COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTE OF THE REGIONS The Clean Transition Dialogues - stocktaking A strong European industry for a sustainable Europe
Date: 2024-04-10
Institutions: European Commission, Secretariat-General
Subjects: European industrial area, carbon neutrality, clean technology, competitiveness, industrial infrastructure, investment, modernisation of industry, production policy, renewable energy, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 10.4.2024  COM(2024) 163 final  COMMUNICATION FROM THE COMMISSION  TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTE OF THE REGIONS The Clean Transition Dialogues - stocktaking       A strong European industry for a sustainable Europe  
 
 
1. 

INTRODUCTION 

Transforming Europe into a clean, resource-efficient, fair and competitive economy was one 
of the key priorities set out by the Commission at the beginning of the mandate. To reach this 
goal  and  turn  Europe  into  the  first  climate-neutral  continent  in  the  world,  the  Commission 
presented, in 2019, the European Green Deal. This initiative has been followed by a range of 
concrete  proposals,  the  majority  of  which  have  now  been  enshrined  in  law.  In  2023,  the 
Commission followed up with the publication of a Green Deal Industrial Plan. The focus must 
now shift to shaping a tailor-made implementation.  

In  this  context,  the  European  Commission  is  also  strongly  committed  to  strengthen 
Europe as a business location and destination, with a strong domestic manufacturing base 
built on diversified supply chains for the strategic commodities and inputs it requires. With the 
right accompanying policies, Europe’s transition to climate neutrality and a circular economy 
creates clean growth, new business models and markets, high quality jobs and technological 
development. Total net greenhouse gas (GHG) emissions were 32.5% lower in 2022 than in 
19901 while the economy has grown by 67%2 and – thanks to the European ETS - over EUR 
175 billion in revenues has been generated over the last decade alone. Moving forward, the EU 
will  need  to  mobilise  investments  and  generate  significant  economic  growth.  To  this  end, 
preserving and fostering the EU single market remains essential. 

Recent geopolitical developments have strengthened the case for a clean, resource-efficient 
and  competitive  economy.  Russia’s  aggression  against  Ukraine  has  underlined  our  need  to 
achieve resilience and reduce dependencies from unreliable partners.  

The global call at COP28 to transition away from fossil fuels, and the global pledge to triple 
renewable energy capacity and double energy efficiency improvements by 2030, have shown 
the international commitment to the clean transition and the need for Europe to stay the course. 
With the right set of policies, Europe will benefit from the global uptake of clean energies and 
technologies. While leading international efforts in the development of renewable energy and 
other  clean  technologies,  the  EU  will  continue  to  contribute  to  green  and  clean  transition 
globally, including through the Global Gateway investment strategy and trade relations.  

2. THE CLEAN TRANSITION DIALOGUES 

Europe’s industry has a key role to play in the transition of Europe’s economy. At the same 
time, it is coming under pressure because of the worsening security, geopolitical, and economic 
context.  This  is  aggravated  by  actions  undertaken  by  some  third  countries  such  as  massive 
foreign subsidies and local content requirements abroad, which can lead to unfair competition 
and trade distortions. A clear example is the deployment of net-zero technologies which are 
the focus of strong geostrategic interests and a global technological race, where the right 
policy and investment mix is key for Europe’s future. In addition, high  energy costs in 
the EU, insufficient access to finance and diffusion of new technologies, low tolerance for 

1 Climate Action Progress Report 2023.  
2 Estimate from AMECO database (European Commission, DG ECFIN), real GDP. 

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failure among companies, as well as undue regulatory burdens and red-tape present serious 
risks for the competitive sustainability of European industry. 

To address these concerns and to strengthen the Commission’s engagement with industry and 
social partners, President von der Leyen announced in the 2023 State of the Union a series of 
Clean Transition Dialogues3. Their core aim is to support industry in building its business 
model  fit  for  a  decarbonised  economy.  This  Communication  takes  stock  of  these 
Dialogues  and  gives  input  for  building  blocks  that  can  contribute  to  a  reinforced 
industrial approach for a sustainable Europe.  

The Dialogues, just like the Val Duchesse Social Partner Summit4 and the discussions at the 
Antwerp  Industrial  Summit5,  showed  that  industry  and  social  partners  are  strongly 
committed to the climate goals and engage in shaping and implementing the European 
Green Deal. They also showed our industry’s steadfast commitment to prosper in Europe 
while creating growth by accessing global markets and through diversified value chains. 

At the same time, stakeholders voiced growing concerns about the lack of a level playing field 
globally, the risks of carbon leakage and insufficient access to finance. The Dialogues showed 
that policy instruments should be modelled to address those concerns. Dialogue participants 
also  highlighted  the  need  to  strengthen  the  business  case  for  a  resource-efficient  and 
competitive  economy,  and  the  importance  of  the  Single  Market  and  market  incentives,  in 
addition to targets and regulation. Social partners highlighted the importance of ensuring the 
social fairness of the transition, to create good quality jobs and anticipate its effects on people, 
consumers and the workforce,  as well as the need for reinforced structured social dialogue, 
including in industrial policy making.  

