COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A Green Deal Industrial Plan for the Net-Zero Age
Date: 2023-02-01
Institutions: European Commission, Secretariat-General
Subjects: EU environmental policy, EU industrial policy, clean technology, climate change, competitiveness, digital literacy, green economy, industrial development, modernisation of industry, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 1.2.2023  COM(2023) 62 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS  A Green Deal Industrial Plan for the Net-Zero Age  
 
 
1. 

INTRODUCTION: A GREEN DEAL INDUSTRIAL PLAN FOR THE NET-ZERO AGE 

This decade will be decisive for the world to limit the rise in global temperatures and to 
take the necessary steps towards net-zero. The stakes are high and the challenges complex – 
but there is a once in a generation opportunity to use this imperative to act as a catalyst to invest 
in the clean energy economy and industry of the net-zero age.  

The  European  Green  Deal  sets  in  stone  our  green  transition  ambitions,  including  our 
climate targets towards net-zero by 2050. The Fit for 55 package provides a concrete plan to 
put the European economy firmly on track, with the REPowerEU Plan accelerating the move 
away from fossil fuels. Alongside the Circular Economy Action Plan, this sets the framework 
for the transformation of the EU’s industry for the net-zero age. 

In  the  next  few  years,  the  economic  shape  of  the  net-zero  age  will  be  firmly  set.  New 
markets  will  have  been  created,  breakthrough  clean  technologies  will  have  been  innovated, 
developed, and brought to market, and our energy systems transformed. Therefore, those who 
invest first and faster today will secure their place in this new economy and create jobs for a 
newly skilled workforce, rejuvenate industrial manufacturing bases, lower costs for people and 
businesses and be in a prime position to support other parts of the world to decarbonise their 
own economies.  

The  scale  of  the  opportunity  for  European  industry  puts  this  need  in  sharp  focus.  The 
International Energy Agency estimates that the global market for key mass-manufactured clean 
energy technologies will be worth around USD 650 billion a year by 2030 (approximately EUR 
600 billion) – more than three times today’s level. The related energy manufacturing jobs could 
more than double in the same time period1. The net-zero industry globally is growing strongly, 
to the extent of demand sometimes outpacing supply. 

The EU is well equipped to step up and seize the net-zero opportunity. Europe’s economic 
model, built on its Single Market, has brought rising prosperity over the past decades. Europe 
is a leading player on innovation, venture capital and deployment of net-zero technologies and 
sustainable products. It has a strong starting point – an industry with a track record as a proven 
trend-setter  and  standard-setter,  with  growing  levels  of  digitalisation.  Manufacturing  high 
quality and innovative products that are used across the world. It has world-leading scientists 
and  researchers,  consistently  developing  breakthrough  solutions  or  refining  existing 
technologies.  

The EU has also shown how the green transition can strengthen competitiveness. The phase-
out of Russian fossil fuels has accelerated a new industrial revolution aimed at ending the age 
of fossil fuels. A wide range of new  net-zero technologies is being developed and deployed 
across our economy: in transport, buildings, manufacturing, energy, and even creating entirely 
new markets. Our net-zero ecosystem was worth over EUR 100 billion in 2021, doubling in 
value since 20202.  

The EU has also proven its inbuilt resilience to continued change and challenge. Industry 
is being challenged on everything from high inflation, labour shortages, demographic change, 
post-COVID supply chains disruptions, rising interest rates, spikes in energy costs and input 
prices. This is paired with strong, but not always fair, competition on the fragmented global 
market. Despite these headwinds, so far, the EU economy has held up remarkably and political 
unity is paying off. Gas and oil prices have now fallen below pre-war levels. Inflation across 

1 Energy Technology Perspectives (2023), International Energy Agency. 
2  The  rise  of  European  Clean  Tech  –  Report,  https://dealroom.co/uploaded/2022/04/Dealroom-Talis-Climate-
Tech-Europe-2022.pdf 

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Europe  dropped  for  the  second  consecutive  month,  and  markedly,  in  December  2022. 
Unemployment is lower than before the 2008 financial crisis and labour markets continue to 
perform well.  

The  EU  is  committed  and  convinced  that  it  can  speed  up  net-zero  industrial 
transformation  at  home.  On  top  of  needs  and  opportunities  such  as  the  roll-out  of 
renewables, the transformation of energy and transport infrastructures such as grids, the 
massive switch to fossil-free hydrogen as a storage medium, fuel and feedstock, the EU 
can also be a leading player in the net-zero industries of the future. We can also create 
new forms of clean tech cooperation with our partners abroad. By working together with 
partners on developing net-zero technologies, diversifying and strengthening supply chains, and 
supporting others on their green transition, the race to net-zero can be good for the planet and 
for business.  

And the encouraging signs are that Europe’s partners are also beginning to seize the net-
zero industrial opportunities. The United States’ Inflation Reduction Act will mobilise over 
USD 360 billion by 2032 (approximately EUR 330 billion). Japan's green transformation plans 
aim to raise up to JPY 20 trillion (approximately EUR 140 billion) – through ‘green transition' 
bonds.  India  has  put  forward  the  Production  Linked  Incentive  Scheme  to  enhance 
competitiveness in sectors like solar photovoltaics and batteries. The UK, Canada and many 
others  have  also  put  forward  their  investment  plans  in  clean  tech  technologies.  Europe  is 
committed to working with all of those partners for the greater good.  

However, trade and competition on net-zero industry must be fair. Some of our partners’ 
initiatives  can  have  undesired  collateral  effects  on  our  own  net-zero  industries.  More 
fundamentally, China’s subsidies have long been twice as high as those in the EU, relative to 
GDP3. This has distorted the market and ensured that the manufacturing of a number of net- 
zero  technologies  is  currently  dominated  by  China,  which  has  made  subsidising  clean  tech 
innovation and manufacturing a priority of its Five-Year Plan. China’s pipeline of announced 
investments in clean technologies exceeds USD 280 billion (approximately EUR 260 billion). 
Europe  and  its  partners  must  do  more  to  combat  the  effect  of  such  unfair  subsidies  and 
prolonged  market  distortion.  Where  the  public  footprint  in  private  markets  is  outsized, 
distortions create an unlevelled playing field and unfair competition emerges. The Commission 
will continue to make full use of trade defence instruments (TDI) to defend the Single Market, 
and  rules-based  international  trade,  from  unfair  trade  practices  like  dumping  and  distortive 
subsidies.  

Going forward, competitiveness challenges remain. The era of cheap fossil fuels is now over, 
calling for an acceleration of the green transition to ensure industry has access to abundant and 
affordable clean energy. The EU needs to build on its greatest strength, the Single Market, and 
avoid  fragmentation.  Therefore  the  Commission  is  committed  to  come  forward  with  a 
comprehensive European  approach, based on common strategic priorities and an investment 
needs assessment. This will require to explore various options to secure a common EU response, 
including EU funding. More also needs to be done to facilitate businesses’ access to private 
funding, notably by completing the Capitals Market Union. Greater competitiveness must go 
hand in hand with well-paid quality jobs and investment in human capital.  

The net-zero industrial age will be framed by the decisions taken today. The EU must be 
ready to lead the way, with speed, ambition and a shared sense of direction. A common 
response, anchored in EU policies and instruments, will  be far more effective than the 
addition of 27 national approaches. 

3 Chinesische Subventionspolitik: Effekte auf deutsche Unternehmen (vbw-bayern.de) 

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2.  A GREEN DEAL INDUSTRIAL PLAN – STAYING AHEAD OF THE GAME  

Against this backdrop of seismic opportunity and challenge, Europe needs a new Green 
Deal Industrial Plan. The Plan will form part of the European Green Deal, which set us 
on the path to climate neutrality, and will enable Europe to lead the way globally in the 
net-zero industrial age.  

