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European Commission tables plan for a clean industrial sector

The Clean Industrial Deal is to strengthen the competitiveness of Europe’s economy and industrial sector. Decarbonisation is turning into an engine for growth. It comes with falling energy prices, good jobs and an optimised framework for businesses.

On 26 February 2025, the European Commission tabled key initiatives to strengthen the competitiveness of the EU as a place for doing business and for a successful green transformation. These initiatives are based on the competitiveness compass of 29 January and notably include the Clean Industrial Deal, an action plan for affordable energy and some initial packages of measures for cutting bureaucracy.

The European Green Deal has helped stabilise and lower energy prices in Europe after 2022. The record rate of expansion of newly installed solar and wind capacity is resulting in falling demand for gas, greater independence in the field of energy supply, and more climate- and environmentally-friendly energy generation. In 2023, there was a total of 56 gigawatts (GW) of new solar capacity and 16 GW of new wind capacity, whereas demand for gas fell by 18% compared to pre-crisis levels.

^{Bringing together climate action and competitiveness in a growth strategy}

The Clean Industrial Deal (CID), a holistic concept based on the Green Deal, is to bring together climate action and competitiveness within a horizontal growth strategy. The European industrial sector and especially the energy intensive industries are to play an important role in this. With an attractive framework and smart, targeted support, it can be an international forerunner in the field of research, development and manufacturing of clean and sustainable technology, which will also make a contribution to the EU climate targets. The CID comprises measures in six dimensions:

Affordable energy: The most important issues presented in detail in the Action Plan for Affordable Energy published along with the strategy are the acceleration of the expansion of renewables to 100 GW/a by 2030, the acceleration of electrification, and the completion of the internal energy market with physically interconnected grids.

(Green) lead markets: There are plans to introduce criteria for sustainability, resilience, and ‘Made in Europe’ in public-sector and private procurement, and the introduction of voluntary ‘green’ labels.

Investment/financing: The objective is to strengthen private and public investment.  Key points here include new State aid rules (the Clean Industrial Deal State Aid Framework (CIDSAF)); the creation of a decarbonisation bank, which is to mobilise funding worth €100 billion; a reform of the long-term financing programme InvestEU and the call for proposals for projects under the Horizon Europe EU research & innovation framework programme.

The circular economy: The focus here is on the establishment of an EU Critical Raw Materials Centre in 2026 tasked with joint procurement and strengthening cooperation in the field of strategic raw materials. 

External dimension/trade: New trade agreements and clean trade and investment partnerships are key to building a more competitive economy and more resilient supply chains. Also in the focus are trade-defence instruments (to the extent that these are necessary for levelling the playing field) and a streamlined, updated Carbon Border Adjustment Mechanism (CBAM).

Facilitating State-aid for renewables, the decarbonisation of the industrial sector and the manufacturing of clean technology (CIDSAF) are also important components of the Clean Industrial Deal.