The Clean Industrial Deal is out: here is what you need to know
Europe unveiled the Clean Industrial Deal, a €100 billion plan to revive the bloc manufacturing sector.
Published on February 26, 2025
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Made-in-EU quotas, affordable energy, and overhauled electricity markets are some of the tenets presented today in the European Commission Clean Industrial Deal (CID). The €100 billion plan aims to revive the European industry and enhance its competitiveness against China and America by investing in renewables and stimulating internal demand.
Linking energy-intensive industries and cleantech, the strategy identifies six key factors named “business drivers.” These are affordable energy, lead markets, financing, circularity and access to materials, global markets and international partnerships, and skills.
European Commission President Ursula von der Leyen stated: “We know that too many obstacles still stand in the way of our European companies from high energy prices to excessive regulatory burden. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”
Energy: the Clean Industrial Deal priority
Since the Russian invasion of Ukraine three years ago, the EU has been grappling with a severe energy crisis. In response to the conflict, the bloc has been working to cut its Russian gas imports while investing in renewables. European manufacturers have been lamenting the high energy costs, undermining their competitiveness against Chinese and American companies.
The CID proposes three actions to lower power costs: lowering energy bills, accelerating the rollout of clean energy and electrification, and ensuring well-functioning gas markets.
To cut bill costs, the Commission is launching a €500 million pilot program for corporate Power Purchase Agreements (PPAs) with the European Investment Bank (EIB), aiming to derisk PPA offtake. The EIB will also launch a grids manufacturing package, worth €1.5 billion. The Commission promises to simplify state aid rules by July “to push the rollout of clean energy, deploy industrial decarbonization, and ensure sufficient capacity of clean tech manufacturing in Europe.”
The plan underlines the need to cut permitting times for deploying grid, energy storage, and renewable projects to speed up the rollout of clean energy and manufacturing. To this extent, measures to address bottlenecks will come in the upcoming Decarbonization Accelerator Act.
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Stimulating demand
At the same time, the Clean Industrial Deal calls for action on public procurement policies to benefit sustainability, decarbonization, and competitiveness goals. In doing so, it will set European preference criteria. In addition, product labeling for industrial products, together with the right incentives, is seen as a “powerful tool to speed up the transition to decarbonized manufacturing.”
While the CID does not include any action on nuclear power, it announces it will adopt a delegated act on low-carbon hydrogen. This measure will set up a framework and clarify rules for hydrogen production, providing certainty to investors.
Access to finance
The paper acknowledges the EU industry need to access capital and says the CID will mobilize over €100 billion to improve the business case for EU-made clean manufacturing, including an additional €1 billion in guarantees under the current multi-annual financial framework. Therefore, the Commission plans to act to strengthen EU-level funding, leverage private investment, and enhance the effectiveness of state aid support.
In addition to the Innovation Fund announced in the Competitiveness Compass, the Commission will propose an Industrial Decarbonization Bank. This action aims for €100 billion in funding, based on money from the innovation fund, revenues from the emission trading scheme (ETS), and the revision of InvestEU.
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Circular economy and trade measures
The Commission will also prioritize the implementation of a Critical Raw Materials Act in an effort to reduce dependency on third-party countries for sourcing key materials for the energy transition, such as lithium. A new circular economy act will be published next year to set a framework of action to boost circularity approaches.
The plan also addresses international trade concerns. The EU maintains its stance on using anti-dumping and anti-subsidy duties, particularly targeting cheap imports of green technologies from China. This approach follows former Italian Premier Mario Draghi's recommendations on EU competitiveness.
A significant development in the timeline includes a dedicated strategy for the automotive sector scheduled for March 5, followed by a steel sector plan later in March. The chemicals sector will receive attention through a comprehensive package planned for late 2025.