The starting point for the Plan is the need to massively increase the technological development, 
manufacturing production and installation of net-zero products and energy supply in the next 
decade, and the value added of an EU-wide approach to meet this challenge together. This is 
made more difficult by the global competition for raw materials and skilled personnel. The Plan 
aims to address this dichotomy by focusing on the areas where Europe can make the biggest 
difference. It also seeks to avert the risk of replacing our reliance on Russian fossil fuels with 
other strategic dependencies that could impede our access to key technologies and inputs for 
the  green transition, through  a mix of diversification and own development  and production.  
The  Plan  will  complement  ongoing  efforts  to  transform  industry  under  the  European  Green 
Deal  and  the  EU  Industrial  strategy,  in  particular  the  Circular  Economy  Action  Plan. 
Modernising and decarbonising energy-intensive industries also remains a top priority, as does 
ensuring job transitions and quality job creation through training and education. 

This  is  why  a  strong  joint  European  response  to  boost  the  net-zero  industry  is  needed.  The 
Green Deal Industrial Plan will play to our strengths: openness, innovation, inclusiveness and 
sustainability. With the right conditions, the net-zero industry in Europe will play a vital role in 
transforming the continent into a green economy - delivering prosperity in the EU and leading 
globally both on technology and on combatting climate change and environmental pollution. 

This outline for a new Green Deal Industrial Plan is based on four pillars:  

  a predictable and simplified regulatory environment;  

 

faster access to sufficient funding;  

  skills; and 

  open trade for resilient supply chains.  

2.1.  A predictable, coherent and simplified regulatory environment  

The  EU  has  traditionally  relied  on  a  strong  regulatory  environment  for  setting  conducive 
conditions for business, for providing quality employment for our workforce and a high level 
of  protection  for  our  environment.  These  three  dimensions  can  be  mutually  reinforcing,  if 
regulation is balanced and smartly designed, which requires continuous attention. This is why 
this  year  the  Commission  has  introduced  an  additional  'competitiveness  check'  on  all  new 
regulation to ensure that all potential competitiveness impacts are addressed and unnecessary 
burdens avoided. A simple, predictable and clear regulatory environment is key to promoting 
investment. Action at EU level prevents fragmentation between 27 regulatory approaches. 

This  spring,  the  Commission  will  table  three  key  proposals  for  industrial  competitiveness, 
rooted in the need for reform: 

First, as part of the Green Deal Industrial Plan, the Commission proposes to put forward 
a Net-Zero Industry Act to underpin industrial manufacturing of key technologies in the 
EU. The act would provide a simplified regulatory framework for production capacity of 
products that are key to  meet our climate neutrality goals, such as batteries, windmills, heat 

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pumps, solar, electrolysers, carbon capture and storage technologies4. The Net-Zero Industry 
Act would in particular: 

  Following  sector-specific  analysis,  identify  goals  for  industrial  capacity  by  2030 
where necessary to ensure that strategic dependencies do not put the green transition at 
risk. It will consider the whole supply and value chain across borders, so that supplies 
do not become a bottleneck; 

  Reduce the length and enhance the predictability of permitting processes by defining 
specific  time  limits  for  different  stages  of  permitting,  and  significantly  reinforce 
Member States’ administrative capacity, e.g. by introducing a 'one-stop-shop' - a sole 
point of contact for investors and industrial stakeholders during the entire administrative 
process. 

As European value chains are highly integrated and interconnected in the Single Market (see 
Figure 1), the Net-Zero Act would define simple and operational criteria for identifying net-
zero  supply  chain  projects  of  strategic  interest.  This  should  ensure  that  all  Member  States 
continue benefiting from innovative industrial  deployment by promoting  strategic projects, 
including multi-country projects, accessible to both developed and less developed regions. 
These projects could benefit from accelerated permitting procedures and attract private as well 
as EU and national public funding5. 

European  standards  can  help  to  promote  the  roll-out  of  clean  and  digital  technologies.  In 
particular for new industrial value chains, anticipating and developing high-quality European 
standards could provide EU industries an important competitive advantage – including at global 
level.  They  could  demonstrate  ‘marketability’  and  attract  investment  in  firms  that  adhere  to 
them. European standards would allow EU industries to scale up their technologies across the 
Single Market – this is very important for start-ups and SMEs.  

  The Act could enable the Commission to request European standards promoting the 

fast roll-out of key technologies6. 

4 The precise product scope remains to be defined. Taking technology neutrality as a starting point, the Act would 
build on an assessment of strategic importance and identified needs of manufacturing investment in different types 
of net-zero products. Those technologies may go beyond the strategic net-zero technologies that will be eligible 
for the specific type of support available under the State aid Temporary Crisis and Transition Framework.  
5 National public funding constituting state aid shall be in line with the TCTF. 
6 For example, the recycling of raw materials for solar panels or the installation of wind turbines could be facilitated 
by complying with European standards developed in these fields. It is already possible to develop a standard for 
the collection, transport and treatment of batteries to enable fast-tracking and simplified procedure for recycling 
installations complying with that standard. 

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Figure 1 Wind supply chains and jobs are highly integrated in the EU and Europe 

Source: Wind Europe. The map presents EU wind manufacturing facilities across its segments.  
The circles size is proportional to the number of jobs per facility (small circles: 10-50 employees; big circles: over 
1000 employees).  

To  foster  innovation,  the  Commission  will  assess  the  possibility  to  establish  regulatory 
sandboxes  to  allow  for  rapid  experimentation  and  disruptive  innovation  to  test  new 
technologies.7  Such  regulatory  sandboxes  may  also  pave  the  way  for  simplification  of  the 
process of authorisation/certification for placing products in the market. These procedures can 
now be lengthy, slowing the introduction of innovative products and representing a significant 
burden  especially  for  SMEs  and  start-ups.  The  Commission  will  continue  funding  testing 
facilities as one important step to bring technology to market. 

To further stimulate the demand for net-zero products at large scale, various forms of public 
action such as public procurement, concessions and incentives to business and end users 
to use net-zero technologies based on sustainability and circularity can play a big role. 
Public authorities in the EU spend around 14% of GDP (around EUR 2 trillion per year) on the 
purchase of services, works and products. Procurement policy and other public support can play 
a role in maximising public-interest returns on public money while fostering security of supply 
through  diversification  of  sources.  To  this  end,  the  Commission  would  define  sustainability 
characteristics and possible requirements for net-zero products, using available legal tools and 
existing EU standards. It would promote a more predictable and uniform demand for net-zero 
solutions and allow public authorities to set out ambitious sustainability requirements. 

7 The Commission intends to publish a guidance showcasing the relevant use cases of regulatory sandboxes, test 
beds and living labs in order to support policymakers and innovators in their approach to experimentation in the 
EU by summer 2023. 

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Second, the Commission will propose a Critical Raw Materials Act. The manufacturing of 
EU net-zero technologies is only possible if access to relevant critical raw materials is ensured, 
including  by  diversifying  sourcing  and  by  recycling  raw  materials  to  lower  the  EU’s 
dependence on  highly  concentrated  supplies  from  third countries and boost  quality  jobs  and 
growth  in  the  circular  economy.  This  act  will  aim  to  provide  the  EU  security  of  supply, 
including by strengthening international engagement, facilitating extraction (where relevant), 
processing and recycling, while ensuring high environmental standards and continuing research 
and innovation, e.g. to reduce material use and to develop bio-based substitutes. There have 
already been tangible successes: today, some EU companies are using lignin stemming from 
wood in batteries, instead of graphite. 

Third,  energy.  Russia’s  weaponisation  of  energy  was  a  major  wake-up  call  for  security  of 
supply and tackling dependencies. The competitiveness of many companies has been severely 
weakened  by  high  energy  prices  and  the  disruptions  in  several  supply  chains.  This  has 
particularly  been  the  case  of  the  energy-intensive  industries8.  To  address  the  high  costs  of 
energy and replace costly fossil fuels with cheaper renewables, important steps have been taken 
in  line  with  the  REPowerEU  plan.  For  example,  in  2022  wind  and  solar  renewable  energy 
production capacity in the EU exceeded 400 GW, an increase of over 25% compared to 2020.9 
We have set up the EU energy platform to pool gas demand, coordinate infrastructure use and 
negotiate with international partners, made savings, filled storages and put in place a cap on 
short-term markets. Several infrastructure projects and interconnections have been completed 
in both electricity and gas. In March, the Commission will present a reform of the electricity 
market design, for which a public consultation is currently ongoing. Long-term price contracts 
could play an important role to enable all electricity users to benefit from more predictable and 
lower  costs  of  renewable  power.  As  set  out  in  the  REPowerEU  Plan,  boosting  industrial 
competitiveness  will  require  both  transforming  industrial  processes,  massive  speed-up  and 
scale-up of renewable energy and stronger efforts for energy efficiency and reduction of energy 
demand as well as reskilling and upskilling of the workforce. 

