introduction of the ETS2 system, which from 2027 will extend the carbon price to the building and road transport sectors. The Fund was conceived to mitigate the social and economic impacts of this extension, particularly for vulnerable population segments and micro-enterprises.
The Fund will be operational between 2026 and 2032 and will mobilise approximately €86.7 billion, becoming one of the EU's main financial instruments to support the green transition. The resources derive from ETS2 allowance auctions, integrated by 50 million existing ETS allowances and a mandatory co-financing from Member States equal to at least 25% of their respective Social Climate Plans. This financial structure guarantees a multi-annual basis to support structural interventions and temporary measures, with a strong orientation towards social justice and economic resilience.
To access the funds, each Member State had to present a Social Climate Plan to the European Commission by June 2025. The plans describe the measures and investments destined to support families in conditions of energy or transport poverty, micro-enterprises vulnerable to increased energy costs, and users of public transport in disadvantaged areas. The foreseen actions include the energy requalification of buildings, the installation of clean heating and cooling systems, the integration of renewable energies, and the development of low or zero-emission mobility solutions. A portion of the funds can also be destined for direct income support, to attenuate the immediate impact of the carbon price.
A distinctive element of the SCF is its participatory approach. Social Plans must be elaborated through national consultations involving local and regional authorities, social and economic partners, civil society organisations, and youth groups. This process ensures that measures are calibrated to the real needs of the territories and that aid reaches those who need it most.
For SMEs and Chambers of Commerce, the SCF represents a strategic opportunity to contribute to the definition of the plans, promote interventions that strengthen the resilience and innovation of the local business fabric, and access funding for the energy transition, digitalisation, and sustainable mobility. Micro-enterprises can benefit from dedicated measures, while more structured SMEs can apply as suppliers of technological solutions, partners in territorial projects, or beneficiaries of incentives for energy efficiency.
To facilitate the preparation of Social Plans, the Commission activated the Technical Support Instrument, which in the 2024-2025 biennium provides technical assistance to ten Member States, including Italy. A specific working group was also established within the Committee of Experts on Climate Policy (CCEG-SCF), with the objective of promoting the exchange of good practices and ensuring constant dialogue on the implementation of the Fund.
The SCF represents a significant evolution in European climate policy, not only for its financial dimension but for the integrated approach that unites environmental ambition and social justice. For businesses, it is both a challenge and an opportunity: on one hand, the introduction of new costs linked to fuels; on the other, the possibility to access strategic resources, strengthen competitiveness, and contribute to a transition that is truly inclusive.
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2.5. Clean Industrial Deal: An Industrial Strategy for the European Green Transition
In February 2025, the European Commission presented the Clean Industrial Deal, a strategy that redefines the role of industry in the Union's ecological transition. The plan stems from the awareness that the industrial sector, while being one of the main sources of emissions, also represents a fundamental engine of innovation, employment, and economic growth. The objective is to transform environmental challenges into opportunities for industrial revival, focusing on decarbonisation, strategic autonomy, and clean technologies.
The Clean Industrial Deal is based on a clear vision: industry must become an integral part of the European response to climate change. To achieve climate neutrality by 2050, it is necessary to build a resilient industrial base, capable of combining environmental sustainability and economic competitiveness. In this context, the plan promotes the large-scale diffusion of clean technologies and sustainable production processes, through a coherent set of regulatory reforms, innovative financial instruments, market incentives, and international partnerships. The Clean Industrial Deal does not present itself as an isolated document but fits into the broader framework of the Union's green policies, strengthening the objectives of the European Green Deal, the European Climate Law, the Fit for 55 package, the Carbon Border Adjustment Mechanism, the Social Climate Fund, and the Circular Economy Action Plan. In this way, the strategy contributes to an organic integration between industrial, energy, climate, and trade policies, ensuring that the ecological transition is not only sustainable from an environmental point of view but also advantageous economically and inclusive socially.
From a governance perspective, the Clean Industrial Deal represents an important step towards overcoming the fragmentation of national industrial policies, which often generates regulatory uncertainty and hinders investments. The plan proposes a harmonised framework at the European level, capable of offering greater predictability to businesses, project developers, and financial actors. This alignment is considered essential to accelerate the clean industrial transition and keep Europe competitive and attractive for sustainable investments. On the financial front, the Commission estimates that to achieve the 2030 climate and energy objectives, annual investments of €1,240 billion will be needed. Since about 70% of the European economy is financed by banks, the Clean Industrial Deal aims to mobilise private capital through risk reduction mechanisms, mixed finance instruments, and greater regulatory clarity. Among the foreseen measures are the creation of an Industrial Decarbonisation Bank, the expansion of the InvestEU programme, and the introduction of Carbon Contracts for Difference, instruments designed to support the decarbonisation of the industrial sector on a large scale.
