COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation
Date: 2025-02-26
Institutions: European Commission, Secretariat-General
Subjects: EU financing, EU industrial policy, available energy, carbon neutrality, circular economy, clean technology, competitiveness, energy transition, renewable energy, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.2.2025  COM(2025) 85 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation   
 
 
1.  Introduction 

Europe’s industrial base is central to our identity and essential for our competitiveness. 
Our  continent  has  a  rich  industrial  heritage.  For  decades,  our  industries  have  been  at  the 
forefront of technological  progress. They  fuelled  economic growth and  sustained our social 
model. They now need a promising future, and Europe – with its many strengths – is the right 
place. It has the talents, the entrepreneurs, business owners, workers and consumers. It has the 
ability  to  drive  innovation  and  shape  global  progress.  And  it  has  a  strong  social  market 
economy  underpinned  by  a  predictable  legal  environment.  There  is  no  resilient  economy 
without a robust industrial component. 

However, Europe is grappling with rising geopolitical tensions, slow economic growth and 
technological  competition.  In  this  new  era,  it  is  clear  that  a  competitiveness  and 
decarbonisation  strategy  is  also  a  security  imperative.  The  EU  must  urgently  address  three 
challenges  at  once:  a  climate  crisis  and  its  consequences,  competitiveness  concerns  and 
economic  resilience.  As  the  Draghi  report1  and  the  Competitiveness  Compass2  highlight, 
decarbonisation policies are a powerful driver of growth when they are well integrated with 
industrial, competition, economic and trade policies. Our industries, particularly those facing 
high  energy  prices  and  fierce  global  competition,  are  facing  existential  challenges.  We  risk 
being outpaced by other major powers in terms of productivity growth. This calls for urgent 
action.  

This  is  why  Europe  needs  a  transformational  business  plan.  The  Clean  Industrial  Deal 
brings together climate action and competitiveness under one overarching growth strategy. It 
is  a  commitment  to  accelerate  decarbonisation,  reindustrialisation  and  innovation,  all  at  the 
same time and across the entire continent, also reinforcing Europe’s resilience. It must present 
European industry with a stronger business case for large climate neutral investments in energy 
intensive industries and clean tech. 

We aim to increase sustainable and resilient production in Europe. Europe has set out an 
ambitious  framework  to  become  a  decarbonised  economy  by  2050.  It  will  stay  the  course, 
including through the intermediate 2040 target of 90% net greenhouse gas emissions reduction. 
This framework can drive competitiveness, as it gives certainty and predictability to companies 
and investors alike. This will be achieved by nurturing competitive manufacturers who drive 
decarbonisation through  innovation,  create  quality jobs and contribute to  our  open strategic 
autonomy, fully respecting and applying the principle of technological neutrality for Member 
States as appropriate. 

The focus will be mainly on two closely linked sectors. Firstly energy-intensive industries, 
which require urgent support to decarbonise, electrify, as well as confront high energy costs, 
unfair global competition and complex regulations, harming their competitiveness. Secondly 
the  clean-tech  sector,  which  is  at  the  heart  of  future  competitiveness  and  necessary  for 
industrial transformation, circularity and decarbonisation. It is indispensable to act for both to 
reach our climate neutrality targets, absorb emissions and maintain water resilience and ensure 

1 https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en#paragraph_47059 
2 COM (2025) 30 

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we can produce the technologies of the future made in EU, and retain our ability to be solutions 
providers. 

Circularity will be a priority. It is the key to maximising the EU’s limited resources, reducing 
dependencies and enhancing resilience. It reduces waste, lowers production costs, lowers CO2 
emissions and creates a more sustainable industrial model that benefits the environment and 
enhances economic competitiveness. The ambition of the Clean Industrial Deal is to make the 
EU the world leader on circular economy by 2030. 