The new EU regulatory framework for batteries is a crucial element in the EU's transition to 
a  climate  neutral  economy,  by  securing  competitive  and  resilient  value  chains  for  battery 
production,  reuse  and  recycling  in  the  EU.  Going  forward,  the  Ecodesign  for  Sustainable 
Products Regulation10 will apply to a broader range of products and further expand the range 
of sustainability requirements, in which EU industry excels. The Commission will give a high 
priority  to  work  on  net-zero  technologies  under  the  existing  and  future  Ecodesign  working 
plans.   

Furthermore, it is key that consumers can make their choices based on transparent and reliable 
information  on  the  sustainability,  durability  and  carbon  footprint  of  the  products.  Market 
transparency is a tool facilitating uptake of technologically and environmentally superior net-
zero  products.  For  example,  the  Commission  will  propose  a  unified  energy  label  for  heat 
pumps  to  allow  users  to  compare  different  technologies11  by  the  end  of  this  year.  The 
Commission  proposal  on  empowering  consumers  for  the  green  transition  also  works  in  this 
direction. 

8 Such as producers of polysilicon used in solar PV or of battery cells manufacturers. 
9  Commission  estimates  based  on  data  from  International  Renewable  Energy  Agency  (Irena)  and  industrial 
stakeholders. 
10  The  EU’s  ecodesign  policy  sets  harmonized  rules  for  energy-related  products  on  aspects  such  as  energy 
consumption, water consumption, emission levels and material efficiency, stimulating both demand and supply 
for more sustainable products. 
11 For heat pumps thanks to the energy labelling database EPREL https://eprel.ec.europa.eu/screen/home  

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Finally, infrastructure is key to the conducive net-zero business environment that the Green 
Deal Industrial Plan seeks to establish. Full coverage of the TEN-T networks with charging and 
refueling infrastructure and development and strengthening of a European hydrogen backbone 
and the extension and strengthening of smart electricity grids to accommodate large quantities 
of renewables on the TEN-E network require large investment12. but also a strengthening of our 
regulatory  framework.  Now  is  the  time  to  map  the  infrastructure  needed  with  a  European 
mindset.  The  Commission  urges  co-legislators  to  adopt  the  Alternative  Fuels  Infrastructure 
Regulation  (AFIR)  as  soon  as  possible, to  help  create  a  future-proof  charging  and  refueling 
network. To develop  and strengthen hydrogen  and electricity infrastructure the Commission 
will further examine the resource needs of the Connecting Europe Facility and will use the full 
scope of the revised TEN-E Regulation to accelerate the planning, financing and deployment 
of  crucial  (cross-border)  infrastructure.  Notably  the  development  and  implementation  of  the 
cross-border infrastructure needs to be accelerated in the coming years. The Commission will 
also  consider  further  ways,  including  possible  legislative  action,  to  make  sure  that  Member 
States deliver cross-border energy infrastructure, so that there are no undue delays to the roll-
out of the strategic infrastructure. 

The  Green  Deal  Industrial  Plan  will  succeed  in  boosting  competitiveness  if  all  actors 
(authorities, social partners, investors, consumers) join forces towards the same objectives. The 
recently established Clean Tech Europe Platform, the Clean Energy Industrial Forum, together 
with  other  relevant  stakeholders,  would  support  the  plan,  coordinate  action  to  meet  the 
investment  and  manufacturing  targets  and  further  promote  matchmaking  opportunities.  The 
Commission will continue to engage closely with the European Parliament to make the Green 
Deal Industrial Plan a success. 

2.2. 

Speeding up access to finance 

Global net-zero industry has experienced strong growth, with clean energy investments up by 
10% in 2022 year on year. The EU’s net-zero industry is competitive in some sectors, such as 
wind energy or heat pumps, even in our relatively high-energy-price environment, while it has 
limited  footholds  in  other  segments,  such  as  solar  PV  panels.  Moreover,  ensuring  a  timely 
transition  to  a  net-zero  economy  requires  faster  development  of  those  sectors.  The  EU 
industry’s market shares are under strong pressure, to a great extent because subsidies 
abroad  are  unleveling  the  playing  field.  This  calls  for  access  to  funding  for  net-zero 
industry to be extended and accelerated. This is the second pillar of the Green Deal Industrial 
Plan.  

Targeted public funding must also play its role. Already today, the EU and national funding 
play  an  important  role  in  fostering  net-zero  innovation,  manufacturing,  roll-out  and  related 
strengthening of grids and infratructure. Private funding will be key to unlock investments for 
the net-zero industry.  

Under  NextGenerationEU,  the  27  national  recovery  and  resilience  plans  funded  by  the 
Recovery  and  Resilience  Facility  (RRF)  already  make  available  EUR  250  billion  for  green 
measures, including investments supporting the decarbonisation of industry. Horizon Europe 
dedicates  EUR  40  billion  to  Green  Deal  research  and  innovation,  also  in  partnership  with 
industry.  

Cohesion policies make around EUR 100 billion available for green transition, including the 
Just Transition Fund. The Commission will further facilitate the swift mobilisation of Cohesion 

12  Regarding  the  investment  needs,  see  Staff  Working  Document  REPowerEU  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52022SC0230&from=EN   

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investments in support of the Net-Zero Industrial Plan, including by speeding up the design and 
reimbursements of energy efficiency and renewable projects through standard reimbursement 
schemes.  

To  date,  these  EU  funding  sources  have  largely  benefitted  research  and  innovation  and 
deployment  of  renewable  energy  and  related 
targeting 
manufacturing capacity in the sector. 

infrastructures,  rather 

than 

Funding  for  net-zero  industrial  value  chains  can  be  stepped  up  in  scale  and  speed  through 
targeted state aid. But to avoid fragmenting the Single Market due to varying levels of national 
support – and varying capacities to grant such support – there also needs to be adequate EU-
level funding to facilitate the flourishing of such industrial value chains across the Union as a 
whole.  

2.2.1 National funding 

Starting with state aid: EU competition policy provides tools to support the development and 
deployment of key cutting edge technologies strategic for the green and digital transitions, while 
preserving the integrity of the Single Market and respecting EU’s international obligations. In 
2022 alone, the Commission approved aid schemes with an overall budget of EUR 51 billion 
to  deploy  new  renewable  energy  production  capacity  and  decarbonise  industrial  production 
across the Union. As early as March 2022, following Russia's aggression against Ukraine, the 
Commission adopted a Temporary Crisis Framework providing a tool for Member States to 
remedy the negative economic effects created by the war and facilitate structural adjustments 
to better respond to the resulting economic situation. The Framework has been amended twice 
and  already  includes  specific  provisions  on  simplified  support  for  renewable  energy, 
decarbonisation technologies and energy efficiency measures.   

The Commission now intends to allow further flexibility for the Member States to grant 
aid limited to carefully defined areas and on a temporary basis. The Commission will consult 
Member States on a proposal to adapt State aid rules on a temporary basis, until end 2025, to 
further  speed  up  and  simplify,  with  easier  calculations,  simpler  procedures,  and  accelerated 
approvals. These changes will also assist Member States in delivering on specific projects under 
National Recovery Plans which fall within their scope.  

The  Commission  intends  to  adapt  state  aid  rules  along  five  axes,  subject  to  conditions 
necessary to limit distortions to the Single Market, to avoid greater regional disparities and to 
ensure compliance with international obligations. Four of these will be implemented through 
the proposed amendment of the Temporary Crisis Framework (TCF), which will be transformed 
into the Temporary Crisis and Transition Framework (TCTF) for State aid: 

1.  Simplification of aid for renewable energy deployments;  

The  TCF  has  already  simplified  aid  for  renewable  deployments.  The  draft  TCTF  would  go 
further, by: 

  extending  the  provisions  to  all  renewable  technologies  (under  RED  II)  and  to 

renewable hydrogen and biofuel storage;  

  eliminating the need for open tenders for less mature technologies (for which tenders 

may work less well); and  

  extending deadlines to complete projects. 