These insights confirm the need for a reinforced industrial approach, building on the EU’s 
industrial  strategy  and  the  Green  Deal  Industrial  Plan,  allowing  Europe  to  reach  three 
objectives  at  the  same  time:  climate  neutrality  by  2050,  increased  competitiveness  and 
resilience of our industry, and a transition that is socially fair and inclusive. 

The  Dialogues  emphasised  a  few  building  blocks  that  will  contribute  to  that  reinforced 
industrial  approach:  (1)  an  effective  and  simplified  regulatory  framework  for  businesses  to 
deliver  on  the  transition;  (2)  action  on  energy  prices;  (3)  modern  infrastructure;  (4)  easier 
access to finance; and (5) a stronger Single Market in a globally competitive environment. 

3.  DELIVERY THROUGH EFFECTIVE IMPLEMENTATION AND SIMPLIFICATION 

The EU has delivered the policy and regulatory framework to achieve the 2030 targets and 
to keep Europe on track towards climate neutrality and a sustainable economy by 2050. A clear 

3 The following Clean Transition Dialogues took place: 10 October 2023: Hydrogen; 30 November 2023: Energy-
intensive; 22 February 2024: Clean-tech; 23 February 2024: Critical raw materials; 26 February 2024: Grean Deal 
infrastructure; 14 March 2024: Forest and Forestry owners; 15 March 2024: Cities; 22 March 2024: Steel industry; 
8 April 2024: Clean mobility. 
4  https://commission.europa.eu/news/val-duchesse-summit-eu-and-social-partners-commit-strengthening-social-
dialogue-2024-01-31_en 
5 https://antwerp-declaration.eu/ 

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regulatory  framework  creates  stability  and  predictability,  which  are  key  for  driving 
investments,  especially  in  net  zero  technologies.  As  the  clean  transition  enters  its 
implementation phase, the focus must now be on a swift and uniform application of the agreed 
framework across all EU Member States, also by updating and monitoring the National Energy 
and Climate Plans.  

What gets measured gets done. Building on its various Single Market and Competitiveness 
Reports and Scoreboards, and without creating any new reporting obligations for industry, the 
Commission will publish on a dedicated platform a limited set of key indicators to monitor, 
measure and present in a clear way the competitiveness of the Single Market and the progress 
of the  clean industrial  transition.  It will cover areas such as  GHG  emission reductions,  and 
enabling factors such as job creation and a skilled workforce, especially in energy-intensive 
industries, energy costs, energy efficiency, deployment of zero and low carbon energy and fuel 
sources, as well as infrastructure development and circularity. It could also rely on information 
regarding progress in achieving benchmarks on domestic manufacturing capacity and reuse in 
the sectors covered by the Net Zero Industry Act (NZIA), and the Critical Raw Materials Act 
(CRMA), mobilisation of investments to finance the clean transition, as well as diversifying 
supply chains in the strategic sectors. Such an overview will help policymakers to decide on 
actions  needed  to  improve  and  speed  up  the  application  of  the  agreed  framework,  thereby 
supporting industry in leading the transition.6  

Given the comprehensive legislative framework adopted under this mandate, the Commission 
will provide guidance to facilitate the application of EU legislation in support of industry, 
third countries and Member States, especially those with weaker administrative capacity, or 
with specific challenges on spatial planning, to reach the European Green Deal targets.  

Ease  of  doing  business  in  our  Single  Market  strengthens  delivery  on  the  transition.  The 
Commission will build, under the Single Market Obstacle Tool and the Single Digital Gateway, 
a  dedicated  digital  platform  to  identify  obstacles  in  the  Single  Market,  more  clearly, 
especially those to deployment of clean technologies across our continent. Industrial actors, 
social  partners  and  other  stakeholders  can  use  this  information  to  suggest  possible 
improvements to the existing regulatory framework, to remove obstacles that slow down 
investments  and  hamper  the  business  case  for  their  projects,  or  point  to  regulatory 
inconsistencies. The platform would operate on a voluntary basis and would not create new 
reporting requirements for industry. 

At the same time, the Commission will continue enforcing European legislation to create a 
Single Market  with simplicity for businesses, also by taking  corrective actions followed by 
infringement procedures when necessary.  

Simplification of the framework by removing undue regulatory burdens should be Europe’s 
rolling commitment. This Commission will further focus on burden reduction and its ongoing 
actions,  such  as  reducing  burden  from  reporting  requirements  by  25%  without 
undermining its policy objectives. The Commission has made progress with 41 initiatives to 
rationalise  reporting  requirements,  that  were  presented  in  the  2024  Commission  Work 
Programme. To sustain this effort and prepare the ground for future action, the Commission 

6 It is noted that the findings of the European Monitor of Industrial Ecosystems (SWD(2024)77  final), can also 
provide an additional basis for evidence-based policy action.  

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prepared  targeted  rationalisation  plans,  which  will  be  reported  upon  in  the  upcoming 
Commission’s Annual Burden Survey. The Commission will also explore making better use of 
digitalization and new technologies, such as AI and geospatial data, to see where reporting by 
businesses  can  be  replaced  by  data  obtained  through  other  means,  thus  cutting  burdens  for 
businesses.7  

In  addition,  the  Commission  will  support  industry  to  address  the  skills  gap8,  which  has 
become a serious bottleneck for the industry’s clean transition9. This requires a strong focus by 
Member States to identify the skills gap and work with industry and social partners to mobilise 
actions to address them in accordance with the Action Plan to reduce skills and labour shortage 
10. 