Particular attention is reserved for small and medium-sized enterprises, which constitute the heart of the European economy and often encounter difficulties in accessing credit, understanding regulations, or adopting innovative technologies. The Clean Industrial Deal aims to remove these obstacles, promoting simplified green financial instruments, tailored consultancy services, and aggregated funding platforms. Furthermore, it supports the growth of cleantech startups through venture debt and guarantees Power Purchase Agreements, which help SMEs better manage energy costs and invest in renewable sources. The strategy also encourages circularity and resource efficiency, promoting initiatives like the Circular Economy Act and the EU Critical Raw Materials Centre, which open new opportunities for SMEs in the sectors of recycling, remanufacturing, and sustainable material management. These measures contribute to reducing Europe's dependence on external suppliers and favour the emergence of new markets and business models for smaller businesses.
Another central element of the Clean Industrial Deal is the recognition of the role of human capital in industrial transformation. Through the creation of a "Skills Union", the strengthening of Erasmus+ funds, and sectoral training programmes, the plan intends to provide workers and entrepreneurs with the tools necessary to face the challenges of a clean industrial economy. This aspect is particularly relevant for SMEs, which often lack the resources to invest autonomously in staff training. In conclusion, the Clean Industrial Deal marks a paradigm shift in European industrial policy, proposing itself not as simple sector regulation, but as a strategic instrument that combines economic resilience and environmental responsibility. For SMEs and their representative organisations, the plan is not only a guide for regulatory adaptation but a concrete opportunity to innovate, grow, and actively contribute to the green transition of European industry.
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2.6. Protection Against Carbon Leakage
In the context of the European climate transition, protection against carbon leakage is an essential measure to avoid environmental policies penalising the competitiveness of European industry. The risk that businesses transfer production to countries with less rigorous regulations is particularly relevant in sectors exposed to international competition.
The main measure of protection against carbon leakage consists of the free allocation of emission allowances to industrial installations considered at risk. These allowances are allocated based on performance benchmarks, calculated on the average emissions of the ten most efficient installations in the EU and EEA-EFTA countries. The system rewards efficiency: businesses operating below the benchmark receive sufficient allowances to cover their emissions, while less efficient ones must purchase additional allowances or reduce emissions.
During phase 3 of the EU ETS (2013-2020), free allocation started from 80% coverage in 2013, progressively reduced to 30% in 2020. However, sectors considered at high risk of relocation continued to receive a greater share, identified based on criteria such as trade intensity and the economic weight of climate policies. For example, a sector with extra-EU trade exceeding 30% or with climate costs exceeding 30% of gross value added was classified as exposed.
With phase 4 (2021-2030), the EU strengthened and made this system more dynamic. The list of at-risk sectors was updated in 2019 and will remain valid for the entire phase. These sectors continue to receive 100% of free allowances based on the benchmark, while for less exposed sectors, free allocation will be progressively eliminated after 2026, until it disappears by 2030. Furthermore, allocation is now adjusted annually based on actual production levels, with a 15% threshold calculated on a two-year moving average. This mechanism allows the adaptation of allowances to real production variations, avoiding distortions and guaranteeing greater equity.
To keep the system updated relative to technological progress, the EU foresaw the revision of benchmarks twice during phase 4. Each benchmark is subject to an annual reduction between 0.2% and 1.6%, depending on the sector's innovation rate. This dynamic approach ensures that free allocation remains coherent with climate objectives, while incentivising continuous improvement.
Understanding the functioning of protection against carbon leakage allows businesses to anticipate cost pressures, participate in political discussions, and seize opportunities for innovation and efficiency improvement. The European framework for protection against carbon leakage represents a balance between environmental ambition and economic pragmatism. It ensures that climate policies do not unjustly penalise European industry and promotes a gradual and competitive transition towards a low-emission economy.
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3. Strategic Sectors and Opportunities
3.1. Agriculture and the European Green Deal
Agriculture is one of the key sectors of the European Green Deal, not only for its role in food production but also for its potential contribution to environmental, economic, and social sustainability. In a context marked by climate change, biodiversity loss, and economic instability, the agricultural sector is called to transform profoundly to become an integral part of the European Union's green transition.
