What can the EU energy sector do to meet it obligations and aspirations, what role can they play, and how ESG should be at the forefront of their business modelling.

There is little doubt that meeting the EU energy sector’s climate change and sustainability obligations and ambitions rest, in no small measure, on placing climate and sustainability at the forefront of corporate strategy and business modelling.

Already, the legal, financial and market signals in Europe make the transition central to commercial viability, with non-compliance risking stranded assets, higher capital costs, regulatory sanction and reputational damage.

To begin, it is worthwhile to look at the EU policy and market context, and why the EU is so important for the sector.

The EU has enshrined climate neutrality for 2050, and strengthened its 2030 ambition through the Fit-for-55 package and European Climate Law. These have been translated into concrete instruments such as the revised Renewable Energy Directive and the evolving electricity-market and permitting reform agenda.

The REPowerEU programme accelerates renewables, efficiency and electrification in order to reduce fossil-fuel dependence and increase energy security following recent geopolitical shocks.

The EU Emissions Trading System (EU ETS) remains the principal carbon price mechanism, which has been tightened and expanded in recent reforms. This is a material financial driver for power and industry decarbonisation.

Complementary finance and disclosure tools such as the EU Taxonomy and sustainable-finance rules, shape both capital access and investor expectations for energy companies.

These factors make the business case for putting climate at the core of business modelling a powerful one. Legal obligations, tightening carbon prices, permitting reforms and investor scrutiny are not only real risks, they are real-world drivers.

How then can the EU energy sector position itself to take advantage of the opportunities available, whilst meeting the necessary obligations and aspirations for the future health of the planet?

To answer this question, there are a number of practical, and high-impact levers that should be considered.

1. Re-orientation of capital allocation and strategy: Prioritisation of capital to low-carbon generation, storage and grid modernisation. This demands moving incremental capex away from new fossil-fuel supply towards renewables, flexibility, interconnectors and hard-to-abate solutions. Policy incentives, REPowerEU and rising ETS prices make this strategy financially rational.In addition, internal price and scenario stress-testing, including 1.5ºC-aligned scenarios, can be deployed when appraising projects in order to capture regulatory and market risk.
2. Streamlined permitting and project delivery: Streamlined permitting and ‘one-stop’ authorisation approaches, both nationally and at EU level, ensure renewables and transmission can be built at a pace the targets require. EU market reforms already emphasise faster permitting, with faster delivery reducing unit costs and system risks.
3. Investment in grids, flexibility and cross-border capacity: By accelerating grid reinforcements and digitalisation, energy companies can integrate variable renewables and avoid curtailment, aligning this with regional markets to optimise resources and assets across member states. Grid adequacy is an essential element for integration into national investment plans.
4. A focus on full system decarbonisation, utilizing electrification, hydrogen and efficiency improvements: Maximising electrification of heating, transport and industry will ensure the power sector is decarbonised at a pace that makes electrification meaningful.Regarding hydrogen and carbon capture and storage, it is important to be pragmatic, supporting programmes where lifecycle emissions are low and where economics and supply chains are credible.
5. Phasing out of fossil fuel subsidies and management of asset retirement: By supporting public and regulatory moves to remove fossil-fuel subsidies, the industry can adopt clear phase-out plans for coal and, over time, oil and gas where alternatives exist. Coupled with just-transition measures, this reduces market distortions and crystalises long-term demand forecasts.
6. Strengthening of corporate governance, disclosure and assurance: By embedding climate into core strategy, boards can own transition risk and credible decarbonisation milestones. Equally, by improving and independently assuring disclosures, it is easier to meet investor and regulatory expectations in a credible way. Transparent, third-party-assured planning also reduces the risk of greenwashing.
7. Facilitation of just transition and workforce planning: It is vital to plan for workforce re-skilling, regional economic adjustments and social dialogue. Public acceptance, and political feasibility, depend on credible socio-economic transition planning.
8. Mobilisation of finance for emerging markets and projects: By using blended finance, guarantees and public-private co-funding, companies can lower the cost of capital for large-scale renewables, storage and grid projects, especially in EU neighbourhood regions where strategic supply diversification is important.

It is clear to see that these are strong measures, with serious implications if handled incorrectly. There are also a number of potential barriers that prevent faster ambition achievement such as:

• Short-term commercial incentives and shareholder pressure
• Permitting, land-use and ‘NIMBYism’
• Technology and supply-chain bottlenecks
• Political resistance and energy security concerns
• Over-ambitious targets for deploying nascent technologies

Nevertheless, there are sound reasons why sustainability should be at the forefront of energy sector business modelling.