An effective and simplified enabling framework for a competitive sustainable economy often 
starts  at  local  and  regional  level.  Cities  are  key  players  in  delivering  the  objectives  of  the 
Green Deal on the ground, as demonstrated by the Covenant of Mayors and the EU Mission on 
‘Climate-Neutral and Smart Cities’, which involves 100 EU cities committed to reach climate 
neutrality by 2030, representing 12% of the EU’s population. To speed up the implementation 
of the Green Deal and to foster our industrial strength, the Commission will further work on 
identifying key value chains, lead markets, and demand aggregation opportunities with a strong 
anchor on the regional and local level, leveraging Cohesion Policy decarbonisation investments 
in EU Member States and regions. 

This collaborative approach will continue to be supported through industrial alliances.  

4.  ABUNDANT AND AFFORDABLE CLEAN ENERGY 

Participants in the Dialogues stressed that securing the supply of abundant and affordable zero 
and  low-carbon  energy  is  a  key  condition  to  accelerate  the  decarbonisation  of  the  EU 
economy and preserve the competitiveness of the European industry. To get there, and in 
full respect of Member States’ right to decide on their energy mix, Europe will need all zero 
and  low-carbon  energy  sources  and  flexibility  technologies  as  well  as  efficient  and 
integrated energy markets. Energy efficiency improvements, and the uptake of sustainable 
and efficient products can continue to lower the energy costs, and guarantee a cost-effective 
transition. 

Thanks  to  the  unprecedented  efforts  of  citizens,  industry,  Member  States  and  the  EU,  the 
situation on the EU energy market has stabilised11. However, energy prices continue to affect 

7 In this transition, the Single Digital Gateway will continue to facilitate the reduction of administrative burden 
for companies, providing a centralized platform to access information, administrative procedures, and assistance 
across all Member States. 
8 Under the European Pact for Skills, 3,5 million workers have already been trained to make sure the green and 
digital transition creates quality jobs in Europe. 
9 The EU has already made available EUR 5.8 billion for substantial investments in green skills and green jobs. 
10 COM(2024) 131 final of 20 March 2024 
11 Gas and electricity prices are gradually approaching their level from summer 2021, while the EU dependency 
on Russian gas fell from 45% in 2021 to 15% in 2023. The EU has diversified its gas supplies and has successfully 
reduced energy demand. 

4 

 
 
 
  
 
the competitiveness of the EU industry. EU electricity industrial retail prices are 2 to 3 times 
more expensive than in the US (2021 to 2023) while historically they were 1.5 - 2 times the US 
prices.  Gas  prices  are  3  to  6  times  higher  than  those  in  the  U.S,  compared  to  2-3  times 
historically. This requires a thorough discussion involving all EU institutions, Member States 
and stakeholders on how Europe can achieve the phase-in of clean energy and phase-out of 
fossil fuels in an affordable and competitive manner for Europe, notably by rewarding early 
movers towards clean energy and energy efficiency whilst bridging the potential funding gap 
when there is a market failure. 

The Dialogues reconfirmed that this is of particular importance for energy intensive industries 
but also for the clean tech and transport12 sectors, both being critical for stimulating growth 
and  creating  jobs  in  Europe.  Indeed,  certain  industrial  and  transport  sectors  have  called  for 
additional  innovative,  transitory  measures  that  secure  energy  at  lower  prices,  while 
providing  certainty  to  energy  producers  through  long-term  off-take.  Furthermore, 
participants also noted that a reduction of network fees paid by energy intensive industries 
that are pursuing decarbonisation strategies could lower their energy costs. Going forward, this 
may  warrant  a  discussion  at  European  level  on  network  tariff  setting  methodologies  with  a 
specific  focus  on  energy  intensive  industries,  in  line  with  the  EU  acquis.  Additionally, 
participants underlined the importance of taking additional actions at EU level to faciliate the 
production and uptake of sustainable alternative fuels. 

The  full  benefits  of  the  energy  transition  will  only  materialise  when  zero-  and  low-carbon 
technologies will more permanently replace fossil fuels, and when major investments in grids, 
storage and flexibility are completed. The roll-out of zero and low carbon energy sources 
must accelerate. Member States should make full use of the potential provided by the new 
rules, including by rapidly transposing the Renewable Energy Directive, removing barriers to 
the conclusion of power purchase agreements and accelerating permit-granting for renewables, 
their connection to the grid, and their manufacturing. Making use of this potential may require 
strengthening administrative capacity, including by ensuring appropriate staffing and financing 
of permitting authorities. The Technical Support Instrument stands ready to support Member 
States in improving permitting systems. At the same time, in relation to wood-based bioenergy, 
it would be important to implement the new sustainability criteria for the use of woody biomass 
and avoid support schemes that create distortive effects on the rapidly expanding bioeconomy 
sector. 