For a thriving new European industrial ecosystem of growth and prosperity, it is essential 
to move beyond traditional silo solutions and look at the entire value chain. There are six 
business  drivers:  (1)  affordable  energy,  (2)  lead  markets,  (3)  financing,  (4)  circularity  and 
access  to  materials,  (5)  global  markets  and  international  partnerships  and  (6)  skills.  These 
should  be  complemented  by  actions  on  horizontal  enablers  necessary  for  a  competitive 
economy: cutting red tape, fully exploiting the scale of the Single Market including through 
gradual integration of candidate countries, boosting digitalisation, accelerating the deployment 
of innovation, promoting quality jobs and better coordinating policies at EU and national level.  

The Clean Industrial Deal confirms the EU’s dedication to its climate goals by offering 
clear  business  incentives  for  industry  to  decarbonise within  Europe.  Europe’s  industrial 
base is central to our prosperity and essential for our competitiveness. The measures it proposes 
are the result of the  active engagement  of industry leaders, social  partners and civil  society 
through  the Antwerp  Declaration  for  a  European  Industrial  Deal  and  the  Clean  Transition 
Dialogues3.  Our  proposals  are  directly  tailored  to  their  needs.  At  this  pivotal  moment  for 
European  industry,  the  Clean  Industrial  Deal  aims  to  open  a  new  chapter  of  European 
industrial history defined by growth, resilience, and leadership on the world stage.  

2.  Access to affordable energy  

As  average  energy  prices  in  Europe  are  higher  than  those  of  our  trading  partners,  securing 
affordable  energy  is  a  key  condition  for  the  competitiveness  of  our  industry,  especially  for 
energy-intensive  sectors.  Access  to  affordable  energy  is  therefore  a  cornerstone  of  the 
Clean Industrial Deal. 

Europe’s  dependence  on  imported  fossil  fuels  is  the  main  cause  of  these  higher,  and  more 
volatile, energy prices. This situation has been exacerbated by the recent energy crisis and the 
weaponisation of gas supply by Russia. The current geopolitical and market uncertainty drive 
up investment costs which are passed on to consumers. 

In addition, more structural inefficiencies in the electricity system raise energy costs and have 
an impact  on  the energy bills  of European industries. Insufficient interconnections  and  grid 
infrastructure, as well as limited energy system integration and flexibility hinder the  further 
integration  of  cheaper  decarbonised  energy  sources  and  limit  the  EU’s  resilience  against 
threats. Digitalisation, including AI driven smart grids and IoT-based energy monitoring, will 
be key to ensure energy systems integration, supporting real-time grid management, improving 
demand-side  flexibility,  and  enabling  predictive  maintenance  for  critical  infrastructure. The 
EU must advance towards electrification and a fully integrated single market for energy.  

3 COM (2024)163 final 

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To reduce energy costs in the EU, we need to accelerate electrification, and the transition to 
clean,  domestically  generated  energy,  complete  our  internal  energy  market  with  physical 
interconnections,  and  use  energy  more  efficiently. We  need  to  deliver  on  a  genuine  Energy 
Union that benefits all. To do so, an Action Plan for Affordable Energy4 is adopted today. It 
includes measures to lower energy bills for industries, businesses and households in the short 
term, while speeding up necessary structural reforms. 

With  the  cooperation  of  Member  States  and  the  private  sector,  the Action  Plan  will  have  a 
transformative effect, respecting the principle of technology neutrality. The bulk of the Action 
Plan will be delivered already in 2025. Passing on the benefits of cheaper energy to end users 
will  support  the  industry's  business  case  to  invest  in  electrification  and  decarbonisation. 
Investors  also  want  certainty. The  National  Energy  and  Climate  Plans  are  essential  tools  to 
ensure EU target achievements and to support strategic investment. Moreover, Member States’ 
national strategies to achieve the 2030 climate and energy goals should be translated without 
delay into concrete action.  

In the Action Plan, three flagships  are particularly relevant to industry: (1) lowering  energy 
bills,  (2)  accelerating  the  roll-out  of  clean  energy  and  electrification,  with  completed 
interconnections and grids, as well as clean manufacturing, and (3) ensuring well-functioning 
gas markets.  

