The Clean Industrial Deal seeks to provide long-term certainty for businesses, ensuring Europe remains on course to becoming a fully decarbonised economy by 2050, explains the EC. Its two-pillar strategy focuses on energy-intensive industries and clean technology. These sectors are deemed essential for reducing carbon emissions while bolstering European manufacturing competitiveness.

For energy-intensive industries, the EC has pledged support to address high energy prices, regulatory complexities and exposure to international market pressures. Measures will focus on electrification, renewable energy adoption and streamlined regulations to facilitate decarbonisation.

The clean tech sector, meanwhile, is identified as the cornerstone of Europe’s future industrial strategy. Circular economy principles are promoted to minimise resource dependency and foster European leadership in green innovation.  

Presenting measures ‘aimed at strengthening the entire value chain’, the Clean Industrial Deal ‘serves as a framework to tailor action in specific sectors’, according to the EC. Upcoming action plans for the automotive, steel and metals, chemical and clean tech industries will provide further sector-specific pathways for decarbonisation, it says.

Affordable energy and financing the green transition

Recognising the impact of energy costs on industrial competitiveness, the EC has adopted an Action Plan on Affordable Energy. This seeks to lower electricity prices through expanded renewable energy deployment, grid enhancement, electrification and improved energy efficiency. The EC expects it to drive down costs for industries and households by €45bn this year, rising to €130bn by 2030 and €260bn by 2040, while reducing dependence on imported fossil fuels.

Meanwhile, to spur demand for clean industrial products, an Industrial Decarbonisation Accelerator Act will introduce sustainability and ‘made in Europe’ criteria for procurement processes. A voluntary carbon intensity labelling system is also to be implemented, starting with steel in 2025, followed by cement, to enhance market incentives for low-carbon production. Carbon accounting methodologies are also to be simplified.

The EC expects the Clean Industrial Deal to mobilise over €100bn in clean manufacturing investments. Key financial mechanisms include a new Clean Industrial Deal State Aid Framework to fast-track public funding approvals, an expansion of the Innovation Fund, and the creation of an Industrial Decarbonisation Bank. Additional financing instruments will be introduced by the European Investment Bank to support grid infrastructure and power purchase agreements.

Circular economy and securing critical raw materials

A central element of the Clean Industrial Deal is securing access to critical raw materials that are vital for clean technology manufacturing. To address supply vulnerabilities, the EC is to establish a joint purchasing mechanism for European companies, alongside an EU Critical Raw Material Centre aimed at leveraging collective bargaining power.

A forthcoming Circular Economy Act, set for 2026, will establish new targets to increase material reuse and reduce reliance on third-country suppliers. The EC envisions at least 24% of materials used in EU industries to be sourced from circular processes by 2030.

Trade and workforce development

New Clean Trade and Investment Partnerships are to be established. These will diversify supply chains and protect industries from unfair competition through trade defence measures and an improved Carbon Border Adjustment Mechanism (CBAM). The latter is to be expanded to more sectors, downstream products and indirect emissions.  

The EC also plans a ‘Union of Skills’ initiative to develop domestic talent pipelines for the clean industrial transition. This will be backed by €90mn from the EU’s Erasmus+ programme for education and training.  

Mixed reactions

The Clean Industrial Deal met with mixed reaction from stakeholders across the energy sector and environmental groups.

The European Environmental Bureau (EEB) criticised the plan for prioritising energy-intensive industries at the expense of a broader green transition. ‘The so-called “Clean” Industrial Deal focuses on decarbonisation but overlooks broader pollution and environmental responsibility,’ said Christian Schaible, Head of Zero Pollution Industry at EEB.  

Meanwhile, although the emphasis on renewables and electrification was welcomed, some argued that the inclusion of nuclear and LNG infrastructure investments run counter to the goal of making energy more affordable. ‘Accelerating renewables, grids and flexibility will reduce costs drastically,’ said Luke Haywood, Head of Energy and Climate at EEB. ‘[However,] more effort is needed to reduce energy demand and ensure that renewable electricity and heat benefit the most vulnerable households. The inclusion of fossil gas infrastructure and nuclear energy are completely at odds with the plan’s stated objective: these energy sources will only make energy less affordable.’

SolarPower Europe also welcomed the focus on electrification but warned that financing remains a bottleneck. ‘The Clean Industrial Deal brilliantly sets electrification as a key pillar for industrial competitiveness and decarbonisation, including a new 32% electrification target by 2030. We see that as a floor, not a ceiling. There are plenty of energy uses that are low-hanging fruit to electrify.’ said CEO Walburga Hemetsberger. ‘However, dedicated financial support for electrification needs to materialise. The new Industrial Decarbonisation Bank risks pitching electrification against gas-dependent solutions that look good on paper but miss the irrefutable benefits of electrification. Flexible, renewable-based, electrification can reduce day-ahead energy prices by 25% by 2030. Investment in electrification must be prioritised over short-term fossil-based solutions.’

She also noted that getting the ‘upcoming Grids Package right’ would be ‘critical to the success of the competitiveness agenda’. But added that it actually needs to be a Grids and Storage Package as ‘battery storage is the absolute shortcut to lower, less-volatile energy prices’.  

Meanwhile, although supporting the prioritisation of green hydrogen for shipping and aviation in the Clean Industrial Deal, Faig Abbasov, green group Transport & Environment’s (T&E) Shipping Director, noted the ‘lack of essential details on how the EU is going to bridge the price gap between fossil fuels and green alternatives’. He called for additional long-term offtake commitments to ensure the competitiveness of hydrogen-derived fuels.

Another point of contention was the omission of binding 2040 climate targets, which had been expected to be included in the Clean Industrial Deal announcement. T&E said that the delay in setting an emissions reduction benchmark for 2040 sent ‘a worrying signal’ to investors and industries seeking long-term policy clarity.