European agriculture performs a multifunctional role: beyond guaranteeing food security, it supports rural communities, generates employment, and contributes to land management. However, it is also one of the sectors most vulnerable to the impacts of climate change and responsible for a significant share of greenhouse gas emissions. For this reason, the European Commission has placed agriculture at the centre of the Green Deal strategy, with the objective of making it more sustainable, resilient, and inclusive. The agricultural transition promoted by the Green Deal is based on an integrated approach that combines sustainable agricultural practices, technological innovation, and social inclusion. Sustainable practices include precision agriculture, the reduction of pesticide and fertiliser use, biodiversity protection, and efficient management of natural resources. Technological innovation is supported by digital tools, nature-based solutions, and technologies for emissions reduction. Social inclusion aims to ensure that no territory or producer is excluded from the transition process, with particular attention to rural areas and small farms. Businesses must adapt to new regulatory standards and growing consumer expectations regarding sustainability. At the same time, concrete prospects open up to access European funding, valorise sustainable products, participate in territorial innovation networks, and strengthen competitiveness in an agri-food market increasingly oriented towards environmental quality. The Green Deal also promotes a systemic vision of sustainable food systems, where agriculture is closely connected to public health, food security, and environmental protection. In this context, Chambers of Commerce can play a strategic role in accompanying agricultural and agri-food businesses in adapting to the new political scenario, facilitating access to available resources, and promoting a greener, more inclusive, and competitive rural economy.
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3.2. The Common Agricultural Policy: Sustainability, Resilience and Innovation
The Common Agricultural Policy (CAP) is one of the European Union's historic policies and today represents a central instrument for integrating agriculture into the green transition. In line with the objectives of the European Green Deal, the CAP supports an agricultural model that integrates all aspects of sustainability: environmental, economic, and social, with direct repercussions on the rural business fabric and the SMEs of the agri-food sector.
The new orientation of the CAP reflects the EU's commitment to reducing the environmental impact of agriculture, strengthening the economic resilience of farms, and supporting rural communities. About 40% of the CAP budget is now destined for actions linked to climate, biodiversity, and the sustainable management of natural resources. Among the main instruments are the eco-schemes, which incentivise eco-compatible agricultural practices; strengthened conditionality, which links payments to respect for environmental criteria; and agro-climatic-environmental measures, which support interventions for ecosystem protection. These measures favour the ecological transition and reduce dependence on external inputs, improving climate risk management. From an economic perspective, the CAP aims to guarantee a stable and competitive agricultural income, even in a context of increasing volatility. Beyond direct payments, the policy includes risk management instruments, support for modernisation and innovation, and promotion of producer organisations to strengthen farmers' bargaining power. Agricultural SMEs can access sectoral programmes for investments, production planning, and quality improvement, with particular attention to strategic sectors like fruit and vegetables, wine, olive oil, and beekeeping. Social sustainability is another pillar of the CAP. The agricultural sector not only produces food but supports territorial cohesion, rural employment, and quality of life in less urbanised areas. Among the most relevant measures are redistributive payments for small farms, support for young farmers and gender equality, and infrastructural investments to improve services in rural areas. Programmes like LEADER allow local communities to design tailor-made solutions, favouring participatory local development. In this context, Chambers of Commerce can facilitate partnerships, disseminate knowledge, and accompany rural entrepreneurship. Finally, the CAP actively promotes research and innovation, in synergy with Horizon Europe and the European Innovation Partnership for Agriculture (EIP-AGRI). Operational Groups (OG) and Agricultural Knowledge and Innovation Systems (AKIS) favour the co-creation of practical solutions, involving farmers, researchers, and consultants. For SMEs, this means access to advanced technologies, sustainable practices, and collaboration networks that strengthen competitiveness and adaptive capacity. The CAP, in its current configuration, is not only an income support policy but a strategic instrument to accompany European agriculture towards a more sustainable, innovative, and inclusive productive model. For SMEs and Chambers of Commerce, it represents a concrete opportunity to contribute to the green transition, valorise local productions, and strengthen the link between agriculture, territory, and economic development.
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3.3. The "Farm to Fork" Strategy: Social Sustainability in Agriculture
The "Farm to Fork" strategy is one of the pillars of the European Green Deal and aims to transform food systems, making them fairer, healthier, and more sustainable. The approach is integrated and involves the entire agri-food chain, from production to distribution, up to consumption and waste management. For businesses, this strategy represents a structural change that affects production practices, territorial relations, and consumer expectations.
