From Innovation to Circularity: Mapping the Engines of EU Sustainability and Energy Transition

This study investigates how economic development interacts with sustainability performance in the European Union, focusing on the structural and technological factors that shape progress in the green transition. Using Eurostat data for 27 EU member states over the period 2015–2023, the analysis employs panel econometric models (Pooled Ordinary Least Squares, Fixed Effects, and Random Effects) to explore how circular economy performance, innovation capacity, human capital, and renewable energy use influence environmental and economic outcomes across member states. The results show that R&D intensity and skilled human resources are key drivers of sustainability. Higher levels of circular material use and resource productivity contribute to long-term competitiveness. In contrast, uneven progress in renewable energy deployment points to persistent regional disparities and possible structural constraints that limit convergence. Northern and Western Europe record the strongest advances in innovation and environmental efficiency, whereas Southern and Eastern regions remain affected by industrial legacies and lower absorptive capacity. The findings highlight that, in the short term, renewable energy expansion may involve adjustment costs and potential trade-offs with economic competitiveness in less technologically developed economies. This study provides new comparative evidence on the differentiated pathways of the green transition across the EU. Policy implications suggest the need to reinforce R&D investment, expand circular manufacturing, and support an inclusive technological transition consistent with the European Green Deal and the United Nations 2030 Agenda.