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The European Union has unveiled the Clean Industrial Deal, a transformational business plan outlining concrete actions to turn decarbonisation into ‘a driver of growth‘ for European industries by supporting renewable energy sources. Specifically, the plan aims to lower energy prices, create ‘quality’ jobs and the ‘right’ conditions for companies to thrive, accelerating decarbonisation while at the same time securing the future of manufacturing in Europe. With the new plan, the EU wants to tackle three challengers at once—a climate crisis and its consequences, competitiveness concerns and economic resilience. As informed, to provide short-term relief, the Clean Industrial Deal will mobilise over EUR 100 billion to support EU-made clean manufacturing. As European industries are said to be faced with “high energy costs and often unfair global competition,“ the framework can drive growth and competitiveness of these industries. “Europe is not only a continent of industrial innovation, but also a continent of industrial production. However, the demand for clean products has slowed down, and some investments have moved to other regions,” Ursula von der Leyen, President of the European Commission, commented. “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.” Specifically, the focus will be mainly on two closely linked sectors: energy-intensive industries and the clean-tech sector. Circularity is also a central element of the deal, as the EU needs to maximise its limited resources and reduce overdependence on third-country suppliers for raw materials. The main elements of the Clean Industrial Deal are: Affordable energy; Boosting demand for clean products; Financing the clean transition; Circularity and access to materials; Acting on a global scale and; Skills and quality jobs. Offshore Wind and Accelerating Rollout of New Clean Energy Capacity With the Action Plan for Affordable Energy adopted on February 26, 2025, the EU intends to reduce dependence on imported fossil fuels, speed up the roll-out of clean energy and advance toward electrification and a fully integrated single market for energy. The Plan builds on the recent reform of the Electricity Market Design, the REPowerEU Plan, sector-specific blueprints for wind, solar and grids and revised energy and climate legislation under the Fit for 55 package, according to the European Commission. One of the action points in the plan is reducing permitting times for renewable energy projects, including an adaptation of national permitting regimes. This will reduce the length of permitting procedures for offshore wind to less than two years in “renewable acceleration areas” and to three years outside those. Furthermore, the Action Plan for Affordable Energy calls for tripartite contracts between the public sector (including financial institutions), clean energy developers and energy-consuming industry, which would include sectoral contracts for certain sectors such as offshore wind. Both the Action Plan for Affordable Energy and the broader Clean Industrial Deal are expected to facilitate a boost to the European offshore wind supply chain and manufacturing. When it comes to the Industrial Decarbonisation Accelerator Act, the EU plans to increase demand for EU-made clean products by introducing sustainability, resilience, and made-in-Europe criteria in public and private procurements. It will propose concrete measures to address permitting bottlenecks related to industrial access to energy and industrial decarbonisation. In the context of financing, the European Commission will also adopt a new Clean Industrial Deal State Aid Framework to accelerate the approval of state aid to roll out renewable energy, decarbonise industry and ensure sufficient manufacturing capacity of clean tech. It will also strengthen the Innovation Fund and propose an Industrial Decarbonisation Bank, aiming for EUR 100 billion in funding, based on available funds in the Innovation Fund, additional revenues resulting from parts of the ETS as well as the revision of InvestEU. Moreover, the commission plans to launch a dedicated call under Horizon Europe to stimulate research and innovation in these areas. Finally, it would amend the InvestEU Regulation to increase the amount of financial guarantees that InvestEU can provide to support investments. This will in turn mobilise up to EUR 50 billion for the deployment of clean tech, clean mobility and waste reduction. Promoting Uptake of Renewable and Low-Carbon Hydrogen According to the EC, hydrogen has a central role to play in decarbonising the EU energy system, in particular in the hard-to-abate sectors where electrification is not yet a viable option. The commission said it will therefore adopt in Q1 2025 the delegated act on low carbon hydrogen, to clarify the rules for producing low carbon hydrogen in ‘a pragmatic way’, providing certainty to investors. |