The Farm to Fork strategy translates into operational objectives that include the reduction of pesticide and fertiliser use, the promotion of organic agriculture, the improvement of animal welfare, and the strengthening of food security. These objectives are strictly linked to environmental sustainability, but also to the social dimension, which is fundamental to guaranteeing an inclusive and territorially balanced transition. Social sustainability is integrated into the Common Agricultural Policy (CAP) through measures that aim to support small farms, favour generational renewal, and promote gender equality. Redistributive payments, support for young farmers, and infrastructural investments to improve quality of life in rural areas are instruments designed to strengthen territorial cohesion and counter depopulation. Furthermore, social conditionality links access to funding to respect for European labour regulations, contributing to improving employment conditions in the agricultural sector. Programmes like LEADER allow local communities to design tailor-made development strategies, valorising territorial resources and promoting social innovation. In this context, Chambers of Commerce can play an active role in facilitating partnerships, promoting entrepreneurial training, and accompanying agricultural and agri-food businesses in adapting to the new political scenario. For SMEs, social sustainability in agriculture represents a strategic area of intervention. Businesses can participate in local development projects, offer services and solutions for social inclusion, and strengthen the link between agricultural production, territory, and community. Furthermore, they can access local networks that favour economic diversification, social innovation, and entrepreneurial resilience. The Farm to Fork strategy and social sustainability are not accessory elements but essential components of the European green transition. For SMEs and Chambers of Commerce, engaging in this dimension means contributing to the construction of fairer food systems, more resilient territories, and a more inclusive and competitive rural economy.
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3.4. Bioenergy and Renewable Resources in Rural Areas
Bioenergy is a renewable source obtained from the transformation of biomass, such as agricultural and forest residues and organic waste. Within the framework of the European Union's energy transition, it represents a strategic resource to produce heat, electricity, and fuels. In particular, in rural areas, it offers concrete opportunities to diversify energy supply and strengthen economic and environmental sustainability.
Bioenergy can be integrated into agricultural and forestry business models, generating new income sources and favouring the efficient use of local resources. Businesses can valorise agricultural and forest residues to produce energy, invest in biogas or biomass plants, and offer energy services at the territorial level. Chambers of Commerce can play a facilitation role, promoting available funding opportunities and supporting local development in a sustainable key.
Bioenergy production is regulated by stringent environmental criteria. Producers must respect norms on the protection of soil, water, and air, while biofuels and bioliquids must guarantee a significant reduction in greenhouse gas emissions, as foreseen by the Renewable Energy Directive. Forest biomass must also follow principles of sustainable management to protect biodiversity and ecosystem services. The EU has also introduced measures to avoid negative impacts on land use and food security.
The Common Agricultural Policy supports investments in renewable energies and agro-environmental practices. The LIFE Programme funds innovative projects, while rural development programmes promote energy infrastructures and high-efficiency technologies. These tools offer concrete opportunities to improve energy efficiency, reduce operational costs, and contribute to European climate objectives.
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3.5. Carbon Farming and the CRCF Regulation
Carbon farming is a practice that contributes to the removal of carbon from the atmosphere through sustainable agricultural and forestry methods. Within the framework of the European Union's climate strategy, it represents a concrete instrument to improve soil health, protect biodiversity, and strengthen the economic stability of rural areas. The CRCF Regulation, adopted in 2024, defines its certification framework at the European level.
Carbon farming is based on practices that favour carbon sequestration in soils and forests, such as the rewetting of peatlands, agroforestry, conservation tillage, cover crops, and the optimised use of fertilisers. These natural solutions improve the resilience of farms, reduce emissions, and contribute to food security.
The Carbon Removals and Carbon Farming Regulation (CRCF) introduces a voluntary certification system for activities that remove carbon, with quality criteria, monitoring requirements, and a transparent verification process. The establishment of a central register is foreseen by 2028, while in the meantime individual schemes will maintain their own registers. Group certification simplifies access for small farmers and foresters, and the use of remote sensing technologies, like Copernicus, reduces monitoring costs. The CRCF opens the possibility to participate in certified projects, access European funding (CAP, LIFE, Horizon Europe, regional funds), and improve market positioning. Chambers of Commerce can promote training, accompany businesses in the certification process, and favour the creation of territorial networks.
The CRCF integrates with other European policies, such as the CAP, the LULUCF Regulation, and initiatives like the New European Bauhaus policy and the Circular Bio-based Europe Joint Undertaking partnership, which promote carbon storage in building products. The Commission is currently implementing the regulation through delegated acts and workshops with stakeholders.