To master the transition, industry called for the creation of industrial clusters13, that connect 
the  largest  manufacturing  facilities  and  hubs  with  zero  and  low  carbon  generation  plants, 
hydrogen and renewable- and low-carbon fuels producing facilities, or carbon capture, storage, 
transport  and  utilisation  infrastructure.  Clustering  industrial  activity,  in  line  with  EU 
competition rules, could help suppliers of net-zero technologies and renewable energy to scale 

12 The successful transition to sustainable mobility depends on access to clean energy and access to feedstocks. In 
particular, the maritime and aviation sectors will need considerable amounts of renewable and low-carbon fuels, 
as supported by the Renewable and Low-Carbon Fuels Value Chain Industrial Alliance. Developing production 
of those fuels will diversify our energy supply while improving our industrial competitiveness. The EU will ensure 
continued regulatory predictability to incentivize  investments in the production of the  necessary feedstocks to 
scale-up such innovative fuels on the European market in the next decade. 
13 Such as hydrogen valleys and net-zero acceleration valleys. 

5 

 
 
 
up their operations and improve their commercial viability by supplying several industrial off-
takers within a cluster, while manufacturing industry could decarbonise their operations at a 
lower cost by securing access to clean technologies and sharing costs, overall building a strong 
business case. Moreover, in line with recent COP conclusions and the Commission’s proposal 
to review the Energy Taxation Directive, Member States need to take measures eliminating 
subsidies for using fossil fuels, including in the form of tax exemptions or reduced rates. 
Fossil fuel subsidies amounted to EUR 56 billion in the EU in 2021 and to EUR 123 billion in 
2022.14  More  than  half  of  fossil  fuel  subsidies  do not  have  a  fixed  end  date  in  19  Member 
States15. 

Graph 1: Fossil fuel subsidies as share of GDP and their planned end date 

Source: European Commission. 

Participants in the Dialogues called on Member States to reconsider the level of taxes and 
levies  on  energy,  including  electricity.  Reducing  them  would  have  the  potential  to  bring 
electricity prices down by around EUR 10-20 per MWh for industrial customers on average in 
the EU, with significant additional potential in Member States with a high level of taxes. At 
the same time, energy taxation plays a direct role in supporting the green transition by sending 
the  right  price  signals  and  providing  the  right  incentives  for  sustainable  consumption  and 
production. Changes to their level should be designed in full consistency with decarbonisation 
objectives, and taking into account any distributional and fiscal impacts.  

14 https://www.eea.europa.eu/en/analysis/indicators/fossil-fuel-
subsidies#:~:text=Fossil%20fuel%20subsidies%20remained%20relatively,and%20Russia's%20invasion%20of
%20Ukraine. 
15 Austria, Belgium, Bulgaria, Cyprus, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Lithuania, 
Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Sweden.  

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Graph 2: Electricity prices – share of taxes and levies  

Average of taxes/levies in the electricity price in the first half of 202316 

Source: EUROSTAT (nrg_pc_205) - Electricity prices for non-household consumers Band IC 

5.  MODERN INFRASTRUCTURE AS A BACKBONE FOR INDUSTRY 

Energy,  digital  and  transport  infrastructure  is  critical  for  Europe’s  economic  security 
and the long-term competitiveness of our industry. The scale of the challenge, however, is 
unprecedented. In this decade alone, the cross-border electricity transmission capacity should 
double.  To  serve  the  growing  zero-emission  vehicle  fleet,  a  four-fold  increase  in  publicly 
accessible electric recharging infrastructure and additional hydrogen refuelling infrastructure 
is  needed  by  2025,  compared  to  2020.17  Connecting  this  electromobility  infrastructure  and 
other  network  users  requires  a  substantial  modernization  and  expansion  of  electricity 
infrastructure, particularly at distribution level. 40% of distribution grids in the EU are more 
than 40 years old, a clear sign that urgent investment in smartening and flexibility solutions as 
well as grid expansion are needed.18 The length of planning, tendering, and permitting for these 
investments needs to be reduced. Delays in developing the infrastructure come with a hefty 
price tag of billions of euros, notably in the form of curtailed renewables generation and higher 
energy prices.  

16 Negative values indicate that the electricity price after taxes and levies is lower than before as a result of Member 
States’ subsidies via tax alleviation and/or the tax accounting methodologies in Member States.  
17 Commission Communication: A strategic rollout plan to outline a set of supplementary actions to support the 
rapid deployment of alternative fuels infrastructure, https://eur-lex.europa.eu/legal-
content/en/TXT/?uri=CELEX%3A52021DC0560 
18  Commission  Communication:  Grids,  the  missing  link  –  An  EU  Action  Plan  for  Grids,  https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52023DC0757 

7 

 
 
 
 
 
 
The EU already supports the development of the infrastructure needed for the clean transition. 
But to ensure a more European approach and timely completion of the necessary investments, 
including for security, with better integrated long-term planning between energy, transport and 
data. Closer coordination is urgently needed between the Commission, Member States, local 
and  regional  authorities,  network  operators,  industrial  actors,  regulators  and  financial 
institutions. The Commission will analyse and where needed adjust the existing formats to 
provide a platform for a regular and direct engagement with all key actors, with a focus on 
concrete infrastructure projects, including cross-sectoral projects 

Dialogue participants also raised the important mismatch between the significant upfront 
investment costs of infrastructure development, and available funds. Private investment 
has not been sufficiently mobilised. Given the limited resources of public funding instruments 
such as the Connecting Europe Facility, public support should be well targeted and designed 
to  unlock  private  investments.  For  energy  the  Commission  will  intensify  discussions  with 
industry, national regulators and system operators as well as social partners on how flexibility 
solution and demand response can effectively complement investments in infrastructure and 
reduce  capital  expenditure,  as  well  as  how  grid  users,  and  notably  power  generators  could 
contribute to the funding of required investments, while avoiding additional pressure on energy 
prices. For transport, the blending of grants and loans under the Alternative Fuels Infrastructure 
Facility of the Connecting Europe Facility are relevant to trigger investments while limiting 
competition  distortions  in  the  internal  market.  Synergies  between  energy  and  transport 
investments could be further explored to facilitate infrastructure financing.  