The EU is already codifying stricter targets. ETS is tightening, and taxonomy rules and reporting requirements are strengthening. This can mean that companies that ignore core issues may systematically under-price compliance cost and over-value fossil assets.

Investors are increasingly valuing Paris Agreement-aligned goals. Misaligned companies face potentially higher financing costs and lower access to capital. Public finance and private green capital are already preferentially directed at low-carbon projects.

There is also a very real stranded assets and litigation risk. Companies with large fossil-fuel-related portfolios risk forced early retirement of assets, impairment losses, and even legal challenges relating to inadequate transition planning.

Finally, there is market opportunity and competitiveness. Leading companies can capture market share in growing segments such as renewables, storage, electrification and green hydrogen (where appropriate), thereby creating new revenue streams and reducing exposure to increasingly volatile fossil markets.

As the EU policy framework tilts increasingly decisively towards decarbonisation, companies that place climate and sustainability at the core of business modelling will better manage risk, and gain access to growth opportunities.

The steps required demand coherent execution across firms, investors and policymakers.

Where ambitions are large, realistic and staged, performance-based support can prevent wasted investment and ensure the sector is placed on an achievable net-zero pathway.

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E-invoicing – Why it’s a critical consideration for multi-national businesses

E-invoicing is fast approaching implementation in the EU as part of the VIDA (VAT in the Digital Age) programme. VIDA is mandatory and requires all B2B transactions between EU-established businesses to adopt e-invoicing across the EU by 2030, with digital real-time reporting to tax authorities expected by 2035.

For 2026, our clients with establishments in France, Belgium, and Poland will need to act quickly as these countries begin implementation.

E-invoicing mandates differ across countries, from required data fields and submission formats to validation methods. While most will adopt Peppol-based formats, early adopters such as Italy continue to use alternative systems. Many organisations rely on large-scale ERP systems to manage their invoicing, and integrating e-invoicing into these environments is a significant undertaking.

Failure to comply with local e-invoicing mandates can lead to penalties, reputational risk, and operational delays.

E-Invoicing and VAT: What Global Businesses Need to Know

You’re invited to join our upcoming webinar focused on evolving e-invoicing and VAT compliance requirements across international markets, with a spotlight on the upcoming changes in Belgium, France, and Poland.

This session is tailored for businesses with overseas establishments, particularly those impacted by the increasing alignment between e-invoicing systems and VAT reporting obligations in Europe.

What to expect:

• A clear overview of e-invoicing and VAT mandates rolling out in the next 12 months
• Country-specific insights and implementation timelines
• Perspectives from our international colleagues on local compliance impacts
• Practical steps to prepare your business for e-reporting and VAT control requirements
• An introduction to technology solutions supporting operational readiness

Who should attend:

• Businesses with international operations, especially in Europe
• Professionals responsible for tax, finance, or compliance functions

Next steps:

Register today to secure your place and gain the insights you need to stay ahead of e-invoicing and VAT compliance changes!

We look forward to helping you navigate this evolving landscape and supporting your compliance journey.

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There are a number of implications.

Firstly, the more people who migrate to other countries, the more people will need to travel back to visit family and friends, and the more consequent travel will be required. This will be exacerbated by the fact that many migrants will be workers who do not have the luxury of time available to use other forms of transport.

Secondly, most airlines operate on a knife-edge, with slim margins and the last 15% of capacity representing profitability. Any reduction in airline passenger numbers will impact the profitability almost certainly to a degree that will make many airlines inviable, with a consequent impact on prices and a reduction in competition that could lead to a price spiral.

Thirdly, we have to look at whether there are any credible alternative forms of transport. Road, rail and sea travel are unlikely to be able to compete with air travel in terms of convenience, time or, indeed, cost (unless subsidised, for example in the case of current rail travel – a single journey from London to Edinburgh costs more than a return trip by air.

This is an enormous issue that the world currently seems to be ignoring, and in the UK government’s case it’s one that will be exacerbated as carbon credits are removed and stricter GHG emission targets are imposed, leading to the nightmare scenario of increased demand, reduced supply (airline closures due to unviability), reduced competition (leading to higher pricing), leading to travel inequality (the preserve of the wealthy) leading to civil unrest amongst migrants (for example) who are unable to afford to travel to see friends and family. And if the pat response is that these people can use technology to meet with friends and family virtually, think again. Like rail and sea are to aviation, so too, face-to-face versus digital engagement simply doesn’t compare.