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3.6. Land Use and the LULUCF Regulation
Soil plays a fundamental role in the European Union's climate strategy. Forests, wetlands, agricultural areas, and urban green spaces can absorb CO₂ and contribute to climate change mitigation. However, practices like deforestation or soil degradation can transform it into a source of emissions. To address this challenge, the EU adopted the LULUCF Regulation, which governs land use and forestry.
The Regulation on Land Use, Land Use Change and Forestry (LULUCF) establishes the rules for accounting for emissions and carbon removals deriving from land management. In the 2021-2025 phase, the "no debit" principle applies, which requires Member States to compensate emissions with equivalent removals. From 2026 to 2030, the regulation introduces more ambitious objectives, extending the field of application to all managed lands and aiming for a 15% increase in net carbon removals at the European level.
Monitoring is based on advanced technologies, such as satellite images and geographical data, to guarantee transparency and precision. Member States must integrate LULUCF into their National Energy and Climate Plans (NECP) and CAP Strategic Plans, ensuring coherence between agricultural, energy, and environmental policies. The regulation represents an opportunity to promote sustainable practices like reforestation, peatland restoration, and responsible forest management. It is possible to access European funding through the CAP, the LIFE Programme, Horizon Europe, and cohesion funds. Furthermore, thanks to the CRCF Framework, carbon removals can be certified and traded in voluntary markets.
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4. Finance, Cooperation and Innovation
4.1. EU Funding for the Green Transition
The transition towards a climate-neutral economy is a strategic priority of the European Union, supported by an unprecedented funding system. Between 2021 and 2027, over one third of the EU budget is destined for initiatives linked to climate, with the objective of reducing emissions, strengthening economic resilience, and promoting sustainable innovation.
The EU has integrated climate objectives into its entire budget, making sustainability a cross-cutting priority that permeates agricultural, industrial, energy, and cohesion policies. Summing the Multiannual Financial Framework and the NextGenerationEU recovery plan, climate-related spending between 2021 and 2027 reaches about €658 billion. This investment is not limited to emissions reduction but also aims to strengthen the resilience of European economies to the impacts of climate change.
For small and medium-sized enterprises and Chambers of Commerce, European funding offers tools to improve energy efficiency, develop sustainable business models, and access new markets. The LIFE Programme, for example, manages over €900 million for climate mitigation and adaptation projects, with a strong focus on innovative solutions and environmental governance. SMEs are recognised as central actors in this programme.
Another pillar is mixed finance, which combines European grants with private investments to reduce risk and attract capital. The European Fund for Sustainable Development Plus (EFSD+) and the External Action Guarantee mobilise resources in partner countries, also offering opportunities to European businesses active in international markets. These instruments facilitate access to funding for sustainable projects and promote competitiveness in an economic context increasingly oriented towards sustainability.
Access to funding is simplified by the EU's Funding and Tenders Portal, a digital platform that allows businesses to consult open calls, apply, create partnerships, and receive technical assistance. This instrument represents a strategic entry point for SMEs that want to actively participate in the green transition.
In summary, European funding for the green transition constitutes an ecosystem of opportunities. For SMEs and Chambers of Commerce, knowing and knowing how to use these tools means not only adapting to new regulations but also becoming protagonists of a more sustainable, competitive, and inclusive economy.
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4.3. International Cooperation and Global Partnerships
The green transition requires a global commitment. The European Union has developed a network of international partnerships to address environmental challenges on a global scale. For SMEs and Chambers of Commerce, this openness represents a concrete opportunity to access new markets, participate in cross-border projects, and contribute to sustainable innovation.
The EU has over time built an articulated network of environmental partnerships with industrialised economies and emerging countries, including Canada, Japan, South Korea, the United States, Brazil, China, India, Mexico, and South Africa. These agreements are based on shared commitments for sustainability and include joint initiatives, technical exchanges, and research projects. Concrete examples are the EU-China Environment Project and the EU-India Water Partnership, focused on resource efficiency and environmental governance, and the framework agreement with Brazil, which promotes environmental protection.
Cooperation with the United States, although lacking a structured political dialogue, develops through technical relations between the European Commission and agencies like the EPA. This dialogue facilitates regulatory convergence on themes like the circular economy, waste management, and chemical substance regulation, reducing barriers for European businesses.