2.  Simplification of aid for decarbonising industrial processes ;  

Decarbonisation aid to industry had already been simplified by the TCF. The TCTF would go 
further with a number of provisions, such as: 

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- 

allowing aid by reference to standard percentages of investment costs, based on case 
experience – for hydrogen use, energy efficiency and electrification. 

-  More  flexible  aid  ceilings  per  beneficiary  in  schemes  fulfilling  specific  conditions. 

3.  Enhanced investment support schemes for production of strategic net-zero technologies, 
including the possibility of granting higher aid to match the aid received for similar 
projects by competitors located outside of the EU while ensuring the proportionality of 
such aid; 

4.  More targeted aid for major new production projects in strategic net-zero value chains, 

taking into account global funding gaps. 

The draft TCTF would aim to ensure a level playing field with other jurisdictions and within 
the internal market, targeted to those sectors where a third-country delocalisation risk has been 
identified, and proportionate in terms of aid amounts. The TCTF would enable Member States 
to  put  in  place  schemes  to  support  new  investments  in  production  facilities  in  defined, 
strategic net-zero sectors, including via  tax  benefits. The permitted  aid amount would be 
modulated with higher aid intensities and aid amount ceilings if the investment is located in 
assisted areas, in order to contribute to the goal of convergence between Member States and 
regions. Appropriate conditions would be required to verify the concrete risks of diversion of 
the investment outside the EEA and that there is no risk of relocation within the EEA. Member 
States can align their national fiscal incentives along a common scheme that the Commission 
stands ready to prepare, and thereby create a common scheme offering greater transparency 
and predictability to businesses across the EU. 

In addition, Member States would also be able to match the aid offered by a third country, for 
individual  initial  investments  in  the  same  targeted  sectors  relevant  to  net-zero  technology 
leadership,  subject  to  conditions,  such  as  being  part  of  a  multi-country  cooperation,  with 
material positive spillovers across Member States and with particular consideration for assisted 
areas.  Such  aid  should  address  substantiated  risks  of  certain  investments  being  diverted  in 
favour of third countries outside the EEA, and it should not facilitate relocation of production 
activities between Member States. The aid would be limited to what is necessary for the project 
to take place in the EEA. 

The Commission will remain committed to fast procedures under the TCTF, as is already the 
case for aid approved under the Temporary Crisis Framework, where median approval time has 
been 19 days.  

5.  Significantly increasing notification thresholds for state aid in these fields 

The Commission will adapt the State Aid rules on this fifth axis by further revising the Green 
Deal General Block Exemption Regulation. In addition to provisions linked to IPCEI projects 
(see below), this would give Member States more flexibility: 

- 

- 
- 

to support measures in key sectors, such as hydrogen, carbon capture and storage, zero-
emission vehicles and energy performance of buildings, by further increasing thresholds 
triggering notification to the Commission.  
enlarge the scope of investment aid for recharging and refuelling infrastructures,  
further facilitating training aid for skills.  

Today, the EU has five Important Projects of Common European Interest (IPCEI), large 
development  projects  undertaken  by  several  Member  States  to  fund  new  technologies  in 
strategic areas, with strong positive spillovers across borders and for innovation, workers and 
customers: one in microelectronics, two in batteries and two in hydrogen, with more projects in 

9 

 
 
 
preparation13. Public support of EUR 18 billion for approved IPCEIs is expected to unlock an 
additional EUR 36 billion in private investments, a leveraging factor of 2.  

To accelerate the roll-out of new projects, the approval of IPCEI related projects will be 
further streamlined and simplified; 

  A code of good practices for a transparent, inclusive and faster design of IPCEIs will 
allow for a streamlined assessment and is to be endorsed by the Member States and the 
Commission this spring.  

  The Commission is also preparing to speed up the implementation of smaller, IPCEI-
related,  innovative  projects,  in  particular  by  small  and  medium-sized  enterprises, 
through  higher  notification  thresholds  and  greater  aid  intensities  under  the  General 
Block Exemption Regulation.    

2.2.2 EU funding 

To support the transition reaching the EU’s net-zero objectives and REPowerEU targets with 
diversified sources and secure supplies, the EU will have to continue to rely on a competitive 
net-zero industry.  Greater  investments  are needed  by  2030 in  the manufacturing of  net-zero 
technologies given the European ambitious EU targets and international competition.. 

Important disparities exist within the EU in terms of support by Member States. For example, 
while  in  2020,  0.57%  of  EU  GDP  was  allocated  to  support  renewable  energy  sources,  one 
country allocated almost 1% of its GDP and ten others spent less than half the EU average.14    

To  avoid  fragmenting  the  Single  Market  due  to  varying  levels  of  national  support, 
facilitate the green transition across the Union as a whole,  avoid exacerbating regional 
disparities  and  address  the  gap  between  funding  currently  available  and  the  financing 
needs for scaling up the net zero industry, we must also step up EU funding. Accompanying 
the Green Deal Industry Plan, the EU budget will continue to contribute to targeted and swift 
funding of the EU’s net-zero industry. REPowerEU is our dedicated vehicle, and is boosted by 
other EU funds. 

The Commission  will continue to  provide support  to  Member States to  design, develop  and 
implement reforms as well as help strengthen the administrative capacity of Member States to 
ensure effective implementation of the funding.  

REPowerEU 

Thanks to the agreement reached end of 2022, the EU support to the transition will now be 
increased  with  the  additional  funding  brought  to  the  RRF  by  the  REPowerEU  initiative: 
additional  RRF  grants  (EUR  20  billion)  will  be  available  to  Member  States  to  promote  the 
greening of industry, to support EU net-zero industry projects, and to assist energy-intensive 
industries in the face of high energy prices. Member States will also be able to dedicate grants 
of the Brexit Adjustment Reserve (EUR 5.4 billion) to these objectives. Furthermore, they will 
be able to use the remaining RRF loans (EUR 225 billion) with substantial pre-financing for 
these investments and reforms15. 

In order to assist the Member States in implementing the RRF and its REPowerEU component, 

13 Such as additional batteries and hydrogen, or possibly solar or heat pumps. 
14 Study on energy subsidies and other government interventions in the European Union - Publications Office of 
the EU (europa.eu). Public support measures include direct transfers to business and consumers; tax expenditures 
(e.g. tax credits, VAT reduction); income or price support; Research & Development (R&D) support. 
15 This comes on top of the existing transfer possibilities of 5% from the cohesion policy funds (up to EUR 17.9 
billion). 

10 

 
 
                                                           
the  Commission  published  today  the  Guidance  on  Recovery  and  Resilience  Plans.  The 
Guidance  provides  flexibility  to  adjust  the  plans  to  the  current  context,  and  to  prepare 
REPowerEU  chapters.  It  acknowledges  issues  arising  from  the  disruption  of  supply  chains, 
energy  prices  and  inflation  and  offers  to  Member  States  effective  solutions  to  maintain  the 
ambition of the initial plans. The Commission strongly encourages Member States to include 
in  their  modified  RRPs  simple  and  effective  measures  to  provide  immediate  support  to 
companies and boost their competitiveness:  

 

 

(i) one-stop-shops for the permitting of renewables and net-zero projects to accelerate, 
digitalize  and  streamline  the  processes  for  obtaining  the  necessary  approvals  and 
permits  for  building  and  operating  net-zero-tech  projects;  coupled  with  dedicated 
strengthening  of  administrative  capacity  to  eliminate  administrative  bottlenecks  in 
permitting;(ii)  tax  breaks  or  other  forms  of  support  for  green  net-zero  technologies 
investments  undertaken  by  businesses,  taking  the  form  of  either  a  tax  credit,  an 
accelerated depreciation or a subsidy linked to the acquisition or improvement of green 
investment assets;  
(iii) and investing in equipping the workforce with skills necessary for this industrial 
transition.  