2.1. Lowering energy bills 

Lowering  the  cost  of  electricity  supply  starts  with  fully  implementing  the  reforms 
introduced in the recently adopted Electricity Market Design5 as well as with promoting 
energy  efficiency.  A  fast  increase  of  Power-Purchase Agreements  (PPAs),  including  cross-
border PPAs, and Contracts for Difference (CfDs) is key to making clean energy production 
more attractive for industrial users and final energy bills less dependent on volatile fossil fuels 
in short term markets.  

More can be done to support the uptake of PPAs. The Commission is launching today, with 
the European Investment Bank (EIB), a pilot programme for corporate Power Purchase 
Agreements (PPAs) for an indicative amount of EUR 500 million. Under this pilot, the EIB 
will  counter-guarantee  part  of  the  PPAs  undertaken  by  companies,  preferably  SMEs  and 
midcaps  as  well  as  energy  intensive  industries,  for  the  long-term  purchase  of  electricity 
generation. In line with the approach in the Electricity Market Design, the Commission will 
engage  with  the  EIB  to  promote  PPAs  in  a  technologically  neutral  way. The  EIB  will  also 
introduce  a  ‘Grids  manufacturing  package’  for  the  European  supply  chain  to  provide 
counter-guarantees to manufacturers of grid components, with an indicative amount of at least 
EUR 1.5 billion. This package will provide these businesses with needed certainty to ramp-up 
production. The EIB Group will continue to boost the pace  of energy investments, as it did 
recently under REPowerEU. 

The  Commission  will  simplify  State  aid  rules  by  June  2025  to  accelerate  the  roll-out  of 
renewable  energy,  deploy  industrial  decarbonisation  and  ensure  sufficient  capacity  of  clean 
tech manufacturing in Europe6. Fully recognising the Member States’ right to decide on the 

4 COM (2025) 79 final 
5 Directive (EU) 2024/1711; Regulation (EU) 2024/1747 
6 See section 4.3 for more details 

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energy  mix,  the  Commission  will  assess  the  State  aid  for  nuclear  supply  chains  and 
technologies  in  line  with  the  Treaty  and  with  respect  to  technological  neutrality.  The 
Commission  will  provide  guidance  to  Member  States  on  how  to  design  contracts  for 
difference, including their potential combination with PPAs, in line with State aid rules. This 
will be paired with the adoption by the Commission of new rules on cross-border forward 
capacity allocation by 2026. These rules will further empower large industrial consumers to 
secure the electricity production they need to operate. This will also contribute to developing 
forward markets and make for a more secure long-term supply of electricity. Furthermore, the 
Commission will seek Member States’ views on a clean flexibility instrument based on PPAs 
and  industry  committing  to  consume  clean  electricity,  while  designing  it  in  a  way  that 
sufficiently limits the risks of competition distortions and subsidy races in the Single Market, 
as required by State aid rules.  

Industrial  consumers  have  a  great  potential  to  adjust  demand  to  the  supply  of  cheap  clean 
energy, consuming more when prices are low and less when they are high. Providing products 
tailored to the needs of different industrial and other consumers could enable industries, on a 
voluntary  base,  to  make  immediate  savings  from  their  energy  bills.  The  Commission  will 
develop by Q4 2025 guidance to Member States and retailers on promoting remuneration 
of flexibility in retail contracts.  

As  a  first  step,  Member  States  should  urgently  conclude  the  negotiations  on  the  Energy 
Taxation  Directive7  to  make  the  tax  framework  more  conducive  to  electrification  and  not 
incentivise the use of fossil fuels. To provide short-term relief to industry, in particular energy-
intensive  industry  investing  in  decarbonisation,  Member  States  should  also  lower  taxation 
levels on electricity and eliminate levies that finance policies unrelated to energy. The Energy 
Taxation Directive allows  to  decrease electricity taxation down to  zero for energy intensive 
industries. In that regard, the Commission will issue a recommendation on how to effectively 
lower taxation levels in a cost-effective way. On network charges, the Commission will put 
forward a recommendation and guidance on a harmonised design of tariff methodologies 
for network charges, and considering their effectiveness, propose new legislation. 

