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For a long time, the EU seemed to be racing towards regulatory overload, heedless of the cries of pain rising from the productive sector. However, 2026 could be the turning point, characterized by a ‘rewinding of the tape’ – geared towards simplification – that puts growth back at the center without leaving behind sustainability goals.

The ecological transition and its enemies: ideology and bureaucracy

In its Work Programme, the Commission has already indicated that it wants to renew its commitment to the environment, albeit with a medium to long-term perspective. Today, it finally seems clear: we must avoid regulatory constraints that – inspired by an ideological approach – would risk displacing businesses, weakening competitiveness, and unnecessarily restricting ordinary citizens’ consumption habits.

Of course, there is no shortage of ‘disruptive’ negative developments: just think of the ban on single-use plastic bags imposed by the Packing and Packaging Waste Regulation (PPWR), the latest example of EU invasiveness in the packaging sector with effects that are difficult to appreciate and will cause cost increases for operators in this sector. On the contrary, a ‘bright spot’ concerns the automotive sector, where an amendment to the European Climate Law has set a target for 2035 to reduce CO₂ emissions by 90% compared to 2021 levels, rather than by 100% (as in the previous version). For the remaining 10%, therefore, manufactures will be able to rely on internal combustion engines that use e-fuels or biofuels, a significant innovation that has also come about thanks to Italian political commitment.

Has geopolitical chaos awakened Europe?

It is now clear that the gravity of the international geopolitical situation requires Europe to ‘grow up’ and set aside its more naïve approach to environmental issues. There is a world increasingly dominated by the rivalry between the US and China, two superpowers that continue to grow (albeit at different rates and in different ways, it goes without saying). Above all, the US is the leading nation of the West that is inspiring reflection on the need for this part of the globe to free itself from the constraints that have, up to this point, held it back, allowing the BRICS countries – or at least the most ‘aggressive’ among them – to speak out.

The most obvious result of this focus on the international dimension is the CBAM regulation, which came into force on January 1^st. This ‘carbon duty’ is an attempt – with considerable room for improvement in its operational details – to prevent our higher sustainability standards from becoming an incentive to import from countries where the environment (and not only), is considered at best a factor of production, rather than a stakeholder to be considered. This is how the Single Market, founded on the promotion of free trade and the rejection of protectionism, comes to terms with reality. If we want to save globalization from those who would like to stop it and turn back the clock, fair trade must become common practice and remain part of the European Union’s strategic horizon.

How can deindustrialization be stopped? The reasons behind the ‘little ones’

Then there is the internal front of a social landscape in which the gap between the ‘center’ and the ‘periphery,’ between urban contexts and the provincial landscape, is becoming increasingly evident. There is an underlying ‘productive issue’: how can we enable all SMEs to thrive in a world that may be dominated by Big Tech but cannot afford to forget about craftmanship and ‘small industry’?

For the past year, the EU seems to have understood that it is necessary to make the existing rules work before thinking about new restrictions. The so-called ‘Omnibus package,’ announced on February 26, 2025, eased many of the burdens placed on an excessive number of entities whose role is, in fact, strategic for competitiveness. The goal – which is understandable – is to better select the target audience with a view to better regulation. This is the case with the Corporate Sustainability Reporting Directive (CSRD), which saw its first wave of application in 2025 based on 2024 data. However, the EU is still assessing its impact, including its transition through the corporate governance system, and important developments could be on the horizon this year.

This year’s main dossiers (barring any surprises)

Other measures are in the pipeline, and it is wise to be prepared for their implementation. For example, the directive on ‘sustainability due diligence’ (CSDDD) sets next summer as the deadline for transposition. Negotiations are also underway on how to make information (disclosure) on financial products more intuitive. Not only is this information extremely complex today, in the worst tradition of ‘regulatory overload’, but the attempt to summarize it has resulted in a crude green ‘labeling’ system – based on the articles of the relevant Regulation (SFDR) – reminiscent of the worst attempts in the agri-food sector.

The ESG regulations, which will come into effect in July are also of great importance. After all, a well-known study accuses these ‘judgements’ on the sustainability of companies – often calculated using approximate methodologies and interpreted with great superficiality – of being the result of ‘aggregate confusion’ and ultimately misleading those who should interpret them correctly, primarily investors.

Finally, other measures are also moving forward: the establishment of a Social Climate Fund to offset the adverse effects of the emissions trading system (ETS); the amendment of the regulation on deforestation, with the compliance deadline for major operators set for the end of 2026; and legislation against greenwashing, which is as long-awaited as it is controversial.

A changing paradigm and Italy’s merits

In short, the path seems clear: in 2026, the EU will focus more on market transparency, regulatory proportionality, and the quality of corporate information; it is less enamored with precise limits and strict thresholds; it seeks (at times) to give operators a ‘gentle push,’ refraining from imposing bans with the ease of the past. Even the method no longer seems as disruptive as before: in the face of protests from the categories concerned, Brussels has reopened some of the most controversial dossiers.

The Italian government has played a major role in bringing about this ‘paradigm shift.’ Moreover, the recent agreement with Germany to make the EU less cumbersome in its regulatory architecture, as well as more conducive to internal productivity and more assertive in international economic relations, is excellent news. This is another reason why 2026, despite being dominated by global instability and fragmentation, could hold some pleasant surprises for the Old Continent.

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