As part of an ambitious clean infrastructure agenda, the EU should also remain a global leader 
in the manufacturing of cables, pipes, turbines, electrolysers, transformers, and technologies 
for vehicle recharging and refuelling, and other key components. The swift implementation of 
the  Grid  Action  Plan,  including  long-term  visibility  of  projects  and  common  product 
specifications  will  be  instrumental.  The  Commission  will  therefore  consider  supporting 
industry in developing demand standardisation for cables, pipelines and technologies necessary 
for the development of the energy grid. Resilience requirements applicable to procurement and 
auctions  will  help  create  demand  for  EU-made  equipment  and  components  that  meet  high 
standards set for use in infrastructure development.  

6.  UNLOCKING FINANCE FOR THE TRANSITION 

The  Communication  on  the  EU's  2040  climate  target19  and  the  accompanying  impact 
assessment estimate the total cost of investment associated to the economic sectors needed for 
the clean transition, as a whole, at around EUR 1.5 trillion per year between 2031 and 2050. 

19 COM(2024) 63 final 

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Given  that  the  important  share  of  this  cost  would  occur  even  without  clean  transition  the 
additional investment would be lower20, and is estimated at some 660 billion per year. 21  

The private sector  will continue to play a leading role in deploying investment in the clean 
transition and scaling up of innovative companies. Strengthening the capital markets union 
and mobilising venture capital, pension funds, private equity, and sovereign funds are 
necessary  for  injecting  more  financing  into  the  Europe’s  clean  economy.  Less  than  30 
percent of European firms’ funding comes from tradable equity and debt, compared to nearly 
70  percent  for  US  firms.22  Achieving  a  deep  and  integrated  Capital  Markets  Union  may, 
according to some estimates, generate 470 billion euros per year in investment, including in 
the  clean  transition23.  The  Commission  will  also  continue  enhancing  the  usability  of  the 
sustainable finance framework, with a view to maximising its impact. Instruments like carbon 
removal  certification  or  biodiversity  credits  can  promote  new  business  models  and  reward 
stakeholders for nature-based solutions. Participants in the Dialogues also stressed the need to 
reduce  the  cost  of  raising  capital,  diversify  funding  options  for  businesses,  propose  new 
innovative financial tools, and facilitate cross-border investing.  

Wider availability of risk sharing tools is and will continue to be needed, an area where the 
European Investment Bank (EIB) has an important role to play given its firepower and ability 
to pull private banks and investors. At the national level, National Promotional Banks should 
be leveraged. The Commission will also consider how risk-sharing tools, guarantees, credits 
and insurances provided by Member States, for instance via export credit agencies could 
serve as cost-effective way to support the industry’s clean transition, addressing market failures 
and securing additional access to private funding.  

The Commission should strengthen the political engagement and dialogue with the institutional 
actors, including the EIB, the European Bank for Reconstruction and Development (EBRD), 
international  financial  institutions  and  private  banks  to  ensure  the  enabling  conditions, 
including  investment  guarantees,  for  the  rapid  mobilisation  of  private  finance  and  ensuring 
inflow of new capital urgently needed for the clean transition.  

Even with the stronger engagement of private markets, market failures are likely to remain in 
certain areas, requiring a discussion on stronger, targeted and innovative public financial 
support. This can provide bridge financing and effectively share investment risk, in order to 
crowd 
in  key 
decarbonisation technologies.  

trigger  strategic  make-or-break 

in  private  finance  and 

investments 

Around 35% of the greenhouse gas emissions reduction that must be achieved by 2050 are 
deemed to be dependent on solutions that are currently only at the demonstration or prototype 

20  Indeed,  an  important  share  of  these  costs  would  have  to  be  born  even  without  the  clean  transition,  but  the 
structure of the expenses would be different. For example, investments in the energy system will be aimed at 
scaling up decentralised domestic renewable energy production instead of paying a bill for imported fossil fuels. 
21  The  Impact  Assessment  accompanying  the  2040  Climate  Target  Communication,  combining  the  additional 
investments into the energy system (production and users of energy) and additional investments into transport. 
22  Haver  Analytics  and  IMF  staff  calculations.  https://www.imf.org/-/media/Files/News/Speech/2023/imf-
background-note-on-cmu-for-eurogroup.ashx 
23  New  Financial:  Driving  growth:  how  EU  capital  markets  can  support  a  post-Covid  recovery, 
https://newfinancial.org/report-eu-capital-markets-a-post-covid-recovery/ 

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stage24, underlining the importance of funding for research and innovation (R&I), including 
through Horizon Europe, as well as for the scale-up and deployment of existing solutions.  