The European Investment Bank (EIB) Group will support the achievement of all the objectives 
of the RePowerEU Plan with additional loans and equity16. The Commission and the EIB Group 
will continue working together to explore how the EIB Group could step up its clean tech and 
other activities contributing to the Green Deal.  

InvestEU Programme 

The InvestEU Programme is well placed to boost net-zero investments in the EU. InvestEU is 
the Union’s  instrument  for catalysing private investments  in  EU priority  areas. Through the 
EIB, the EIF, the EBRD and 14 other implementing partners, the EU supports public and private 
investments  in  net-zero  tech  and  industrial  innovation.  Examples  of  projects  that  can  be 
supported  are  RDI  of  battery  technologies,  critical  raw  materials  recycling,  demonstration 
plants for manufacturing materials in the supply chain of electric vehicle batteries, hydrogen 
propulsion  technologies,  innovative  advanced  biofuels  plants,  advanced  manufacturing 
technology  equipment  in  steel  processing.  InvestEU  can  mobilise  over  EUR  372  billion  of 
financing – public, but mainly private - through the backing of the EU budget guarantee of EUR 
26.2 billion.   

To date the Commission has signed InvestEU guarantee agreements for a total value of EUR 
21 billion. On the back of these guarantee agreements, the EIF has already signed InvestEU 
guarantee agreements  with  48 financial intermediaries from 19 Member States for EUR 2.3 
billion lending to European SMEs and small mid-caps, and 54 agreements with funds from 14 
Member States for equity investments worth EUR 1.9 billion17.  

Examples of InvestEU-supported investments by the EIB and the EIF in the area of clean 
technology: 

  A EUR 37 million investment by the EIB in a p-CAM (precursor cathode active material) 

16 EIB boosts clean energy financing in support of REPowerEU Plan. Press release available at: 
  https://www.eib.org/en/press/all/2022-450-eib-boosts-clean-energy-financing-in-support-of-repowereu-plan  
17  In  addition,  by  December  2022  the  EIB  had  signed  agreements  for  29  operations  in  9  Member  States  for 
EUR 2.3 billion  under  InvestEU  for  financing  projects  in  research  and  innovation,  as  well  as  in  sustainable 
infrastructure and also for social investment and skills. 

11 

 
 
 
 
                                                           
commercial  demonstration  production  plant.  P-Cam  is  used  in  the  supply  chain  of 
electric vehicle batteries (high tech lithium-ion battery cells). 

  A  EUR  315  million  loan  by  the  EIB  to  a  joint  venture  for  technology  and  product 
developments  of  hydrogen  automotive  propulsion  technologies,  and  active  safety 
systems.  

  A EUR 32 million investment by the EIB in support of R&D projects of a manufacturing 
company  in  electrification  technologies  for  agricultural  machinery  and  power 
transmission systems for tractors and off-road vehicles.  

  A EUR 101 million guarantee by the EIF to a fund in support of early-stage technology 
companies  (venture  capital),  high  growth  potential  industrial  companies;  and 
decarbonisation  sector  companies  (renewable  energy  projects  and  sustainability 
companies). 

  A EUR 125 million loan to a greenfield production facility for cathode materials. The 
cathode  materials  will  be  supplied  to  battery  manufacturers  of  high-tech  lithium-ion 
batteries that are primarily used in electric vehicles. 

To ensure a timely delivery on the objectives of the Green Deal Industrial Plan, InvestEU 
procedures,  should  be  simplified,  and  its  products  aligned  to  current  needs.  Guarantee 
agreements  and  financial  products  need  to  be  aligned  with  the  revised  state  aid  framework, 
while specific provisions of the GBER will significantly simplify state aid aspects for national 
compartments  in  InvestEU.  The  Commission  will  continue  to  work  with  the  EIB,  the  EU’s 
bank, and other partners to address in an efficient and timely way the financing needs of priority 
projects, such as IPCEIs. 

Funding through InvestEU is heavily frontloaded, as the biggest part of the funding comes 
from NextGenerationEU. By end 2023 EUR 14.83 billion of the EU guarantee needs to be 
committed, leaving only EU 11.37 billion for the period 2024-2027. At the same time, one can 
expect a significant increase in the demand for InvestEU support, given the revised eligibility 
conditions  foreseen  under  the  forthcoming  Temporary  Crisis  and  Transition  Framework 
(TCTF).  In  particular,  lifting  current  financing  limitations  on  manufacturing  projects  in  the 
areas covered by the TCTF would give rise to an increased demand and use of the EU guarantee 
by implementing partners. Therefore, the Commission is assessing how the overall funding for 
InvestEU could be increased, in particular for the period covering 2024 until 2027.  

Innovation Fund 

The Innovation Fund supports the development and first-of-a-kind deployment of technologies 
and solutions that decarbonise energy intensive industry, boost renewable energy and energy 
storage (including batteries and hydrogen) and strengthen net-zero supply chains by supporting 
the manufacturing of  critical  components for batteries, wind and solar energy, electrolysers, 
fuel cells and heat pumps. Over the decade, an estimated EUR 40 billion will be available under 
the Innovation Fund.   

The revised and upgraded Emission Trading System directive, as agreed at the end of 2022 as 
part of the Fit for 55 package,  allows the Innovation Fund to subsidise, through competitive 
bidding, 100% of the funding gap for scaling up clean tech deployment and manufacturing. The 
Innovation Fund can thus act as a European one-stop-shop for such support, thereby reducing 
the difficulties for investors in stacking different revenue streams and funding sources.  

The  Commission  will  launch  in  autumn  2023  a  first  auction  –  or  competitive  bid  -  for 
supporting the production of renewable hydrogen. Winners of this auction will receive a 
fixed premium for each kg of renewable hydrogen produced over a period of 10 years. This will 

12 

 
  
have a similar impact as the production tax credit in the US IRA, the difference being that the 
premium,  based  on  the  received  bids,  will  make  EU  support  cost-effective,  fast  and 
administratively  light.  Terms  and  conditions  for  this  first  pilot  auction,  with  an  indicative 
budget of EUR 800 million, will be announced in June 2023. This pilot auction will be followed 
by further auctions or other forms of support for hydrogen production and use that contribute 
towards  the  REPowerEU  hydrogen  targets,  thereby  covering  the  EU  domestic  part  of  the 
Hydrogen Bank.  

Further building on this experience, the Commission considers extending the new competitive 
bidding mechanism for scaling up manufacturing of components for solar and wind energy, 
batteries and electrolysers, based on an analysis of EU net-zero sector needs, market sizing, and 
potential  project  pipeline.  Also  here,  the  Innovation  Fund  support  would take  the  form  of  a 
production subsidy, instead of the 60% share of relevant cost that is the current practice of the 
Fund.  

The EU emission trading system revenues will increase in the coming years. The greater part 
of this amount will constitute national revenues that Member States must use for climate action. 
The Commission encourages Member States to devote a share of those revenues to scaling up 
manufacturing  of  net-zero  technologies.  A  share  of  the  increased  ETS  revenues  could  also 
underpin  the  reinforcement  of  an  efficient  EU  net-zero  investment  vehicle,  such  as  the 
Innovation Fund.18 

Numerous  funds  are  thus  available,  mostly  geared  to  innovation  and  deployment.  The 
Commission is exploring avenues to achieve greater common financing at EU level to support 
investments in manufacturing of net-zero technologies, based on an ongoing investment needs 
assessment  Delivering  on  a  comprehensive  European  approach  will  be  essential  in  order  to 
preserve the Single Market from fragmentation and realise maximum synergies and scale. The 
Commission  will  work  with  Member  States  in  the  short  term,  with  a  focus  on  the  afore-
mentioned  instruments  –  REPowerEU,  InvestEU  and  the  Innovation  Fund  -  on  a  bridging 
solution to  provide fast and targeted support where it is  most needed, in  complement to  the 
temporary and targeted state aid changes outlined above. While the operationalisation of these 
different  elements  may  not  come  at  the  same  time,  we  are  committed  to  deliver  on  this 
comprehensive European approach. 