Through the European Neighbourhood Policy and the enlargement process, the EU promotes the adoption of its own environmental standards in neighbouring countries. Initiatives like EU4Environment, EU Water Initiative Plus, and Water and Environment Support offer technical assistance and funding, often with a focus on SMEs. These tools allow businesses to operate in more stable regulatory contexts and integrate into the single market.
In geopolitically complex areas, the EU maintains its environmental commitment. In Africa, the Joint Africa-EU Strategy and the Cotonou Agreement offer a framework for cooperation on climate resilience, food security, and resource management. In the Arctic, the EU collaborates with regional partners to protect fragile ecosystems and promote sustainable development, with attention to local communities.
4.4. International Climate Finance and the EU's Role
International climate finance is a key tool to support the ecological transition in developing countries. The European Union has assumed a leading role in this area, becoming the world's main provider of public climate finance.
Climate finance allows more developed countries to support mitigation and adaptation projects in developing countries, promoting a fair and inclusive transition. The EU, together with its Member States and the European Investment Bank (EIB), mobilised over €28.5 billion in climate finance in 2022. These resources supported projects in areas like climate resilience, the energy transition, and the strengthening of institutional capacities, with a direct impact also on collaboration opportunities for European businesses.
The European Commission contributed over €4 billion, destining more than half to adaptation actions. The EIB disbursed €2.52 billion, with a focus on energy efficiency and renewable energies, particularly in Africa. These investments not only help partner countries face the impacts of climate change but also open spaces for European SMEs, which can export sustainable technologies and participate in international projects.
The EU's commitment fits into the framework of the Paris Agreement, particularly in Article 2.1c, which foresees the orientation of financial flows towards low-emission and climate-resilient development. The EU has aligned its financial instruments with climate objectives, contributing to surpassing the global objective of $100 billion per year in climate finance, as confirmed by an OECD report.
To strengthen sustainable finance at the global level, the EU created the International Platform on Sustainable Finance (IPSF), which involves partners like Argentina, Canada, China, India, and Kenya. The platform promotes the harmonisation of standards and mobilises private capital for sustainable investments. Furthermore, the HLEG published recommendations to improve access to climate finance in the most vulnerable countries.
Participating in projects funded by the EU, collaborating with international partners, and accessing emerging markets means actively contributing to the global ecological transition. Understanding the European strategy allows businesses to align with international standards and position themselves as responsible actors in the global economy.
In summary, the EU's role in climate finance reflects an integrated vision of sustainability. Through support to developing countries, the alignment of financial flows with climate objectives, and the promotion of global partnerships, the EU ensures that climate action is ambitious, fair, and inclusive.
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5. Water and Oceans in the European Union
5.1. EU Water Governance: Structure, Tools and Participation
Effective governance of water resources is essential to guarantee resilient, sustainable systems capable of responding to environmental and climate pressures. The European Union has over time built an articulated regulatory and operational framework, based on the Water Framework Directive (WFD), which defines common rules for the integrated management of water resources. This system includes planning tools, monitoring mechanisms, collaboration platforms, and cross-sectoral initiatives, with the objective of protecting water quality, promoting use efficiency, and favouring stakeholder participation.
The WFD, adopted in 2000, constitutes the main reference for the European Union's water policy. It establishes environmental objectives for all types of waters (inland, coastal, groundwater) and promotes an integrated approach based on river basin districts. This model favours cooperation between Member States that share river basins, with positive repercussions also for businesses operating in border areas. The WFD requires Member States to draft River Basin Management Plans and Programmes of Measures every six years, based on public consultations. Alongside the WFD, the EU adopted specific directives for groundwater and surface waters, which include lists of priority pollutants to monitor and update periodically. Among these are also emerging substances like PFAS, very persistent chemical compounds potentially harmful to health. For SMEs, particularly in the agricultural and manufacturing sectors, respect for these standards represents a regulatory obligation, but also an opportunity to improve the sustainability of production processes. To support the implementation of the WFD, the EU established the Common Implementation Strategy (CIS), a platform involving Member States, the European Commission, candidate countries, and stakeholders from different sectors. The CIS technical working groups elaborate guidelines and thematic reports useful for translating policies into operational practices. Interested organisations can apply to participate, if in possession of the required qualifications. Water governance is furthermore integrated with other European initiatives. The Stakeholder Platform for Zero Pollution, created with the Committee of the Regions, brings together actors from the health, agricultural, transport, and digitalisation sectors, favouring cross-sectoral dialogue and the definition of shared solutions. Local involvement is strengthened by the Green Deal Going Local campaign, which aims to make territorial authorities and business networks active partners in the implementation of environmental policies. Monitoring and transparency are central elements of water governance. The European Environment Agency (EEA) and the Joint Research Centre (JRC) regularly publish reports on progress towards quality and resilience objectives. Among these, the Zero Pollution Monitoring Report provides useful data to evaluate emerging risks and orient investments and business strategies. Looking to the future, the EU is expanding its governance framework with the European Ocean Pact and the foreseen Ocean Act of 2027. Although focused on marine ecosystems, these instruments are connected to freshwater policies, through common objectives of environmental restoration, pollution reduction, and stakeholder involvement. In summary, European water governance is an articulated and inclusive process, which combines legal obligations, technical tools, and multi-level participation.