The Commission has pledged to mobilise unprecedented support of EUR 1 trillion for the 
clean  transition  for  the  2021-2030  period25.  This  includes  EUR  578  billion  for  climate 
mainstreaming by the EU Budget and NextGenerationEU. Under the Recovery and Resilience 
Facility, over EUR 202 billion are dedicated to the climate transition, with EUR 110 billion 
targeted  to  the  decarbonisation  of  industry  and  clean  tech  (incl.  EUR  23  billion  for  R&D 
initiatives)  and  more  than  EUR  2  billion  for  developing  green  skills  and  jobs  for  the  clean 
economy. Cohesion Policy supports Member States’ transition to a climate-neutral and clean 
economy with EUR 93 billion in 2021-2027. The Just Transition Fund (JTF) focuses EUR 19 
billion of investment specifically for the transformation of the regions with coal and carbon-
intensive industry most affected by the green transition.  The InvestEU Programme has  also 
been instrumental in mobilising private financing in green priority areas in cooperation with 
public partner institutions, although its capacity is falling short compared to the high demand 
for its products.  

Important  financing  is  provided  from  auctioning  of  allowances  under  the  Emissions 
Trading System (ETS). Over the last decade, the revenues from the European ETS amounted 
to over EUR 175 billion. From 2024 to 2030, depending on the carbon price and other factors, 
the EU ETS may generate around EUR 220 billion, with an additional EUR 113 billion over 
2027-2030  coming  from  the  newly  created  emissions  trading  system  on  buildings,  road 
transport and additional sectors. The Commission proposed in June 2023 that 30% of revenues 
generated  by  EU  emissions  trading  would  accrue  to  the  EU  budget26,  contributing  to  the 
financing of the EU budget with its focus on sustainable investments. A strong EU budget is 
needed to deliver higher quality investments and in this context the Commission urges swift 
progress  on  both  the  issue  of  innovative  ways  to  use  public  funds  to  crowd  in  private 
investment, as well as the proposed ETS own resource. 

More specifically, around 10% of the ETS allowances issued in 2021-2030 are dedicated to the 
EU’s  two  flagship  financing  programmes,  i.e.  the  Innovation  Fund  and  the  Modernisation 
Fund. Calls organised under the  Innovation Fund have an oversubscription rate of up to  20 
times the available funds. Industrial actors have flagged the need to increase the budget of the 
Innovation Fund and further simplification of the rules, including to support green scale ups 
and start ups across industry, transport, circular economy and energy sectors.  

Furthermore, a greater share of ETS revenues could flow back to support decarbonisation. 
Member States currently spend on average around 75% of their revenues on climate and 
energy purposes, which under the revised ETS Directive will need to increase to 100%. This 
offers vast opportunities to scale up support to industry .  

24 ‘Net Zero Roadmap; a global pathway to keep the 1.5°C goal in reach’, IEA, 2023 update. 
25 COM/2020/21 final 
26  This  excludes  the  revenues  for  the  innovation  fund  and  revenues  related  to  the  initial  endowment  for  the 
Modernisation Fund and the allowances used for REPowerEU. 

10 

 
 
 
Graph 3: ETS revenues spent on climate and energy purposes by Member States 

Based on reported usage, in million euro 

Source:  European  Environmental  Agency,  https://www.eea.europa.eu/en/analysis/indicators/use-of-auctioning-revenues-
generated#:~:text=Total%20auctioning%20revenues%20generated%20under,and%20the%20Modernisation%20Fund%20(
EUR3 

Also  for  access  to  public  funds,  simplicity  means  better  delivery.  Dialogue  participants 
considered access to EU funds to be complex and lengthy due to different eligibility criteria, 
application procedures, and red tape. They underlined the challenge of navigating the different 
EU and national funds, especially for SMEs. They called on the EU to make access to public 
funding simpler and faster and to explore ways to link EU funding with available local 
and regional finance, building on the updated Funding & Tenders Portal27. 

The  Strategic  Technologies  for  Europe  Platform  (STEP)  is  a  crucial  initiative  to  boost 
investments in Europe’s critical technologies across digital, deep tech, clean tech, and biotech 
for an estimated investment potential of up to EUR 50 billion. The Commission will as a matter 
of priority launch the STEP Sovereignty Portal in the second quarter of 2024 and will enhance 
its functionalities over time. It will consolidate information on EU funding options for STEP 
investment  areas  and  support  project  promoters  in  identifying  the  best  EU  funding 
opportunities  for  their  business  needs.  The  next  MFF  represents  an  opportunity  to  further 
streamline the EU financial landscape and strengthen synergies across programmes to better 
support the clean transition.  

As part of this workstream, the Commission will also assess how EU funding and financing 
could  be  accelerated.  The  average  level  of  commitments  and  spending  on  climate 
mainstreaming under the EU funds amounts to some 30% of the available budgets for the 2021-
2027 period. This is especially relevant for clean tech and decarbonisation projects as their long 

27 https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/home 

11 

 
 
 
 
 
lead times require early financing and funding to ensure these investments can still effectively 
contribute to meeting the 2030 target.  

