The European Union has introduced a new strategy to strengthen the resilience of its industrial sector while accelerating decarbonization. On February 26, 2025, the European Commission presented the Clean Industrial Deal, a direct continuation of the Green Deal, with a focus on economic sustainability and industrial competitiveness.
At its core, the plan mobilizes €100 billion in public funds, which could unlock up to €400 billion in total investments, according to EU Climate Commissioner Wopke Hoekstra. The package includes measures to lower energy costs, expand clean energy infrastructure, and streamline industrial decarbonization through regulatory reforms.
“The Clean Industrial Deal aims to break the chains holding back our businesses and create a clear business case for Europe,” said European Commission President Ursula von der Leyen.
also read EU Competitiveness Compass: What’s Next for Energy, Climate, and Industry?
Six Strategic Pillars of the Clean Industrial Deal
The plan is structured around six key pillars, each designed to enhance Europe’s industrial competitiveness while advancing decarbonization:
- Affordable energy access: Reducing energy costs and accelerating electrification.
- Lead markets for clean technologies: Stimulating demand for low-carbon products.
- Financing the transition: Strengthening public and private investment in industrial decarbonization.
- Circular economy and resource security: Reducing dependency on critical raw materials.
- Global partnerships and trade: Strengthening international cooperation for clean technology.
- Workforce and skills development: Ensuring labor markets align with clean industry needs.
The strategy particularly targets energy-intensive industries, clean technology development, and circular economy initiatives, which are crucial for reducing Europe’s reliance on imported raw materials.
Affordable Energy Access: Cutting Costs for Industry
The EU is rolling out several initiatives to reduce energy costs and enhance supply security, including the Action Plan for Affordable Energy, introduced alongside the Clean Industrial Deal.
According to the Commission, this plan could save businesses €45 billion by 2025, rising to €130 billion by 2030 and €260 billion by 2040. It includes:
- Lower energy taxes: Encouraging EU member states to cut electricity taxes.
- Grid infrastructure expansion: A major investment package for electricity networks.
- Corporate Power Purchase Agreements (PPAs): A pilot program, backed by the European Investment Bank, to secure long-term energy supply deals for businesses.
Another key measure is the Industrial Decarbonization Accelerator Act, which will streamline permitting processes for industrial electrification and clean energy projects.
Strengthening Markets for Clean Technologies
The EU is implementing policies to increase demand for low-carbon industrial products, creating new market incentives for clean technologies.
A major component is the revision of the EU Public Procurement Directive, which aims to prioritize low-emission products in government contracts. The public sector accounts for 14% of EU GDP, making procurement policies a powerful tool for scaling clean industries.
Key measures include:
- Mandatory environmental and social criteria in public tenders.
- “Made in Europe” preferences, favoring EU-manufactured products.
- Alignment with the Carbon Border Adjustment Mechanism (CBAM) to prevent unfair competition from high-emission imports.
Additionally, the Industrial Decarbonization Accelerator Act will introduce a voluntary carbon intensity label for industrial products, starting with steel and cement, based on EU Emissions Trading System (ETS) data.
€100 Billion to Finance Industrial Decarbonization
To fund the transition, the EU is launching the Industrial Decarbonization Bank, which will manage the €100 billion allocated to green industry investments.
The bank’s main objectives include:
- Grants and low-interest loans for decarbonization projects.
- Carbon Contracts for Difference (CCfD) to stabilize carbon prices and de-risk clean technology investments.
- ETS revenue allocation to fund industrial emissions reductions.
The EU is also revising its State Aid Framework, offering tax incentives for green industries, simplified funding mechanisms, and increased flexibility for innovative projects in clean energy and manufacturing.
Circular Economy: Securing Raw Materials and Reducing Waste
To reduce reliance on imported raw materials, the Clean Industrial Deal includes:
- The Critical Raw Materials Act (2025): Prioritizing domestic recycling of key materials over exports.
- The Circular Economy Act (2026): Standardizing regulations on electronic waste recovery.
- Green VAT Initiative: Lowering taxes on refurbished and second-hand products.
According to the Commission, Europe’s circular economy market could triple in value from €31 billion today to €100 billion by 2030, creating 500,000 new jobs.
Global Trade and Carbon Border Adjustments
Alongside domestic reforms, the EU is advancing international partnerships to secure supply chains and expand global markets for clean technology.
Key initiatives include:
- Clean Transition Investment Partnerships (CTIP): Agreements to strengthen trade in low-carbon technologies.
- Foreign Investment Regulation (2026): New rules to safeguard European economic security.
- CBAM Adjustments: Refining the EU’s Carbon Border Adjustment Mechanism to better protect European industries from high-emission imports while reducing administrative burdens.
A mid-2025 review will assess the potential expansion of CBAM to additional sectors and downstream products.
Workforce and Skills Development
The EU is also addressing the labor force transformation required for a clean industrial future.
Key initiatives include:
- The Skills Union (2025): A comprehensive strategy for clean industry job training.
- The Just Transition Observatory (2026): Monitoring the employment impacts of green policies.
- State aid for industrial workforce training (2027): Incentives for companies investing in clean industry skills development.
A New Industrial Roadmap for Europe
The Clean Industrial Deal marks the EU’s most significant shift in industrial policy in decades. By integrating competitiveness and climate policy, the plan seeks to position Europe as a global leader in clean technology, energy resilience, and sustainable manufacturing.
The success of this strategy will depend on its implementation, particularly how EU institutions translate these policy commitments into concrete actions in the coming years.