An efficient network system ensures that energy flows from where it is produced to where it is 
needed, ensuring that everyone benefits from energy at the best cost. The Commission will put 
forward a European Grid Package to, among others, simplify Trans-European Networks for 
Energy,  ensure  cross-border  integrated  planning  and  delivery  of  projects,  especially  on 
interconnectors, streamline permitting, enhance distribution grid planning, boost digitalisation 
and innovation as well as increase visibility and prioritisation of manufacturing supply needs, 
also building on actions from the Grid Action Plan.  

As natural  gas is  overall  expected to  remain the main price-setter for electricity in  the next 
years in the EU, the Commission stands ready to support Member States when designing State 
aid  measures.  These  would  allow  Member  States  to  address  extreme  price  spikes  and 
exceptional  price  environments  and  to  decouple  the  translation  of  high  gas  prices  into 
electricity prices, based on proven models in emergency situations. 

7 COM/2021/563 final 

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2.2. Accelerating the roll-out of clean energy and manufacturing 

Energy-intensive industries need a steady and secure supply of clean and affordable energy. 
Cutting  permitting  times  for  the  deployment  of  grid,  energy  storage  and  renewables 
projects is essential. However, so far only seven Member States notified full transposition of 
the more streamlined permitting rules in the new Renewable Energy Directive. The effect on 
deployment in those countries has been clear and positive. All Member States should make the 
most  of  this  opportunity,  as  this  will  bring  more  cheap  electricity  to  the  system.  The 
Commission  will, as an  immediate deliverable, support  Member States in transposition and 
implementation  of  existing  energy  permitting  legislation.  It  will  share  best  practices  and 
recommendations and launch an implementation dialogue on energy permitting.  

Lengthy permit-granting procedures are also a major concern for energy-intensive industries 
that  want  to  electrify.  This  is  why  the  Commission,  in  the  upcoming  Industrial 
Decarbonisation Accelerator Act, will propose concrete measures to address permitting 
bottlenecks related to industrial access to energy and industrial decarbonisation, while 
maintaining environmental safeguards and protecting human health. These measures will build 
on  experience  acquired  through  the  Emergency  regulation  on  permitting8,  the  Renewable 
Energy Directive9, the TEN-E Regulation10, the Critical Raw Material Act11 and the Net Zero 
Industry Act (NZIA)12. For certain pre-defined acceleration areas, and in cases of overriding 
public interest, this can be eased by measures such as tacit approvals for certain administrative 
decisions in the permitting process where this principle exists in the national legal system and 
one-stop shops for developers. 

Digitalisation plays an important role in the permitting process. It can speed up procedures and 
give  greater  timing  predictability.  The  Commission  will  further  incentivise  the  use  of  data 
spaces, EU space-based data and services and AI to ensure that different data sets, including 
geological,  spatial,  natural  ecosystem  mapping or emissions data is  easily accessible by the 
national authorities facilitating the decision-making.  

2.3. Ensuring well-functioning gas markets that deliver  

The  price  of  imported  natural  gas  has  a  direct  impact  on  both  EU  gas  and  electricity 
prices.  To  reduce  price  volatility  and  speculation,  markets  must  function  properly.  Full 
regulatory oversight and close cooperation between energy and financial regulators is required 
to  prevent  market  manipulation  and  close  any  possible  loopholes  related  to  lack  of 
transparency, asymmetry of information and risk of market concentration. 

Earlier this month, the Commission  set  up a Gas Market Task Force to comprehensively 
scrutinise  the  EU  natural  gas  markets  and,  where  necessary,  take  actions  to  ensure  their 
optimal market functioning and prevent commercial practices distorting market-based pricing, 
learning from the lessons of the energy crisis. The Commission will launch a broad stakeholder 
consultation  to  assess  the  need  for  further  legislative  changes  to  ensure  full  and  seamless 

8 Council Regulation (EU) 2022/2577 
9 Directive (EU) 2023/2413 
10 Regulation (EU) 2022/869 
11 Regulation (EU) 2024/1252 
12 Regulation (EU) 2024/1735 

