The European Commission adopts the new state aid framework for clean industry

The European Commission approuves last Wednesday a new public aid framework, known as the Clean Industrial State Aid Framework (CISAF), which will remain in force until the end of 2030 and will allow Member States to support with up to €350 million per project the manufacturing of clean technologies, industrial decarbonisation and the production of renewable energy. This instrument aims to curb the flight of strategic investments outside the European Union and to accelerate the transition towards a low-carbon industry through simpler and more predictable regulations for businesses.

The initiative, which forms part of the Clean Industrial Deal roadmap and replaces the Temporary Crisis and Transition Framework that had been in place since 2022, establishes new conditions that facilitate the deployment of energy and technology projects across five major areas: renewables and low-carbon fuels, electricity support for energy-intensive industries, transformation of industrial facilities, development of manufacturing capabilities, and reduction of financial risk in clean investments.

Among the main new features is the possibility of granting public aid without having to wait for lengthy community authorisation processes, provided that the investments comply with the framework’s content. “This is a direct competitive advantage for those ready to invest in Europe now,” emphasises José Alberto de la Parte, Director of Strategic Projects and Executive Committee member at Zabala Innovation. “CISAF is an invitation to commit to clean European industry with clear rules and defined timeframes,” he adds.

One of the central pillars of the approved mechanism is the promotion of the rapid deployment of renewable energies and low-emission fuels, such as green or blue hydrogen. To this end, Member States will be able to apply simplified support procedures, reduce the timeframes for permit processing, and adopt flexible measures for electricity grids that allow for the safe integration of intermittent sources such as solar or wind power.

Industrial shield

The framework also provides for the temporary reduction of electricity costs for industrial sectors that depend on high energy consumption. Companies benefiting from these measures must commit to investing in the decarbonisation of their processes. This condition seeks to ensure a balance between public support and the structural transformation of industries most exposed to international competition.

As for support for the manufacturing of clean technologies within European territory, CISAF opens the door to individual aid that could prevent large groups from relocating their investments. This flexibility will allow for intervention in specific cases that may be considered strategic from an industrial point of view. The range of technologies covered includes everything from photovoltaic modules to batteries, heat pumps or critical components defined in the Net-Zero Industry Act.

“The energy transition requires our own industrial strength, not just the consumption of foreign technologies,” says De la Parte, who believes that “the key lies in ensuring that Europe produces here what it needs to reduce emissions without increasing dependencies.”

In addition to reinforcing production capacity, the framework includes mechanisms to mitigate the risks associated with private investment in clean energy, infrastructure, or the circular economy. Aid may be structured in the form of equity, loans, or guarantees, particularly in the case of specific investment vehicles aimed at technological and energy development.

Local advantage

CISAF also establishes tax incentives, such as accelerated depreciation of investments, with the aim of stimulating demand for clean technologies within the internal community market. At the same time, it introduces a territorial approach that will allow less-developed regions to access more advantageous conditions to attract industrial projects. For this purpose, the regional aid maps in force in each country will be applied.

Another of the new features of the framework is the requirement for States to use procedures such as the funding gap assessment or competitive bidding processes to grant aid, in order to avoid market distortions and ensure fair competition among projects.

The new instrument will coexist with other European regulations, such as the Guidelines on State aid for climate, environmental protection and energy, or the General Block Exemption Regulation, which allows Member States to apply certain types of aid without prior authorisation.

For particularly relevant projects, Member States will be able to establish so-called Net-Zero Acceleration Valleys, where environmental assessment procedures will be partially handled by public administrations, thereby shortening approval times.

Growing autonomy

Brussels expects that, with the full implementation of CISAF, Europe will reach a level of 40% self-sufficiency in strategic technologies by 2030. The legal framework has already been shared with Member States and will enter into force immediately to facilitate the swift adoption of new national aid schemes.

“The predictability offered by this framework is one of its greatest strengths. Anyone with a viable project will know for certain what support exists, under what conditions and for how long,” highlights De la Parte.

The new framework – whose draft was presented in March and subjected to a consultation that concluded at the end of April – does not include direct budget allocations from Brussels. Instead, it enables States to mobilise national resources under a common regulatory framework. This structure is intended to accelerate decision-making at the local level, without losing control or coherence across the broader set of European industrial policies. It is expected that, under CISAF, up to €100 billion will be mobilised to support the manufacturing of clean technologies in the EU.