The European Commission has introduced the Clean Industrial Deal, a strategic initiative aimed at bolstering the competitiveness of European industries while accelerating the transition towards a decarbonised economy. With rising energy costs and increasing global competition, the plan seeks to provide much-needed support to industries facing significant economic and regulatory challenges.
Commission President Ursula von der Leyen emphasized the importance of the initiative, stating, “Europe is not only a continent of industrial innovation, but also a continent of industrial production. However, the demand for clean products has slowed down, and some investments have moved to other regions. We know that too many obstacles still stand in the way of our European companies from high energy prices to excessive regulatory burden. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”
A Business Plan for Industrial Transformation
The Clean Industrial Deal primarily focuses on two key sectors: energy-intensive industries and clean technology. Energy-intensive sectors require urgent measures to decarbonise and electrify in the face of high costs and global competition. Meanwhile, clean tech is central to Europe’s industrial future, driving competitiveness and reducing reliance on external raw materials.
The Commission is committed to reducing bureaucratic red tape while strengthening the entire value chain. The initiative includes industry-specific action plans, such as the forthcoming roadmap for the automotive sector in March and a strategy for the steel and metals industry in the spring. Similar measures will be developed for the chemical and clean tech industries.
Lowering Energy Costs and Boosting Clean Product Demand
One of the major pillars of the Clean Industrial Deal is reducing energy costs for industries. The newly adopted Action Plan on Affordable Energy aims to cut energy bills by accelerating the deployment of renewable energy, expanding grid infrastructure, and enhancing energy efficiency. By reducing reliance on imported fossil fuels, the EU seeks to create a more resilient and cost-effective energy market.
To stimulate demand for EU-produced clean goods, the Industrial Decarbonisation Accelerator Act will introduce sustainability and European preference criteria in public and private procurements. The plan also includes a voluntary carbon intensity label for industrial products, beginning with steel in 2025 and expanding to cement. These measures will provide transparency to consumers and allow manufacturers to benefit financially from their decarbonisation efforts.
Financing the Clean Transition
The Commission is committing over €100 billion in short-term financing to support clean manufacturing across Europe. This includes a new Clean Industrial Deal State Aid Framework, aimed at simplifying and expediting the approval of state aid for renewable energy and industrial decarbonisation projects. Additionally, the Innovation Fund will be strengthened to support clean tech and industrial transformation, with plans to create an Industrial Decarbonisation Bank targeting €100 billion in funding.
InvestEU, the EU’s investment program, will see amendments to increase its risk-bearing capacity, potentially mobilising an additional €50 billion in public and private investment for clean technologies and sustainable industries. The European Investment Bank (EIB) will also introduce new financing instruments, including a manufacturing package for grid components and a guarantee facility for clean tech under the Tech EU program.
Securing Critical Materials and Global Partnerships
Access to critical raw materials is crucial for Europe’s industrial resilience. To address supply chain vulnerabilities, the EU plans to establish a mechanism for companies to aggregate demand for key materials and create a Critical Raw Material Centre to facilitate joint purchasing. The Commission will also introduce a Circular Economy Act in 2026, setting a target for 24% of materials to be sourced through circular processes by 2030.
The EU is also ramping up efforts to protect industries from unfair global competition. Alongside new trade agreements, the Clean Trade and Investment Partnerships will focus on diversifying supply chains and securing favorable trade conditions. The Commission also plans to enhance the Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage and safeguard European industries from unfair competition.
Investing in Workforce Skills
Industrial transformation requires a skilled workforce. The Clean Industrial Deal prioritizes workforce development through a Union of Skills initiative, which will channel up to €90 million from Erasmus+ to support sectoral training for industries linked to clean manufacturing. By investing in skills, the EU aims to ensure that workers are equipped to thrive in the evolving industrial landscape.
As Europe strives for a competitive and sustainable future, the Clean Industrial Deal represents a comprehensive framework to drive industrial transformation, lower costs, and secure Europe’s place as a global leader in clean technology and manufacturing.
