The European Commission launches the Clean Industrial Deal to drive decarbonisation

The European Commission unveiled the Clean Industrial Deal on Wednesday, a strategic plan aimed at strengthening the competitiveness of European industries and accelerating their decarbonisation process. In the face of high energy costs and increasing global competition, the Clean Industrial Deal promises to provide certainty to companies and foster the transition towards a more sustainable and modern economy in the European Union. With an estimated investment of over €100 billion, the package seeks to transform key sectors, particularly those that are more energy-intensive, and promote clean technologies essential for Europe’s future growth.

The Clean Industrial Deal is presented as a comprehensive response to the challenges faced by European industries. In a global context marked by unfair competition and pressure on energy costs, Brussels stresses that decarbonisation must become a growth engine. The President of the European Commission, Ursula von der Leyen, stated that Europe is a continent of industrial innovation, but also of production, which must face the slowdown in demand for sustainable products and the outflow of investments to other regions. In this regard, the Clean Industrial Deal aims to reduce obstacles for European companies, “such as high energy prices and excessive regulatory burdens,” the Commission President emphasised.

This action plan is primarily structured around two interconnected sectors: energy-intensive industries and clean technologies. On one hand, high energy-consuming industries urgently need support to decarbonise and electrify. These industries, which face high costs and fierce global competition, will benefit from measures aimed at reducing their economic burden and improving their competitiveness. On the other hand, clean technologies, a key sector for the future, will be a central pillar of European reindustrialisation, with a focus on the circular economy and reducing dependence on third countries for critical materials.

Action plans for strategic sectors

Among the planned actions, the European Commission revealed that in the coming months it will present specific action plans for the automotive industry and the steel and metals sector, with the intention of adapting strategies to the particularities of each area. The Commission also committed to adopting a legislative package to accelerate the energy transition through electrification, the promotion of clean energy, and the creation of energy interconnections across Europe. The goal is for European industry to benefit from lower energy prices, which should improve its global competitiveness.

In addition to regulatory actions, the Clean Industrial Deal proposes measures to increase the demand for clean products made in Europe. One of the main initiatives will be the creation of a public procurement framework that prioritises sustainability, resilience, and European production criteria, starting in 2026. This includes the introduction of a carbon intensity labelling system for industrial products, starting with steel and cement, which will allow consumers to identify products with a lower carbon footprint and reward manufacturers for their decarbonisation efforts.

The plan also includes a series of financial measures to ensure the viability of the transition to a cleaner economy. In the short term, the Clean Industrial Deal will mobilise more than €100 billion, which will be allocated to the production of clean products within the EU. This amount includes additional guarantees of €1 billion under the current Multiannual Financial Framework. To facilitate financing for industrial decarbonisation, the European Commission will present a new state aid framework that will enable faster approval of aid for the implementation of renewable energy and the decarbonisation of industry.

Investment and financial support for clean industry

A significant portion of the funding will be allocated to strengthening the Innovation Fund programme (€6 billion in 2025) and to the creation of an Industrial Decarbonisation Bank, which aims to raise €100 billion for ecological transformation projects. The Commission will also modify the InvestEU regulation to increase its risk-bearing capacity, with the goal of mobilising up to an additional €50 billion in public and private investments. This measure seeks to foster investment in clean technologies, sustainable mobility, and waste reduction.

Before the review of the EU Emissions Trading System (ETS) Directive, planned for 2026, the Commission will launch a pilot project in 2025 with a €1 billion auction for the decarbonisation of key industrial processes across various sectors, supporting industrial decarbonisation and electrification. This initiative will combine existing resources from the Innovation Fund with the auction-as-a-service model.

As part of Horizon Europe, Brussels will also launch a flagship call with a budget of approximately €600 million, aimed at supporting projects ready for deployment.

Key measures for industrial transition

The Clean Industrial Deal also places a special emphasis on circularity and access to critical materials, which are essential for the industrial sector. The Commission has committed to establishing a mechanism for European companies to pool their demand for key materials and to create an EU Critical Materials Centre to facilitate joint procurement. This approach seeks to reduce dependence on unreliable suppliers and ensure access to the materials needed for the energy transition. Furthermore, work will be done on a Circular Economy Law, which will be adopted in 2026, aiming for 24% of materials to be circular by 2030.

At a global level, the EU will also seek to expand its network of reliable trade partners. In addition to the trade agreements already in place, the Commission will launch new clean trade and investment partnerships with the aim of diversifying supply chains and ensuring mutually beneficial agreements. To protect European industries from unfair competition and overcapacities, the Commission will strengthen its Carbon Border Adjustment Mechanism (CBAM), which will be simplified and reinforced.

The plan also includes measures to promote professional skills in key industries, with the aim of ensuring access to a qualified workforce capable of addressing the challenges of industrial transformation. The Commission will invest up to €90 million in the Erasmus+ programme to enhance the sectoral skills of the strategic industries related to the Clean Industrial Deal.