On February 26, 2025, the European Commission unveiled the “Clean Industrial Deal,” an ambitious business framework aimed at enhancing the competitiveness and resilience of European industries. This initiative seeks to accelerate decarbonisation while ensuring the future of manufacturing within the EU. Against the backdrop of high energy costs and intense global competition, the Deal presents a comprehensive approach to drive industrial transformation through sustainable practices.
Addressing Industry Challenges and Securing Competitiveness
The Clean Industrial Deal acknowledges the critical challenges facing European industries—notably high energy prices, complex regulations, and fierce global competition. By positioning decarbonisation as a growth driver, the EU aims to provide businesses and investors with much-needed regulatory certainty and predictability. This commitment aligns with the EU’s broader objective to become a decarbonised economy by 2050.
European Commission President Ursula von der Leyen emphasized the urgency of removing barriers that hinder industrial growth. She highlighted the slowing demand for clean products and the relocation of investments to other regions as pressing concerns. The Deal aims to dismantle these obstacles by reducing bureaucratic burdens and fostering a business-friendly environment.
Key Pillars of the Clean Industrial Deal
The Clean Industrial Deal focuses on two interconnected sectors: energy-intensive industries and clean technology. These areas are vital for achieving decarbonisation and maintaining Europe’s industrial leadership.
- Energy-Intensive Industries: These sectors require urgent support to electrify operations and transition to low-carbon processes. High energy costs and regulatory complexities currently threaten their competitiveness.
- Clean Technology: Innovation in clean tech is central to future industrial competitiveness. The Deal promotes circular economy principles to reduce reliance on external suppliers for critical raw materials and to maximize resource efficiency.
To bolster these sectors, the Commission will introduce tailored action plans for key industries, including automotive, steel, chemicals, and clean tech.
Strategic Measures to Drive Industrial Transformation
- Lowering Energy Costs:
- The “Affordable Energy Action Plan” aims to reduce energy prices for businesses and households.
- Measures include accelerating renewable energy deployment, enhancing energy efficiency, and reducing dependence on imported fossil fuels.
- Boosting Demand for Clean Products:
- The “Industrial Decarbonisation Accelerator Act” will incentivize the consumption of EU-made clean products through sustainability and resilience criteria in public and private procurement.
- A voluntary carbon intensity label for industrial products will launch in 2025, starting with steel and later expanding to cement.
- Financing the Clean Transition:
- Over €100 billion will be mobilized to support clean manufacturing in the short term.
- A new “Clean Industrial Deal State Aid Framework” will streamline approval processes for renewable energy and industrial decarbonisation projects.
- The European Investment Bank (EIB) will provide targeted financial instruments, including guarantees for power purchase agreements and support for clean tech manufacturing.
- Enhancing Circularity and Securing Critical Raw Materials:
- An EU Critical Raw Material Centre will be established to aggregate demand and negotiate better prices.
- A “Circular Economy Act” in 2026 will accelerate circular practices and reduce dependency on third-country suppliers.
- Strengthening Global Partnerships:
- The EU will pursue “Clean Trade and Investment Partnerships” to diversify supply chains and protect against unfair competition.
- The Carbon Border Adjustment Mechanism (CBAM) will be streamlined to safeguard European industries.
- Investing in Workforce Development:
- The “Union of Skills” initiative will invest in workforce training and development, allocating up to €90 million from Erasmus+ to support strategic industries.
Implications for the Future of European Industry
The Clean Industrial Deal is not merely a response to current challenges but a long-term strategy to position Europe as a global leader in industrial innovation and sustainability. By integrating decarbonisation with industrial policy, the EU is setting a precedent for balancing economic growth with environmental responsibility.
For energy-intensive and clean tech industries, the Deal provides a clear framework to navigate the green transition while enhancing competitiveness. The financial mechanisms and regulatory reforms introduced will likely accelerate investments in clean energy and advanced manufacturing, fostering a robust and sustainable industrial ecosystem.
As the EU moves forward with sector-specific action plans and global trade initiatives, the Clean Industrial Deal is poised to reshape the industrial landscape. It signals a decisive shift towards a low-carbon economy, ensuring that European industries remain competitive and resilient in the face of evolving global dynamics.
Source: European Commission Official Website.