Published by Mark Lumsdon-Taylor, Executive Development & Sustainability Lead

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This appointment underscores Baker Tilly Cyprus’s commitment to delivering high-quality audit and assurance services, supporting transparency, governance, and regulatory compliance in the banking sector.

Commenting on the appointment, Marios Klitou, Regional CEO at Baker Tilly SEE, stated:

“We are honored to receive this mandate from AstroBank. This appointment reflects the trust placed in our team’s expertise, integrity, and dedication to delivering excellence in auditing services for the banking sector.”

As part of its extensive engagement in the financial services industry, Baker Tilly Cyprus is also the appointed auditor of several key banking institutions in Cyprus, demonstrating its strategic role in supporting the stability and credibility of the local banking sector. These include the Housing Finance Corporation, the Central Bank of Cyprus, which supervises and regulates the banking system, and the Cyprus branch of the Central Cooperative Bank of Bulgaria.

Baker Tilly has established itself as a leading provider of audit, assurance, and advisory services for banking and financial institutions across South East Europe. Beyond Cyprus, the firm acts as statutory auditor for key banks throughout the region. In Romania, its clients include Techventures Bank, Creditcoop Bank, and BRCI, while in Moldova it serves CB Eurocreditbank SA. In Bulgaria, Baker Tilly audits major institutions such as UniCredit Bulbank AD, Eurobank Bulgaria AD, ProCredit Bank (Bulgaria) EAD, and D Commerce Bank AD.

About Baker Tilly

Baker Tilly Cyprus is part of Baker Tilly South East Europe, which is a member of Baker Tilly International, one of the world’s ten largest professional services networks worldwide.

Its regional presence is reinforced by the global reach of the Baker Tilly network, encompassing over 120 independent firms operating across four continents.

As a subsidiary of MHA, listed on the London Stock Exchange’s AIM market, Baker Tilly is part of a network of over 2,400 professionals with annual revenues exceeding €225 million. This scale underscores the firm’s growing international presence and demonstrates its capability to deliver services of the highest caliber, combining local expertise with international standards tailored to client needs.

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We’re excited to announce the launch of our interactive E-Invoicing Navigator, designed to provide you with up-to-date e-invoicing compliance information across key jurisdictions.

• Ongoing updates
• User-friendly interface
• Cross-jurisdictional resource

Stay ahead of regulatory changes and ensure your business is always compliant, without the hassle! Whether you’re in the EU or beyond, this tool is here to help you simplify your VAT and e-invoicing journey.

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A Strategic Move with Long-Term Vision

The merger, first announced last May, is part of a broader strategic plan aimed at strengthening Baker Tilly South East Europe’s market position and expanding its portfolio of high-value services for clients and partners both locally and internationally.

The new entity brings together 2,400 professionals across the network, generating combined revenues exceeding €225 million.

Access to New Resources and Expertise

By joining a global network, the firm gains access to advanced resources in technology, training, and human capital development. This move reinforces the company’s commitment to international growth and its promise to deliver comprehensive, high-level solutions and services to clients worldwide.

Bold Leadership and Continued Expansion

Baker Tilly South East Europe becomes the first firm to merge with a group holding a solid presence on the London Stock Exchange—setting new standards across the world’s top five financial markets. This strategic move sends a strong signal of growth and expansion, rapidly enhancing the company’s footprint in critical sectors of the global economy, including audit, tax, advisory, legal, and corporate services.

A New Era of Growth

BTSEE CEO Marios A. Klitou, highlighted the significance of the merger:
“With the completion of this merger, Baker Tilly South East Europe enters a new era. We remain committed to creating value for our clients, investing in our people, and pursuing strategic growth at both regional and international levels. Very soon, we will be making further announcements regarding the expansion of our services and physical presence in Cyprus and Greece.”

MHA CEO Rakesh Shaunak stated:
“As we highlighted during our recent listing on the stock exchange, strategic partnerships form a central pillar of our medium-term growth strategy. The completion of the merger with Baker Tilly South East Europe is a pivotal step in strengthening MHA’s presence in continental Europe. I am delighted to welcome our new colleagues to the MHA family.”

Laying the Foundations for the Future

This strategic step solidifies Baker Tilly South East Europe’s position in leading markets and paves the way for future growth. The agreement sets the foundation for ongoing development and the expansion of high-value services on an international scale.

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