How the EU’s Clean Industrial Deal Will Impact Clean Energy
The European Commission has unveiled its ambitious Clean Industrial Deal (CID), a sweeping strategy designed to transform Europe’s industrial landscape while reinforcing its economic competitiveness.
The strategy aims to align industrial policy with the EU’s climate objectives, ensuring that all stakeholders are moving in unison towards the environmental goalposts set for the upcoming decades.
This significant blueprint places a special emphasis on sectors that have the highest energy consumption and the burgeoning clean tech sector.
These areas are crucial for the EU to meet its ambitious 2040 target of slashing net greenhouse gas emissions by 90% and achieving a climate-neutral status by 2050.
Speaking at the unveiling of the CID, President of the European Commission Ursula von der Leyen emphasised the importance of nurturing innovation, as well as driving the adoption of innovative technologies.
“Innovation, innovation, innovation,” she said.
“I know that too often these companies struggle to grow and bring their solutions to industrial scale. So, what do they need? They need access to capital.”
The CID is set to provide this much-needed capital to innovative companies.
Ensuring secure and affordable energy
By 2025, one of the pivotal challenges for European industries will be securing cost-effective and reliable energy sources.
The European Commission recognises that affordable energy is a cornerstone for maintaining competitiveness, especially in high-energy sectors such as steel, chemicals and cement.
The CID energy strategy includes an Action Plan for Affordable Energy aimed at fostering an internal energy market that lessens Europe's reliance on imported energy.
The strategy also includes increasing the use of electrification and integrating advanced digital technologies, like AI-driven smart grids, to streamline the energy ecosystem.
The European Investment Bank is also setting up a pilot program with financial assurances of $540m to bolster corporate power purchase agreements, thereby promoting access to stable, cost-effective renewable energy sources.
“We want to cut the ties that hold you back so that Europe can not only be a continent of industrial innovation, but a continent of industrial production,” Ursula explains.
I know that too often [climate tech] companies struggle to grow and bring their solutions to industrial scale. So, what do they need? They need access to capital.
Fostering market demand for clean industrial products
Where there is innovation, there should be demand — without which businesses may falter in their push towards decarbonisation.
To stimulate market demand for low-carbon industrial goods, the new CID will introduce sustainability and resilience criteria within public procurement policies.
A voluntary carbon intensity label, initially set to debut for steel in 2025, will help distinguish green products, thus motivating sustainable production practices.
An integral component of the CID includes the further development of the Industrial Carbon Management Strategy, which aims to enhance carbon capture use in industrial settings.
We want to cut the ties that hold you back so that Europe can not only be a continent of industrial innovation, but a continent of industrial production.
Furthermore, hydrogen is identified as playing a crucial role in powering regions and industries where electrification is currently unfeasible, particularly in heavy industries.
The European Hydrogen Bank is expected to launch a third funding phase, valued at approximately US$1.08bn by late 2025, along with regulatory frameworks to expand the hydrogen market and infrastructure.
Investing in Europe’s clean transition
The Commission estimates that an additional US$520bn each year in investment will be required to achieve Europe’s transformational goals pertaining to energy and industry.
Mobilising private capital is deemed essential, alongside enhancing EU-level funding mechanisms.
Plans are in place to create a new Industrial Decarbonisation Bank with a fund of US$108bn, pooled from the EU’s Innovation Fund and revenues from emissions trading.
We are on track to achieve our 55% emissions reduction target for 2030, and this gives you the predictability you need to plan your investments.
InvestEU programme mechanisms will be utilised to leverage private investments in clean technologies and industrial decarbonisation projects.
State aid rules are to be overhauled under the Clean Industrial Deal State Aid Framework to offer companies and governments a predictable five-year outlook for planning.
Ursula says: “We are on track to achieve our 55% emissions reduction target for 2030, and this gives you the predictability you need to plan your investments.”
A streamlined approval process for green manufacturing and renewable energy projects across Europe is also on the cards, aiming for quicker investments in eco-friendly infrastructures.
The EU also plans to spearhead global leadership in circular manufacturing by 2030, which involves a significant reduction in industrial waste and an increase in recycling initiatives.
The upcoming Circular Economy Act, set for a 2026 launch, is set to enhance regulations and support the cross-border trade of secondary raw materials.
“Europe has a clear roadmap — and we stay the course,” Ursula says.
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