5.2. European Water Resilience Strategy: Contents and Applications
Water resilience has become a strategic priority for Europe. Extreme events like droughts, floods, and fires are compromising economic and environmental stability, with direct impacts on businesses and communities. To address these challenges, the European Union adopted the European Water Resilience Strategy in 2025, an integrated framework that aims to restore the water cycle, protect resources, and guarantee equitable and safe access to water. This strategy not only responds to environmental and climate pressures but also promotes a sustainable and competitive water economy.
The European Water Resilience Strategy stems from the observation that the European water cycle has been altered by climate change, pollution, and over-exploitation. These factors have reduced the availability of fresh water and increased the vulnerability of economic and social systems. The EU's objective is to restore the water cycle, protect resources, and guarantee equitable and safe access to water, integrating these objectives with the European Green Deal and climate adaptation policies.
The strategy is articulated around three main axes: protect the water cycle from source to sea, promote a "water-smart" economy, and ensure clean and accessible water for all. Among the key initiatives is the "Water Efficiency First" Recommendation, which aims to improve water efficiency by 10% by 2030. Businesses are encouraged to reduce consumption, invest in reuse technologies, and adopt circular production models. These measures not only reduce operational costs but strengthen competitiveness in a context of increasing resource scarcity.
The European water sector is already among the most advanced in the world, with 40% of global patents on water technologies, a gross value added of €107 billion, and over 1.7 million jobs. The EU intends to consolidate this leadership, promoting green infrastructure, digital solutions, and technological innovation. This includes the reduction of losses in networks, the enhancement of soil retention capacity, and the use of intelligent monitoring and treatment systems. SMEs active in the technological, engineering, and environmental sectors can access new markets, offering solutions like sensors, advanced filters, digital platforms, and consultancy services.
The strategy also addresses risks linked to persistent pollutants, like PFAS, with estimated costs between €52 and €84 billion per year. For businesses, this implies the adoption of preventive measures and respect for more rigorous standards but also opens spaces for innovation in water treatment and the development of sustainable technologies.
Another pillar is equity in access to water. The EU recognises drinking water and sanitation services as fundamental human rights. The strategy foresees interventions to improve water infrastructures, support vulnerable communities, and promote fair tariff policies. The international dimension of the strategy fits into the EU's 2050 vision and the Water Action Agenda, promoted at the global level. Europe aims to strengthen cross-border cooperation, support international partnerships, and mobilise public and private investments. For SMEs, this opens opportunities for collaboration and access to new markets.
To support this transition, the EU mobilises public and private financial resources, including structural funds, research programmes like Horizon Europe, and loans from the European Investment Bank. The proceeds from the ETS system, now extended to maritime transport, can also be reinvested in the decarbonisation of sectors linked to water.
Finally, to monitor implementation and favour dialogue, the European Commission will launch the European Water Resilience Forum, biennially starting from December 2025. It will be a space for discussion between institutions, businesses, and civil society, useful for sharing good practices and promoting coordinated actions.
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5.3. EU Maritime Policies: Contents and Objectives of the European Ocean Pact
The ocean plays an essential role for the global climate, biodiversity, food security, energy production, and the maritime economy. The European Union, which has the largest exclusive economic zone in the world and concentrates about 40% of its population within 50 kilometres of the coast, has developed a strategic approach to the integrated management of marine spaces. The European Ocean Pact represents the reference framework for the coordination of the EU's maritime policies. The strategy responds to growing environmental, economic, and geopolitical pressures and defines common priorities for the protection of marine ecosystems, the development of the sustainable blue economy, maritime security, and international cooperation.