For the mid-term, the Commission intends to give a structural answer to the investment needs, 
by proposing a European Sovereignty Fund in the context of the review of the Multi-annual 
financial framework before summer 2023. The aim is preserving a European edge on critical 
and emerging technologies relevant to the green and digital transitions, from computing-related 
technologies,  including  microelectronics,  quantum  computing,  and  artificial  intelligence,  to 
biotechnology and biomanufacturing and net-zero technologies. This structural instrument will 
build on experience of coordinated multi-country projects under the IPCEIs and seek to enhance 
all  Member  States’  access  to  such  projects,  thereby  safeguarding  cohesion  and  the  Single 
Market against risks caused by unequal availability of state aids. The Commission will work 
with  Member  States  in  the  design  of  the  Sovereignty  Fund  to  ensure  that  it  addresses  their 
respective needs. 

18 This is without compromising the overall ETS revenues available for the repayment of the NGEU debt 

13 

 
 
                                                           
2.2.3 Private funding 

By far the greater part of the investments needed for the net-zero transition will have to 
come from private funding. Public funding can crowd-in private investments, but it will 
not be sufficient to close the investment-gap needs. For successful net-zero transformation, 
we need vast amounts of private-sector financing in particular, financing raised through capital 
markets  from  a  broad  range  of  investors,  including  small  retail  investors  as  well  as  big 
institutional ones. Well-functioning capital markets and the sustainable finance framework 
are thus essential. The EU must ensure that its capital markets can support the necessary volume 
and variety of funding for EU companies, in particular in strategic industrial segments.  

The  EU  must  intensify  its  efforts  to  create  a  fully  developed  Capital  Markets  Union 
(CMU). The CMU aims at increasing the size of individual capital markets and their cross-
border  integration  to  improve  financing  and  investment  opportunities  for  individuals  and 
companies, including those operating in the clean tech sector.  

A deeper and truly integrated single market for capital would provide EU companies the means 
to finance themselves, to scale up and become less dependent on bank financing and to obtain 
financing  to  manage  the  green  transition.  Advancing  the  Capital  Markets  Union  is  thus  an 
essential  contribution  to  the  Commission’s  political  objectives  of  green  and  digital  global 
competitiveness of European firms and the EU’s open strategic autonomy.  

Achieving a fully integrated EU capital market requires greater ambition and commitment from 
all key stakeholders in reaching swift agreement on the Commission’s legislative proposals 
implementing the 2020 CMU Action Plan.  

The EU sustainable finance framework supports investors and businesses efforts to scale 
up their investments  that would be aligned with  the European Green Deal  targets.  EU 
sustainable-finance policies will support the green transition by making private funding of green 
projects  and  companies  easier  to  obtain  and  more  attractive,  as  recalled  in  the  Renewed 
Sustainable Finance Strategy19. 

2.3.  Enhancing Skills 

The  green  transition  must  be  people-centred  and  inclusive  to  ensure  equitable  and  just 
outcomes, generating quality jobs and leaving no-one behind. The European economy counted 
4.5 million green jobs in 201920 up from 3.2 million in 2000. The green transition will amplify 
demands for new skills at all levels, requiring a large-scale up-skilling and re-skilling of the 
workforce. The battery industry alone estimates it will need an extra 800 000 workers by 2025. 
In the next decade, there will be fierce competition for talents. The productivity of our industry, 
the prosperity of our society and our ability to meet the net-zero objectives will depend on our 
ability to retain and attract workers. This is why the third pillar of the Green Deal Industrial 
Plan  must  focus  on  skills  -  green  and  digital,  at  all  levels  and  for  all  people,  with 

19 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52021DC0390  
20 Based on Eurostat definition of green jobs (‘Employment in the environmental goods and services sector’)., 
Eurostat ‘Environmental economy - statistics on employment and growth”, data,  
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Environmental_economy_%E2%80%93_statistics_on_employment_and_growth&old
id=583805#Development_of_key_indicators_for_the_environmental_economy.  

14 

 
 
 
 
 
 
                                                           
inclusiveness of women21 and youth22 at the heart of the Plan. 
Demand for talent is acute. Labour shortages, as proxied by the vacancy rate,23 have doubled in 
sectors considered key for the green transition24 between 2015 and 2021 and green transition 
technical skills are in growing demand25. As it is estimated that between 35% and 40% of all 
jobs would contribute to the twin transition, technical - including digital - skills requirements 
and  education  levels  in  the  green  economy  outpace  the  economy  overall26.  Overall  labour 
productivity is higher in the green sectors, with for example productivity in the clean energy 
sector about 20% higher than on average across the economy, rendering green skills even 
more important for future prosperity.27 

The EU is taking action to address skills related challenges posed by the twin green and digital 
transition through its overarching framework - the European Skills Agenda , which runs in 
synergy with the European Education Area28. The European Pact for Skills, which recently 
celebrated its second anniversary, supports 14 large-scale partnerships in European industrial 
ecosystems  helping  them  to  equip  the  workforce  with  the  skills  necessary  for  the  transition 
towards a carbon-neutral and digital economy. The partnerships promote coordinated action by 
companies, workers, public authorities, social partners, education and training providers and 
employment services. Over 1,000 members have so far signed up, including large multinational 
companies,  SMEs,  local  training  providers,  and  chambers  of  commerce.  Collectively,  they 
have  pledged  to  help  upskill  and  reskill  6  million  people.  In  addition,  the  Clean  Energy 
Industrial Forum commits to stepping up efforts and investments in the development of skills.  

The Digital Education Action Plan, the Digital Decade and the Structured Dialogue for Digital 
Education and Skills that took place in 2022 have prepared the ground for speeding up actions 
in reforming education systems and the provision of basic and advanced digital skills across the 
economy and at all ages. This provides a strong starting point to ensure that the society and 
businesses alike, can use digital skills for more precision and efficient use of natural resources, 
for a more positive impact on the environment. 

The recent Communication on  harnessing talents in Europe’s regions  supports  policies to 
help acquire and develop the skills required for the green transition in all EU regions29. 

The European Year of Skills 2023 is a unique opportunity to develop the skills needed to 
thrive in a rapidly changing economy and to step up efforts. It is time for the EU and its Member 
States to be bolder and more ambitious in bringing about step changes in the education and 

21 Female employment rate was 69.5% in Q2 2022 compared to 80.2% for men and 74.9% on average. Employment 
rate of people aged between 60 to 64 was 48.2% compared to 74.9% on average for the age group 20-64. 
22 Whilst the unemployment rate decreased to a record-low 6,0% in November 2022, youth unemployment (under 
25 years) stands at 2,5 times of general unemployment.  
23 Vacancy rate is the proportion of empty vacancies in the total number of vacancies and is considered as one of 
the best possible measures to indicate labour shortage in a sector.  
24  These  sectors  include  the  electricity,  steam,  gas  and  air  conditionings,  transportation,  construction  and 
Manufacturing sectors. Data for the Water supply, sewerage, waste management and remediation activities sector 
that is also regarded as key for the transition are unfortunately not available at the EU level. 
25 Based on the narrow Eurostat definition of green jobs (‘Employment in the environmental goods and services 
sector’). Labour shortages, as proxied by the vacancy rate, have doubled in sectors considered key for the green 
transition between 2015 and 2021. 
26 
https://www.ilo.org/wcmsp5/groups/public/---ed_emp/documents/publication/wcms_732214.pdf  
27 JRC Clean Energy Technology Observatory (CETO): Overall Strategic Analysis of Clean Energy Technology– 
2022 Status Report: https://publications.jrc.ec.europa.eu/repository/bitstream/JRC131001/2022.5375.pdf 
28 COM (2022) 625 
29 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of Regions, Harnessing talent in Europe’s regions, COM(2023)32 final. 

