This article is an opinion piece by current students or alumni of the College of Europe. The views expressed are those of the authors and do not necessarily reflect the opinions or positions of the College of Europe. Responsibility for the content lies solely with the authors.

By Giulia Galletti, Marie Taeymans, and Diego Bettas-Begalin

Key takeaways

On 19 March 2026, the College of Europe Competition Society was delighted to welcome Martín Martínez Navarro, Member of the Legal Service of the European Commission*, for a guest lecture on the interaction between competition law and sustainability.

* Martín Martínez Navarro was invited and delivered his insights in a purely personal and academic capacity; under no circumstances can his opinions be regarded as reflecting those of the European Commission.

Introduction

The primary objective of EU competition law has been traditionally to promote effective competition and thus maximise consumer welfare in a broad sense, while distancing itself from the narrower approach classically associated with the Chicago School. The underlying premiss is that a competitive market economy is regarded as the most effective mechanism for the optimal allocation of limited resources. At the same time, however, negative externalities, such as pollution and the effects of climate change, are acknowledged, and these require public intervention through regulatory action and incentive-based measures. In this context, the question arises as to what role competition policy can play in addressing such externalities. 

Sustainability as a goal of competition law

It must be acknowledged that there are difficulties but also arguments in favour of the inclusion of sustainability objectives within competition law. 

As regards the challenges, it may be argued that non-economic factors do not fit easily within the economic analysis of efficiency and consumer welfare considerations that are typical of modern competition law. This is why some consider that competition law must exclusively encompass microeconomic assessments, excluding any macroeconomic or policy-related considerations. The proponents of this view will likely emphasise that the vigorous enforcement of the competition rules is the best manner to promote innovation, also in relation to sustainability. Moreover, it may be argued that there is a risk that sustainability justifications become a vehicle for “greenwashing”, i.e. allowing undertakings to engage in anticompetitive conduct under the cover of environmental virtue. 

In contrast, others may argue that it should be possible to incorporate sustainability considerations into competition policy, both as a goal and also in the application of the rules and in the economic assessment. They could add that the decision not to incorporate sustainability objectives into competition law is not politically neutral and reflects, in itself, a political choice. Moreover, in some markets, where there is limited competition (for instance because there is market power), there are accordingly limited incentives to innovate, including in relation to sustainability. Furthermore, although “greenwashing” is a genuine concern, it should be possible to avoid that with an adequately designed analytical framework. In sum, a broader interpretation of the concept of consumer welfare, capable of encompassing green concerns, is in principle entirely defensible, although the practical and legal difficulties of incorporating non-economic factors in the assessment of anti-competitive practices should not be underestimated. 

Overall, competition law may not be the silver bullet in the fight against climate change, but it is submitted that it can nevertheless be used as an additional tool among the various instruments available to public authorities.

For the purposes of the application of competition law, sustainability considerations can be used both as a “shield” and as a “sword”. First, as a “shield”, sustainability considerations may be advanced as a defence by undertakings in order to ensure that the enforcement of competition law does not hinder conduct aimed at achieving sustainability objectives. Second, as a “sword”, sustainability considerations can be relied on to deter and sanction behaviour that is anticompetitive and undermines sustainability objectives. The latter approach implies that competition law be designed to activelycontribute to sustainability by integrating such considerations. 

Sustainability considerations and Article 101 TFEU

• The “sword”

Horizontal agreements which restrict “green” innovation are uncontroversially prohibited (“sustainability cartels” or environmental collusion). Moreover, competition law should also prohibit anti-competitive agreements which, on the pretext of pursuing environmental objectives, merely restrict competition (“greenwashing”). A paradigmatic example of the first scenario is the AdBlue cartel case, in which major car manufacturers coordinated on emission technology standards and agreed not to exceed the legally required environmental thresholds, thereby deliberately limiting “green” innovation. 

From an enforcement perspective, such agreements do not differ from traditional cartels; they merely exhibit a “green flavour”. The principle that they should be prohibited by competition law is unobjectionable. The main issues are operational. First, the fact that there are relatively few examples of such cartels in the Commission’s decisional practice raises the question as to how such cartels can be detected. At present, detection relies on the existing conventional tools, namely leniency programmes, without prejudice to the possibility to carry out ex officio investigations in critical sectors. Second, the need to ensure vigorous enforcement against “green cartels” should not deter legitimate cooperation among undertakings pursuing sustainability objectives. For that reason, the Commission adopted in 2023 its Guidelines on Horizontal Cooperation Agreements, which contain useful orientations in that regard, without prejudice to the possibility of seeking informal guidance in relation to novel questions (see Commission Notice on informal guidance relating to novel or unresolved questions concerning Articles 101 and 102 of the Treaty on the Functioning of the European Union that arise in individual cases).