According to the participants, to simplify access to national funding and create economies 
of scale, Member States should, in line with State aid rules, make more use of auctions-
as-a-service schemes, as pioneered under the 2023 pilot auction of the European Hydrogen 
Bank to which Germany allocated EUR 350 million for renewable hydrogen. These schemes 
are  an  innovative  way  to  accelerate  market  deployment  throughout  the  EU,  and  reduce  the 
administrative  burden,  including  by  facilitating  important  synergies  for  swift  State  aid 
clearance  of  the  schemes.  The  Commission  will  assess  how  the  concepts  of  auctions-as-a-
service  and  grants-as-a-service  can  be  expanded  to  other  policy  fields,  while  ensuring  that 
auctions  remain  sufficiently  competitive,  starting  for  example  with  the  Commission’s 
announced  support  to  European  manufacturers  of  the  most  sustainable  batteries  of  EUR  3 
billion tfor three years.  

On State aid, participants in the Dialogues frequently mentioned the example of the Temporary 
Crisis and Transition Framework (TCTF), including the provisions enabling Member States in 
exceptional cases to provide support to companies, where there is a real risk of investments 
being diverted away from Europe, up to the amount of support the beneficiary could receive 
for an equivalent investment in that alternative location (‘matching aid'), or the amount needed 
to incentivise the company to locate the investment in the EEA (‘funding gap'), whichever is 
the  lowest.  Some  of  the  participants  have  also  noted  that  the  existing  State  aid  framework 
should to a larger extent take due account of the external dimension including the existing 
and possible future multilateral commitments and rules on subsidies and the changing global 
security, economic and trade context. The Commission will continue to ensure that State aid 
rules  are  fit  for  purpose  in  light  of  all  relevant  factors  and  in  consultation  with  all  relevant 
stakeholders. 

Overall, there is an urgent need to coordinate funding more at EU level, to create economies 
of scale, to enhance the efficient allocation of resources, and make use of the single market, 
while taking into account cohesion policy objectives for a fair and inclusive transition. 

7.  LEVERAGING  THE  CLEAN  SINGLE  MARKET  IN  A  GLOBALLY  COMPETITIVE 

ENVIRONMENT 

The global clean transition represents a major geostrategic and geoeconomic challenge. 
It  is  at  the  same  time  an  unprecedented  opportunity  for  the  EU  to  be  one  of  the  leaders 
shaping the global market for mass-manufactured clean technologies and become the world’s 
largest  sustainable  marketplace.  With  the clean  tech  market  projected  to  triple  to  an  annual 
worth of around EUR 600 billion globally by 203028, it provides ample business opportunities. 
The EU’s international partnerships can support the EU clean tech industry, including SMEs, 
to unlock new business opportunities worldwide. By leveraging its single market, the EU can 

28 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52023PC0161 

12 

 
 
 
 
 
pool demand, and build long-lasting strategic international partnerships to secure diversified 
supply of clean technologies.  

The Single Market is the EU’s greatest strength, as it provides scale and promotes a high 
level  of  standards  also  outside  Europe.  Further  efforts  are  taking  place  to  support 
standardisation as part of the EU standardisation strategy.  

Given that approximately EUR 2 trillion of public funds, representing 14% of GDP, is spent 
every year through the public procurement process, strategic public procurement is a key tool 
to create markets for net zero, circular and clean technologies and business solutions and 
to reward companies that invest in innovative and sustainable technologies and manufacturing 
with the best sustainability footprint, while creating quality jobs. Resilience and sustainability 
provisions  under  European  legislation29  already  allow  such  opportunities,  which  should  be 
followed by a thorough discussion on how public procurement can, in practice, be deployed 
more strategically to unlock investment to cement competitive sustainability in Europe. 

Another useful tool is the joint purchase of strategic commodities on the global markets. 
Based  on  the  positive  result  of  demand  aggregation  and  joint  purchase  of  medical 
countermeasures  in  the  health  sector  and  gas  in  the  energy  sector,  the  Commission  will 
consider  developing  demand  aggregation  and  joint  purchasing  for  other  strategic 
commodities, while implementing the pilot for hydrogen under the Hydrogen Bank and 
organising the joint purchasing of critical raw materials. This would help European buyers 
to secure supply of these strategic commodities at affordable prices on a global market, thereby 
supporting  efforts  by  European  manufacturers  and  suppliers  to  scale  up  their  production 
capacity and reduce the time lag for rolling out key clean technologies. The Commission will 
explore  further  ways  for  industrial  actors  willing  to  engage  in  various  cooperation  models, 
including by forming consortia, to jointly negotiate better conditions from global producers, 
with  important  safeguards  for  encouraging  the  transfer  of  benefits  to  end  users  and  the 
involvement of smaller companies in line with competition rules.  

The Net Zero Industry Act establishes a benchmark for EU manufacturing capacity for net-
zero technologies to reach at least 40% of expected EU demand by 2030. Member States 
should therefore make full use of the new provisions on permitting, non-price criteria in public 
procurement,  resilience  auctions,  and  renewable  energy  auctions.  Regulatory  measures, 
including market access rules based on carbon footprint, such as in the Batteries Regulation, 
or on a well-functioning Single Market for the collection and reuse of secondary materials, also 
have  an  important  role  to  play  to  ensure  that  sustainably  produced  products  gain  a  larger 
market-share. 