2019:  Skills 

overview, 

available 

greener 

future: 

global 

report 

ILO 

for 

at: 

a 

a 

15 

 
                                                           
skills agenda, and to implement opportunities presented by the EU framework30: 

  The  Commission  is  working  with  Member  States  to  set  targets  and  indicators  to 
monitor supply and demand in skills and jobs in the sectors relevant for the green 
transition. A gender gap continues to prevail in the net- zero technologies sector. For 
example, women are under-represented in vocational and higher education in Science, 
Technology, Engineering, and Mathematics (STEM) sub-fields that are highly relevant 
for the energy sector.31 In the renewables sector, women account only for one third of 
the workforce32, so there is a clear opportunity for harnessing female talent there.  
  The  Commission  is  working  with  Member  States  and  the  higher  education  sector  to 
implement the European strategy for universities33, which plays a key role in ensuring 
future-proof  skills.  The  EU  provides  substantial  financial  support  for  this  purpose, 
including through the Erasmus+ European Universities initiative (EUR 1.1 billion). 
  Furthermore, we need to attract, and retain top talent to Europe, especially in Science, 
technology, engineering, and mathematics (STEM). We need to open new pathways for 
international STEM students and researchers to come to Europe. 

  A  large-scale  skills  partnership  for  onshore  renewable  energy  under  the  Pact  for 
Skills will be established by February 2023. The partnership will identify commitments 
and  targets  and  develop  a  vision  of  concrete  upskilling  and  reskilling  needs  for  the 
renewable energy sector in Europe.  

  A Heat Pumps skills partnership will be established by the end of this year and efforts 

are under way to create a skills partnership on energy efficiency. 

  Modelled on the European Battery Alliance Academy34, the Commission will propose 
to  establish  Net-Zero  Industry  Academies  to  roll  out  up-skilling  and  re-skilling 
programmes  in  strategic  industries  for  the  green  transition,  such  as  raw  materials, 
hydrogen and solar technologies, The Commission will initiate an Academy to offer on- 
and offline trainings for sustainable construction with a focus on the use of biobased 
materials, circularity and digital technologies.  

Validation  of  skills,  alongside  efforts  to  support  the  recognition  of  qualifications  across 
Member  States  and  from  third  countries,  as  well  as  labour  mobility  policies,  can  facilitate 
matching people’s skills to employers’ needs. People learn in multiple ways and in different 
contexts outside of formal education and training structures. In order to support this: 

  As  part  of  the  EU’s  Skills  Agenda,  the  Commission  will  facilitate  recognition  of 
qualifications.  This  could  allow  for  a  “fast  track”  to  recognition  and  reduce 
administrative by supporting  quick authentication of qualifications by employers and 
training providers.   

  The  Commission  will  further  consider  how  to  combine  a  ‘Skills-first’  approach 
recognizing actual skills with existing approaches based on qualifications, in the 
interests of EU mobile citizens and third-country nationals. 
In particular, to attract talent from outside the EU, the Commission is examining a skills-

 

30 For example: micro-credentials, individual learning accounts, digital skills and education recommendations. 
31 This translates to lower share of patent applications with women inventors (only 20% in all patent classes in 
2021  and  just  over  15%  for  climate  change  mitigation  technologies),  lower  share  of  start-ups  founded  or  co-
founded by women (less than 15% in the EU in 2021), and lower amounts of capital invested into women-led 
companies (only 2% in all-female start-ups and 9% in mixed teams in the EU in 2021). Source: CETO: Overall 
Strategic Analysis of Clean Energy Technology in the European Union – 2022 Status Report   
32 32% in 2019, according to the Clean Industry Energy Forum, Joint declaration on skills in the clean tech sector, 
https://commission.europa.eu/system/files/2022-06/ceif_joint_statement_on_skills.pdf 
33 COM (2022) 16 
34 The European Battery Academy will train, reskill and upskill approximately 800 000 workers by 2025. 

16 

 
                                                           
based approach to facilitate access of third country nationals to EU labour markets in 
priority sectors through the development of an EU Talent Pool and present a proposal 
on recognition of qualifications of third-country nationals. 

More  can  be  done  to  support  people  in  acquiring  new  skills.  The  EU  has  robust  policy 
frameworks  to  financially  support  skills  development,  with  Council  Recommendations 
supporting a number of skills reforms in the areas of individual learning accounts and micro-
credentials,  to  quality  and  effective  apprenticeships  and  vocational  education  and  training. 
Making these policy reforms deliver concrete results in a coordinated fashion across Europe 
requires both public and private funding to align, which could include: 

  The  General  Block  Exemption  Regulation  ceiling  for  aid  to  SMEs  for  training  will 

increase from EUR 2 million to EUR 3 million. 

  Measures providing opportunities to skill workers as part of an IPCEI will be taken into 

account in assessing state aid compliance of such projects.35  

  To  stimulate  increased  investment  in  training  in  new  net-zero  technologies  and 
production processes, the Commission will explore the treatment of training expenditure 
by companies as an investment rather than as an expense or operating cost.  

EU  funding  is  also  available.  The  Multiannual  Financial  Framework  2021-2027  and 
NextGenerationEU support investments of around EUR 64.8 billion in skilling, re-skilling and 
up-skilling.36 Out of those EUR 64.8 billion, cohesion policy, through the  European Social 
Fund + (ESF+) is the main EU instrument to support investments in skills and is making EUR 
5.8 billion available for green skills and green jobs. European Regional Development Fund 
(ERDF)  complements  ESF+  with  investments  in  skills,  education  and  training,  including 
infrastructure. The Just Transition Mechanism (JTM) supports with EUR 3 billion training 
and skills development of workers to adapt to the green transition. 

The Recovery and Resilience Facility is providing a significant financial support. 14 Member 
States are including measures for training on green skills and jobs in their national Recovery 
and Resilience Plans that, together, amount to around EUR 1.5 billion. 

2.4.  Trade and resilient supply chains 

The EU welcomes initiatives conducted across the world on the road to climate neutrality and 
environmental sustainability. The goal of net zero can be best achieved if net-zero technologies 
incentives are underpinned by principles of fair competition and open trade. The fourth pillar 
of the Green Deal Industrial Plan consists of global cooperation and making trade work 
for the clean transition.  

The EU draws competitive and political strength from being a trading powerhouse. The EU 
remains  an  attractive  destination  for  global  investment.  We  would  have  not  achieved  our 
resilience  and  overcome  the  challenges  of  the  past  years  without  the  efficiencies  that  trade 
brings and the win-win partnerships we developed with third countries. At the same time, an 
increase in unfair and coercive practices have required us to develop new tools and enforce our 

35 Point 18 of the Guidelines on IPCEIs: Communication from the Commission - Criteria for the analysis of the 
compatibility  with  the  internal  market  of  State  aid  to  promote  the  execution  of  important  projects  of  common 
European interest - OJ C 528, 30.12.2021, p. 10–18.   
36  European  Social  Fund  +,  Erasmus,  Horizon  Europe,  European  Regional  Development  Fund,  Digital  Europe 
Programme, Recovery and Resilience Facility and the Just Transition Fund. 

17 

 
 
 
 
                                                           
rights,  in  order  to  maintain  a  level  playing  field37.  Altogether,  this  reflects  the  EU’s  drive 
towards Open Strategic Autonomy. 

Trade openness is an essential element of our strategy to maintain the EU’s position as a 
leader in net-zero technologies. Trade policy keeps the Single Market connected to growth poles 
outside of our continent while securing access to the inputs critical for the green transition. On 
the one hand, open trade creates opportunities for our industry by opening new export markets 
and creating economies of scale. On the other hand, it provides access to raw materials, parts, 
components as well as services that our industry needs, given that two-thirds of our imports 
consists of intermediates.  

The EU will work with its partners to promote stability in international trade and strengthen 
legal  certainty  for  investors  and  companies  by  continuing  to  support  the  World  Trade 
Organization (WTO), including through its reform. The WTO has a role in supporting climate 
neutrality by providing a forum for deliberations on trade aspects of the green transition, by 
clarifying how to promote green investments in a manner that minimises trade distortions, as 
well as by reinforcing disciplines on subsidies that negatively impact both trade and the climate.  