• The “shield”

Sustainability may serve as a justification for agreements that would otherwise fall within the scope of Article 101(1) TFEU. This is particularly relevant where undertakings collectively agree to exceed mandatory environmental standards. While such coordination may prima facie restrict competition, it also generates benefits, as consumers may be willing to pay a premium for more sustainable products. An important concern in this type of situation is the so-called “first-mover disadvantage”: firms that unilaterally adopt higher environmental standards may incur higher costs. Collective action may mitigate or even eliminate this risk and ensure a level playing field. 

One delicate issue in this context is how to deal with “out-of-market” efficiencies. More precisely, should benefits accruing to society at large, rather than to consumers in the relevant market, be taken into account? Two competing approaches appear to emerge. While a number of competition authorities appear to adopt a relatively strict stance aimed at preventing greenwashing (i.e. allowing companies to increase prices while achieving only modest sustainability benefits), other competition authorities (e.g. the Netherlands and the United Kingdom) have endorsed a more flexible interpretation seeking to take into account environmental benefits for society as a whole, beyond customers in the relevant market. 

At the EU level, although there are few examples in the Commission’s decisional practice yet, the Horizontal Guidelines recognise that climate change, pollution and limiting the use of natural resources may be valid sustainability concerns for an exemption under Article 101(3) TFEU. However, the conditions for such an exemption are strict: (i) efficiencies must be objective, concrete and verifiable; (ii) the restriction of competition must be indispensable; (iii) consumers must receive benefits that outweigh negative effects; and (iv) competition must not be eliminated. The most demanding requirement concerns the “pass-on” to consumers under (iii) above. The Guidelines distinguish between three categories of benefits: first, “classic” cost-efficiencies (e.g. cheaper products or lower energy/water consumption); second, indirect benefits, which are benefits perceived by consumers who are willing to pay more for sustainable products; and, third, collective benefits. The latter require a substantial overlap between the consumers affected by the restriction and those benefiting from the sustainability gains. Moreover, the benefits must outweigh the negative effects for consumers in the relevant market. Although this approach can understandably be explained by a legitimate concern, namely avoiding “greenwashing”, one may wonder whether the benefits for EU citizens (who are not consumers of the relevant product) are sufficiently taken into account. Furthermore, it is also doubtful to what extent non-EU sustainability concerns may be taken into consideration under this approach (e.g. an agreement among EU industry producers to stop obtaining supplies from logging companies in Amazonia in view of increasing deforestation). 

Sustainability considerations and Article 102 TFEU

• The “sword”

Given the absence of an exhaustive list of abuses in Article 102 TFEU, nothing prevents as a matter of principle the emergence of a “green” theory of harm, whereby environmentally harmful conduct by a dominant firm constitutes an abuse. Although this approach remains untested as a matter of EU law, it could be anchored in the “special responsibility” incumbent upon dominant firms. Moreover, it should be recalled that in Case C-252/21Meta v Bundeskartellamt concerning the EU data protection rules, the Court of Justice suggested that infringements of non-competition rules may be relevant in establishing an abuse of dominance. Thus, it could be submitted that this precedent may open the door, by analogy, to integrating environmental considerations into Article 102 TFEU.

A number of theories of harm might conceivably be envisaged. First, a dominant firm’s breach of environmental legislation could be characterised as an exploitative abuse (on the basis of a broader conception of consumer harm that encompasses environmental damage) by analogy with the Meta case or even as an exclusionary abuse (where non-compliance leads to the foreclosure of competitors who respect the sustainability legislation). Second, another type of exploitative abuse could be identified where a dominant firm is deemed to charge a price which is too low because it is not factoring in the cost of negative externalities, i.e. the cost of damaging the environment. Admittedly, such a “creative” approach would require a significant reconceptualization of exploitative abuses to accept that exploitation and consumer harm derive not only from pricing but also from environmental harm (akin to an “out-of-market” inefficiency). A third, even more creative option would be to consider that a dominant, by behaving as such (which typically has limited incentives to innovate), reduces the level of sustainability below that which would have prevailed under competitive market conditions. This last approach, however, may raise significant questions as dominance in itself cannot constitute an abuse and it may be particularly difficult to establish the counterfactual scenario. 

Finally, a more conventional type of exclusionary abuse may be that where a dominant firm prevents entry or forecloses more sustainable rivals (for instance by means of predatory pricing).

• The “shield”

Although there are no concrete examples in the decisional practice or in the case-law yet, a sustainability defence clearly is also conceivable under Article 102 TFEU, under similar principles to those outlined above regarding Article 101 TFEU. The possibility to invoke such justification is also subject to similar challenges, particularly with regard to the debate on “out-of-market” efficiencies. It is expected that the future Guidelines on Exclusionary Abuses under Article 102 TFEU (currently in preparation) will provide additional guidance in this regard.

Sustainability in mergers

It is important to recall that, while the Commission is in the driving seat when it comes to the enforcement of Articles 101/102 TFEU, in the context of merger control the Commission does not choose which mergers that are notified by the parties. However, the Commission decides how it assesses the notified mergers, including in particular how it takes into account sustainability considerations in its assessment of their proposed transaction.

