The EU launches its Clean Industrial Deal and affordable energy action plan aimed at boosting clean tech and competitiveness

The European Commission launched plans on Wednesday aimed at making Europe the place of choice for clean tech companies and investors.

“The world is changing, so are markets and so must we,” said commission executive vice-president for a clean, just and competitive transition Teresa Ribera, explaining the EU’s rationale behind today’s Clean Industrial Deal.

Her colleague, executive vice-president for prosperity and industrial strategy Stéphane Séjourné, said that in the face of “some wanting to impose their model”, the EU needed to impose its model of “reindustrialisation and decarbonisation”.

“This is not just an environmental question, but also a growth strategy and a security imperative,” insisted Séjourné.

With this in mind, the Clean Industrial Deal goes hand in hand with the “omnibus” package aimed at simplifying EU sustainable finance reporting and due diligence rules, also published today by the commission, suggested Séjourné. The simplification texts show the “EU knows how to reform without using a chainsaw”, but with “competent men and women” making decisions, he told journalists. “Simplification does not put into question decarbonisation.”

The Clean Industrial Deal is focused on boosting clean tech, while helping energy-intensive sectors to decarbonise, promoting circular economy business models and reducing the EU’s dependence on raw material inputs from outside its borders.

Joint purchasing power

Last year’s Draghi competitiveness report said a €800bn-a-year spending boost was needed to end economic stagnation in the EU. The Clean Industrial Deal aims to find some of this missing cash, planning in the short term to mobilise more than €100bn to support EU-made clean manufacturing. This figure includes an additional €1bn in guarantees under the existing multiannual EU budget.

Further down the line, the commission says it plans to adopt a new state aid framework to speed up support for renewables, industrial decarbonisation and clean tech. It is also proposing the creation of an €100bn Industrial Decarbonisation Bank, funded by the Innovation Fund, Emissions Trading System revenues and changes to the InvestEU programme, also launched today as part of the simplification proposals.

As part of the push to increase energy infrastructure financing, the European Investment Bank will launch a series of instruments. These will include a grids manufacturing package and a de-risking counter-guarantees programme to encourage power purchase agreements, long-term contracts between electricity generators and customers, such as utilities.

The EU also hopes to grow its domestic clean tech industries by introducing non-financial criteria, such as “made in Europe”, into public and private procurements. And the commission has plans to launch a voluntary carbon intensity label for industrial products, starting with steel in 2025, followed by cement. The labels will allow manufacturers to reap a premium on their decarbonisation efforts, says the EU executive.

Likewise, the commission wants to encourage European companies to jointly purchase raw materials to reduce costs. Séjourné likened it to clubbing together to buy Covid vaccines during the pandemic. In 2026, the EU executive will also adopt a Circular Economy Act to reduce global dependencies, and plans to create a series of clean trade and investment partnerships with countries outside Europe.

In conjunction with the launch of the Clean Industrial Deal, the EU executive published an action plan on affordable energy aimed at lowering energy costs for industry and consumers. The plan outlines the need to accelerate investments in clean energy and infrastructure, to speed up permitting and to “engage with reliable [liquefied natural gas] suppliers to identify additional cost-competitive imports”.

The only way forward

Clean energy experts were largely appreciative of the commission’s efforts.

Senior fellow at think-tank Bruegel Simone Tagliapietra welcomed the plan, saying decarbonisation was the “only structural way” Europe can “reduce its energy costs and increase its energy security in an increasingly volatile international context”.

Kristian Ruby, secretary-general of industry group Eurelectric, said: “Europe’s ability to compete, power and defend itself is becoming an absolute imperative given the unprecedented geopolitical developments. The Clean Industrial Deal is a first step in the right direction with its emphasis on electrification, simplification and demand-side stimulation.”

Cleantech for Europe director Victor van Hoorn described the strategy as “a strong investment signal for European clean tech scale-ups” that strengthens the business case for clean tech, gives a demand boost and unlocks de-risking tools to mobilise private capital”.

“Now, it’s time to rapidly implement these tools and get on with large-scale deployment across Europe,” said Van Hoorn.  

Amber Woodward, international public affairs lead at the Centre for Net Zero, said if the EU is to reach its aim of electrifying 32 per cent of its economy by 2030, “how and when we use renewables will become as important as building them”, and welcomed the guidance in the strategy on incentivising flexibility.

“Adding 100 gigawatts of green generation is the goal, but households and industry will need to be more flexible in their consumption,” she said. “We need a market that offers people cheap energy when we’re generating lots of clean electricity, and incentivising consumers and commercial sectors to shift demand to times when solar and wind production is high will drive down energy costs and support the grid. 

“As Europe seeks to address its lengthy queues for grid connections, demand flexibility will also reduce the need for costly infrastructure requirements,” Woodward added.

Mirella Vitale, senior vice-president of the Danish multinational Rockwool Group, said her company is “pleased to see the focus on helping companies with proven decarbonisation technologies accelerate their investments”.

She added: “We’ve been pushing for things like better grid connections, simplified permitting procedures for new factories, and procurement policies that reward recyclable products, and so it’s encouraging to see these included. The priority now is to turn these proposals into concrete actions.”

Meanwhile, Eurochambres president Vladimír Dlouhý, alluding also to the simplification package, said: “The Green Deal was not the growth strategy that it purported to be, and was based on the misconception that the EU can regulate its way to net zero. On the surface, the Clean Industrial Deal consolidates better the climate response with competitiveness.”

Hidden motives

Environmental campaigners were, however, less inspired by the proposals.

“Europe’s industry needs a compass to steer by for the long term, not a sticking plaster,” said Camille Maury, senior policy officer, decarbonisation of industry at WWF EU. “The true strength and competitiveness of EU industry lies in rapid decarbonisation, targeted investments and the scale-up of clean technologies in a fair manner, not from spreading resources thinly across all technologies or opting for temporary fixes. Today’s proposal is a step forward, but it falls short of setting a bold vision for Europe’s industrial transformation.”

Climate Action Network Europe head of energy Cornelia Maarfield rued the lack of focus on reducing energy and fossil fuel demand and consumption. “The cheapest energy is the energy we don’t use, yet there is only a weak commitment to energy efficiency,” she said.

“Outright counterproductive are proposals to support expensive nuclear energy and foreign LNG export infrastructure, increasing our reliance on fossil gas — the very driver of the energy price crisis. A swift and decisive phase out of fossil gas is the only way to bring down prices, both for businesses and for families struggling to pay their energy bills,” Maarfield added. 

Laurie van der Burg, global public finance programme manager at Oil Change International, also focused on the EU’s inclusion on LNG in its energy plans, accusing the bloc of “bowing to pressure from the Trump administration and lining the pockets of the fossil fuel industry”.

“By increasing investments in US LNG to replace Russian gas, the EU would be trading a volatile, expensive and polluting energy source from one unreliable regime for another, deepening its reliance on risky LNG imports,” she said.