The Commission will also continue to advance the EU’s network of Free Trade Agreements, 
while  making  the  most  of  those  already  in  place  through  effective  implementation  and 
enforcement. In particular, the Commission will work to conclude negotiations with Australia 
by  summer  2023  and  make  significant  progress  with  India  and  Indonesia,  while  exploring 
possibilities with other partners in the Indo-Pacific. The Commission will also put forward for 
ratification the agreements with Chile, Mexico and New Zealand and seek to make progress 
with Mercosur. The Commission will also aim to finalise its Economic Partnership Agreement 
with Kenya. 

The  Commission  will  support  the  clean  transition  by  continuing  to  develop  other  forms  of 
cooperation  with  partners,  beyond  more  traditional  trade  agreements.  The  Trade  and 
Technology Council with the US, and that under preparation with India, establish a new tool 
for  cooperation.  Through  the  work  of  the  dedicated  EU-US  Task  Force  on  the  Inflation 
Reduction Act, the EU and the US are working towards pragmatic solutions to EU concerns, 
with  a view to  maintaining and  reinforcing Transatlantic value chains  and ensuring positive 
cooperation on the shared interest to achieve net-zero.  

The EU has developed Sustainable Investment Facilitation Agreements (SIFA) in particular 
with  partners  in  Africa,  in  order  to  make  it  easier  to  attract  and  expand  investments  while 
integrating environment and labour right commitments. Climate and energy is a key area for 
partnerships under Global Gateway, the EU’s contribution to narrowing the global investment 
gap worldwide. Moreover, the EU will support developing countries in their efforts to adapt 
and comply with the EU’s autonomous sustainability requirements. The EU will further develop 
its  policy  dialogue  and  concrete  actions  on  research  and  innovation  with  the  Union  for  the 
Mediterranean and the African Union to promote co-operation on renewable energies and green 
hydrogen38. The Commission proposes that investments in other key partnership areas such as 
digital or transport should be further aligned with the goal of net-zero. The Commission will 
continue  to  support  sustainable  investments  in  energy,  transport  and  digital  connectivity 
through the implementation of Economic and Investment Plans for the Western Balkans, the 
Eastern Partnership and the Southern Neighbourhood. 

37 This requires, along other things, strengthening the EU’s capacity to control and protect the EU border, which 
is a key objective of the upcoming Customs reform. 
38 The EU has launched under Horizon Europe a dedicated “Africa initiative” and a  “Mediterranean Initiative”, 
each with a total EU investment of around EUR 300 million. 

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A number of new initiatives will also be developed: 

  We will work with like-minded partners to establish a Critical Raw Materials Club to 
deliver on a secure, sustainable and affordable global supply of raw materials essential 
to  our  green  and digital  transition  with  a  competitive and diversified industrial base. 
Building on existing international initiatives, the Club will develop principles to bring 
together raw material ’consumers' and resource-rich countries and foster co-operation 
to allow resource-rich developing countries to move up the value chain.  

  We  will  develop  Clean  Tech/Net-zero  Industrial  Partnerships39  promoting  the 
adoption  of  net-zero  technologies  globally  and  supporting  the  role  of  EU  industrial 
capabilities in paving the way for the global clean energy transition.  

  We will develop an export credits strategy including an EU export credit facility and 
enhanced  coordination of  EU  financial  tools.  These  can  foster  coherence  with  EU 
policies such as the European Green Deal or Global Gateway which pledged to invest 
in infrastructures aligned with pathways towards net-zero emissions. 

Openness only thrives where fairness survives. Countries around the world have developed 
new initiatives to support the green transition. Where the public footprint in private markets is 
outsized,  distortions  create  an  unlevelled  playing  field  and  unfair  competition  emerges.A 
particular concern exists in respect of non-market economies. The EU wants to lead a robust 
response to address these trends.  

In the first place, the Commission will continue to make full use of trade defence instruments 
(TDI)  to  defend  the  Single  Market  from  unfair  trade  practices  like  dumping  and  distortive 
subsidies, with a focus on sectors that are key for achieving the EU’s net-zero goal. We will 
also take further steps to ensure that our measures are not circumvented. 

As  green  incentives  proliferate  around  the  world,  the  Commission  will  ensure  that  foreign 
subsidies  do  not  undermine  the  competitiveness  of  the  European  industry  unfairly.  The 
Regulation  on  Foreign  Subsidies  entered  into  force  on  12  January  2023  and  provides  an 
additional tool to investigate subsidies granted by third countries, by considering their specific 
impact  in  the  internal  market.  The  EU  will  also  work  with  partners  to  identify  and  address 
distortive subsidies or unfair trading practices relating to IP theft or forced technology transfer 
in non-market economies, such as China. 

The Commission will also promote reciprocity for access to public procurement markets. The 
Commission stands ready to deploy the International Procurement Instrument for the first 
time  in  2023,  in  order  to  make  the  case  for  the  EU  companies  to  have  equal  access  to 
procurement markets in third countries. 

Finally, at the time of rising geopolitical tensions, the EU and its Member States should act 
together  to  defend  their  interests.  The  EU  framework  for  screening  of  foreign  direct 
investment  enables  effective  coordination  to  safeguard  key  European  assets  and  protect 
collective security. We are reviewing the functioning of the mechanism and assessing how its 
effectiveness can be further improved without jeopardizing our openness to FDI. At the same 
time, we will coordinate with allies, including in the work programme on economic security 
put  forward  by  Japan,  which  holds  the  Presidency  of  the  G7.  The  EU’s  Anti-Coercion 
Instrument  will,  once  adopted,  provide  proper  tools  to  rapidly  respond  to  economic 
intimidation. 

39 As developed by the Coalition of trade ministers for climate: 
  https://ec.europa.eu/commission/presscorner/detail/en/IP_23_248 

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3.  CONCLUSIONS 

The EU remains an attractive destination for sustainable investments. The European Single 
Market over the last 30 years has delivered very significant economic benefits, raising annual 
EU  GDP  by  8-9%  on  average.40  The  European  business  model  is  based  on  openness,  the 
European social model provides education, social protection of workers, as well as health and 
environmental  protection.  We  offer  a  business-friendly  environment  (e.g.  quality  of 
infrastructure,  rule  of  law).  Together  with  fair  competition  and  an  unparalleled  regulatory 
framework geared towards the twin digital and green transitions, this is helping to provide the 
necessary predictability for investors.  

The  Green  Deal  Industrial  Plan  aims  to  simplify,  accelerate  and  align  incentives  to 
preserve the competitiveness and attractiveness of the EU as an investment location for 
the net-zero industry. Together, the EU and its Member States can send a strong signal to 
business, while also accelerating the twin transitions. 

In  the  short  term,  and  especially  facing  unfair  competition  against  the  background  of  high 
energy prices, temporary and targeted additional measures are warranted to support European 
industry. The regulatory environment has to be adapted for a new reality. It should be simpler 
and faster to better serve the objectives of the EU towards a sustainable net zero economy and 
society.  

This  Communication  is  a  further  step  in  the  implementation  of  the  Versailles  Agenda41.  It 
presents the Commission’s response to the short-term challenges European industry is facing. 
The Commission will also heed the European Council’s call to present before its March meeting 
a broader strategy to boost long-term competitiveness in the Single Market, as it celebrates its 
30th anniversary. The Commission also calls on Member States for agreement on the Economic 
Governance Review. 

The  Commission  stands  ready  to  support  industry  and  society  in  its  transition  towards 
sustainability,  promoting  investments  in  new  technologies  and  providing  funding  where 
possible and necessary. Investments in a skilled population require training and education to be 
a crucial part of our future. Because we live in an interconnected world and because the green 
transition is a reality beyond the EU’s borders, the Commission will keep engaging and working 
with our trade partners, in an open but assertive approach.  

The Commission calls on leaders, governments, lawmakers and social partners to support 
the implementation of this plan and is ready to translate it into concrete proposals based 
on the ongoing needs assessment before the March European Council. 

40 Discussion Paper 094: Quantifying the Economic Effects of the Single Market in a Structural Macromodel 
(europa.eu), Jan in’t Veld, 2019. 
41 Informal meeting of the Heads of State or Government, Versailles Declaration, 11 March 2022. 

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