The EU will require substantial additional amounts of critical raw materials to meet the 
needs of the clean and digital transitions. Further reducing the EU’s dependence on critical 
raw materials requires the swift and full implementation of the Critical Raw Materials Act 
and  the  agreed  strategic  partnerships  and  overall  strengthening  the  circular  economy, 

29  For  instance,  the  NZIA,  the  Ecodesign  for  Sustainable  Products  regulation  or  the  Construction  Products 
Regulation. 

13 

 
 
 
making the maximum use of secondary materials and resources.30 As such, the EU supports 
industry  in  developing  domestic  and  international  critical  raw  material  value  chains  with 
partners in  third  countries. This  includes  using the opportunities under the Global Gateway 
strategy  and  Team  Europe's  approach  in  creating  sustainable  investments  value  added  in 
partner countries. The Commission, with the support of the European Raw Materials Alliance, 
will  also  strengthen  its  engagement  with  the  EIB,  the  EBRD,  dedicated  national  funds, 
commercial banks and financial institutions in view of stepping up financing for the strategic 
projects.  

Trade is one of the key drivers of the EU’s competitiveness. The EU draws economic and 
political strength from its position as the largest trader and investor: it is the world’s largest 
exporter, accounting for 16% of global exports. The EU is a promoter of, and thrives on, open 
and rules-based trade. EU trade policy is key both to protect the single market against unfair 
trade as well as to open markets for EU products and ensure access to inputs. It can also play a 
key role in enabling investment in raw materials and green energy in third countries  and in 
ensuring that those products can be exported to the EU, without restrictions imposed by third 
countries. The European industry is under growing pressure, as the playing field is increasingly 
distorted by unfair competition from certain third countries, and due to excessive dependencies 
in  strategic  sectors.  In  particular,  unprecedented  incentive  schemes  and  wide-spread  use  of 
subsidies favouring domestic industries provide significant advantages to businesses based in 
those countries.  

The  Commission  and  Member  States  should  make  full  use  of  policy  instruments  against 
unfair global competition, to ensure a level playing field on the internal market. This includes 
the  possibility  for  the  Commission,  under  the  Foreign  Subsidies  Regulation,  to  investigate 
subsidies granted by non-EU countries to companies engaging in any economic activity in the 
EU  and  redress,  if  needed,  the  distortive  effects  of  these  foreign  subsidies.  Similarly,  the 
Foreign Direct Investment (FDI) Screening Regulation31 allows for the assessment of security 
risks  of  FDIs.  EU  trade  agreements  also  aim  to  promote  renewable  energy  investments, 
including through access to energy grids, with a view to diversify sourcing and enable market 
access in third countries while preserving security of supply. 

In addition, actions, including trade measures should be considered and taken to protect the EU 
economy from unfair competition on international markets. In this context, early notification 
to the Commission by industry and Member States of potential distortions of the level playing 
field by third countries is of primary importance.  

Progress in global carbon pricing, remains essential. The EU and Member States should focus 
their collaborative efforts on convincing other economies to put a price on carbon. To this end, 
the Commission has created a Task Force, in February 2024, to deploy a more systematic global 
carbon pricing diplomacy.  

30 Materials represent 40–60 percent of the total input costs for EU manufacturing companies30 and widespread 
resource scarcity has led to increased costs for 37% of companies, as well as supply chain disruption for 27%, and 
slowdowns in production capacity for a quarter of industrial firms surveyed. 
31 Regulation (EU) 2019/452 establishing a  framework for the screening of foreign direct investments into the 
Union 

14 

 
 
 
Participants  of  the  dialogues  have  stressed  the  necessity  of  ensuring  the  proper 
implementation of the Carbon Border Adjustment Mechanism, which aims to support the 
EU  to  reach  its  environmental  objectives.  Before  the  end  of  the  transitional  period,  the 
Commission will carry out a broad review of CBAM, including an assessment of the risks of 
carbon leakage for goods produced in the Union intended for export to non-EU countries. This 
review  will  also  include  downstream  products  and  other  sectors,  including  international 
transport which compete globally and are exposed to the risk of carbon leakage. 

8.  CONCLUSION 

Climate protection, green growth and competitive sustainability go hand in hand. Clean 
technology  and  sustainable  production  are  and  have  to  remain  the  EU’s  competitive 
advantage. Now is the time to deliver and step up investment in a fair transition and in clean 
technology and sustainable production.  

This requires a reinforced industrial approach that ensures predictability for investors in an 
effective and simplified regulatory environment, allows movers to clean energy and fuels to 
benefit from competitive costs, delivers the necessary infrastructure, unlocks private and public 
investment,  strengthens  the  Single  Market  and  ultimately  improves  the  competitiveness  of 
European businesses and their ability to deliver on the European Green Deal. This will require 
a more collaborative approach through intensive dialogue with Member States, regional 
and local authorities, as well as industry and stakeholders.  

The Commission will continue its engagement with industry and social partners through 
the  Clean  Transition  Dialogues,  and  it  stands  ready  to  engage  in  a  thorough  debate  with 
Council and Parliament on the key factors that need to be addressed, and to work together on 
these with all stakeholders.  

15