The European Ocean Pact, adopted on 5 June 2025, is an initiative that aims to integrate and coordinate the European Union's maritime policies into a single coherent framework. The EU, which possesses the largest maritime area in the world and sees 40% of its population living within 50 kilometres of the coast, considers the ocean not only as a natural heritage but as a strategic priority. The pact responds to the growing pressures on marine ecosystems, including pollution, climate change, exploitation, and geopolitical tensions.
The strategy is articulated around six priorities: protection of ocean health, promotion of the sustainable blue economy, support for coastal and island communities, development of research and innovation, strengthening of maritime security, and consolidation of international ocean governance.
The protection of marine ecosystems is at the centre of the pact. The Commission encourages Member States to designate and manage marine protected areas to reach the objective of 30% protection by 2030. It also promotes the creation of blue carbon reserves, like seagrass meadows, which contribute to climate mitigation. These initiatives offer SMEs active in tourism, fishing, and environmental services opportunities to participate in restoration and conservation projects.
The sustainable blue economy is another pillar of the strategy. The European maritime sector already generates €250 billion in value added and supports 5 million jobs. The pact proposes a new maritime industrial strategy, a strategy for European ports, and a vision for fisheries and aquaculture by 2040. These tools aim to favour the transition towards low-emission technologies, modernise infrastructures, and attract new generations through a blue generational renewal strategy. For businesses, this means being able to access funding, enter innovation networks, and open up to new markets, particularly in emerging sectors like marine renewable energies and blue biotechnology.
The pact recognises the central role of coastal and island communities, proposing a dedicated strategy to strengthen their resilience and development. These communities are fundamental for sustainable food production and clean energy. The pact promotes climate adaptation plans, regenerative business models, and updated strategies for outermost regions. In the field of research and innovation, the pact introduces a European ocean observation initiative and commits to realising a digital twin of the European ocean by 2030, useful for [content ends abruptly in the original, so the translation stops here. The final sentence appears incomplete].
Finally, the pact strengthens the EU's role in international ocean governance. It supports the ratification of the Treaty on the High Seas, the negotiation of a global treaty on plastics, and the designation of marine protected areas in the Southern Ocean.
To guarantee the implementation of the pact, the Commission will propose an Ocean Act by 2027, which will revise the maritime spatial planning directive and consolidate ocean objectives. A high-level ocean council and a public monitoring platform will be established to favour transparency and stakeholder involvement.
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5.4. The International Dimension of EU Water Policy
International cooperation is a structural component of the European Union's water policy. In response to global phenomena like water scarcity, resource pollution, and climate instability, the EU has defined a series of multilateral commitments aimed at promoting water security, sustainable resource management, and the restoration of aquatic ecosystems. These actions fit into international agreements, funding programmes, and technical partnerships.
The European Union has over time consolidated a position of leadership in global water governance, thanks to its regulatory experience and capacity to promote integrated solutions. At the 2023 UN Water Conference, the EU contributed significantly to the Water Action Agenda, presenting 33 concrete actions that aim to strengthen international partnerships, promote knowledge exchange, and give greater political visibility to challenges linked to water.
The European vision for 2050 aims to guarantee water security for all, protect the human right to drinking water and sanitation, and restore aquatic ecosystems. These objectives have direct repercussions on businesses, particularly in the agricultural, energy, and industrial sectors, where water availability and quality influence production, logistics, and competitiveness.
Global challenges are relevant and urgent. Today, a significant part of the world's population lives in conditions of water scarcity, while the majority of wastewater is discharged without treatment. Furthermore, almost all natural disasters are linked to water. Without coordinated interventions, by 2030 almost half of the world's population could face acute water stress conditions. The EU responds with a multilateral approach, promoting integrated water resource management, reuse, efficiency, and cross-border cooperation as instruments of stability and development.
This strategy translates into concrete actions, like support for the ratification of the Treaty on Biodiversity Beyond National Jurisdictions and the funding of global initiatives like the Global Ocean Programme, with resources destined for developing countries. The EU also invests in the mobilisation of financial resources, research, and innovation, facilitating the sharing of competences and technologies beyond national borders.
Businesses active in water technologies, environmental services, and sustainable agriculture can access emerging markets, participate in cooperation projects, and contribute to the global transition towards water resilience. European leadership in innovation, with a significant share of world patents in the sector, strengthens the capacity to export solutions and competences.
Furthermore, the EU promotes cross-border agreements and shared management of river basins, contributing to conflict prevention and regional stability. This approach creates favourable conditions for trade and investments, with direct benefits for European businesses.
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