• The “sword”

Although the author is not aware of any such precedent to date, it is uncontroversial that certain mergers may reduce “green” innovation competition (i.e. non-price competition) and that competition authorities should prevent this from happening. Leaving that aside, it is uncertain whether a “green” theory of harm based on the negative environmental impact of a given activity should be developed (for instance, should a merger in the oil sector lead to increased scrutiny in and of itself and even be prohibited unless the merging parties demonstrate substantiated sustainability efficiencies?). Such a possible approach raises significant legal challenges and remains currently untested. 

• The “shield”

Similarly to the considerations set out above in relation to Articles 101 and 102 TFEU, nothing prevents in principle taking into account sustainability considerations in the context of the alleged efficiencies brought about by mergers. The draft Merger Guidelines published for consultation on 30th April 2026 provide useful clarifications as to whether, and to what extent, sustainability considerations (which may constitute both direct and dynamic efficiencies) may lead to the clearance of otherwise problematic concentrations. In any event, such sustainability benefits must be verifiable and merger-specific. It should be observed that the approach on “out-of-market” sustainability efficiencies appears to be in line with the considerations set out above regarding Article 101(3) TFEU and efficiency defences under Article 102 TFEU.

Concluding remarks: Towards ”greener” competition law?

Sustainability and competition law is a relatively recent couple, and it still is in its early stages in relation to many of the issues outlined above.

However, as regards the question as to whether EU competition law is evolving towards a “greener” paradigm, the author submits that there are already indications that this may be the case, even though some of the propositions considered above remain untested both in the decisional practice and in the case-law.  

Perhaps unsurprisingly, Executive Vice-President of the Commission Teresa Ribera has publicly stated on several occasions (including during her conference at the College of Europe on 23 February 2026) a willingness to rethink competition policy in support of green objectives. Accordingly, the author expects – and hopes – that this trend towards a “greener” EU competition policy will continue in the future. Should the Commission and other competition authorities decide to make vigorous use of the sustainability “sword” in anti-trust, one should expect private parties contributing to the “greening” of competition policy through litigation at national level (for instance, by suing companies for damages resulting from “green” anti-trust breaches).

Notwithstanding the foregoing, developments on the other side of the Atlantic should not be ignored. In particular, it is worth recalling that the current US administration is currently suing a number of asset managers (BlackRock, Vanguard, etc) involved in what the US regards as a “climate cartel” (namely a commitment in their capacity as shareholders of coal companies aimed at reducing coal production and thus CO2 emissions). Irrespective of the outcome of this litigation, such proceedings are likely to have a chilling effect on similar initiatives in Europe, as global firms operating on both sides of the Atlantic may face conflicting legal regimes, which may lead rational actors towards sustainability inaction as a result of the neutralising clash between the “Brussels effect” and the “Washington effect”.

About the Authors 

Martín MARTÍNEZ NAVARRO

Martín Martínez Navarro is a Member of the European Commission’s Legal Service (competition team). Previously, he worked as a law clerk (référendaire) at the General Court and the Court of Justice of the EU (2014-2024). He started his career as a lawyer specialising in EU competition law at a Brussels-based law firm.

Martín Martínez Navarro is Visiting Professor at the College of Europe, SciencesPo Paris and Université Libre de Bruxelles in EU competition law and the law of the internal market.

He is the author of various publications on litigation matters, EU competition law, the internal market, the European Ombudsman and EU institutional issues. He is a member of the Madrid Bar and Secretary of the “Academia de Práctica Jurídica Europea”.

Giulia GALLETTI

Giulia Galletti is an LL.M. candidate in European Legal Studies at the College of Europe. She holds a Master's degree in Law from the University of Bologna and an LL.M. from King’s College London, and has been admitted to the Italian Bar. 

She previously trained at an international law firm and completed a Blue Book traineeship at the European Commission (DG COMP). Her research interests include Competition Law and Economics, Financial Services, and International Trade. 

She currently serves as President of the Competition Society at the College of Europe.

Marie TAEYMANS 

Marie Taeymans is an LL.M. Candidate in European Legal Studies at the College of Europe. She holds a Master’s degree in Law from Bocconi University and is currently pursuing qualification for admission to the Italian Bar. 

She previously worked as legal counsel to detainees in an Italian prison and completed a traineeship at the European Commission (DG Competition). Her research interests include Competition Law, European Social Law and Constitutional Law.  

She currently serves as Board Member of the Competition Society at the College of Europe.

Diego BETTAS-BEGALIN

Diego Bettas-Begalin is an LL.M. candidate at the College of Europe, while completing his professional training at the Paris Bar School (EFB Paris). He holds a Master’s degree in European Business and Competition Law from Panthéon-Assas University, and a Diploma in Legal Studies from the University of Oxford. He has also completed several traineeships at international law firms.  

His professional and academic interests include the contemporary evolution of theories of harm in EU competition law, with a particular focus on unilateral conduct and the interface between competition enforcement, regulation, and innovation. 

He is currently a member of the Competition Society at the College of Europe.