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strengthen  energy  and 

rules 
regulatory  oversight,  align  and 
(MiFID/REMIT13), and reduce the administrative burden on companies trading on financial 
markets for energy (single reporting). It will cover various aspects of the regulatory setup14, 
the joint supervisory approach by energy and financial regulators and the creation of a joint 
harmonised database of all relevant market-data with full access to all regulators. It will deliver 
a report by Q4 2025.  

financial  market 

In addition, better coordination among Member States and more  flexible filling trajectories, 
with  the  support  of  the  Commission,  can  help  to  reduce  system  stress  and  avoid  market 
distortions linked to gas storage refilling, supporting refilling at better purchasing conditions 
and security of supply. 

Flagship actions - Access to affordable energy and infrastructure 

Action Plan on Affordable Energy 

EIB pilot offering financial guarantees for PPA offtakers, with a focus on 
SMEs and energy-intensive industry  

Timeline 
Q1 2025 

Q2 2025 

Legislative proposal on the extension of the Gas Storage Regulation 

Q1 2025 

Clean Industrial Deal State aid framework 

Recommendation on network charges  

Industrial Decarbonisation Accelerator Act:  

Q2 2025 

Q2 2025 

•  Speed-up permitting for industrial access to energy and industrial 

Q4 2025 

decarbonisation  

Recommendation on energy taxation  

Guidance on CfD design, including on combining CfDs and PPAs 

Guidance on promoting remuneration of flexibility in retail contracts 

Q4 2025 

Q4 2025 

Q4 2025  

European Grids Package 
KPI – Increase economy-wide electrification rate from 21.3% today to 32% in 203015  
KPI - Annually install 100 GW of renewable electricity capacity up to 203016. 

Q1 2026 

13 Regulation (EU) 2011/1227; Directive (EU) 2014/65 
14 Including the parameters governing the application of the so-called ancillary activity exemption, the rules on 
circuit breakers and position limits, the requirements applying to trading venues and market participants, as well 
as certain aspects of the functioning of spot markets (e.g., the application of requirements similar to those of the 
financial rulebook to spot energy exchanges). 
15 Eurostat data, presented in SWD (2025) 11 final. 
16 Eurostat: 
https://ec.europa.eu/eurostat/databrowser/view/nrg_inf_epc__custom_15272393/default/table?lang=en 

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3.  Lead markets: boosting clean supply and demand  

Building a business case for decarbonised products  also requires concrete measures on 
the demand side. Businesses will only make the necessary investments if they are sure there 
is a market for their products. 

The Clean Industrial Deal will put the conditions in place for this demand to emerge. Creating 
lead markets  for  European  clean technologies  and products  will better  position  the EU as a 
global leader in the clean transition. It also increases its competitiveness in key clean sectors, 
offering guarantees for sustainable manufacturing of clean products and for employment. Lead 
markets  drive  economies  of  scale,  reduce  costs,  and  make  sustainable  alternatives  more 
accessible to consumers and businesses alike. This increased demand incentivises industries to 
accelerate their transition to cleaner and more circular production methods, reinforcing both 
environmental and economic benefits.  

The  new  measures  complement  the  roll-out  of  the  EU’s  long-standing  objective  to  create  a 
market  for  captured  carbon.  The  implementation  of  the  Industrial  Carbon  Management 
Strategy17, will build the business case for these permanent carbon removals to compensate for 
residual emissions from hard to abate sectors, including in the context of the review of the ETS 
Directive18 in 2026. Measures will be developed to acknowledge the use of captured carbon in 
a wider range of products, and prevent double counting of embodied carbon emissions, should 
waste  incineration  be  included  in  the  EU  Emission Trading  System  (ETS).  In  addition,  the 
Commission  will  support  the  acceleration  of  the  development  and  deployment  of  small 
modular reactors (SMRs). 

3.1. Non-price criteria in public procurement and incentives for private purchases 

Public procurement policies are a powerful instrument to help overcome barriers to market 
entry and to support sustainable and resilient industrial ecosystems, jobs and value creation in 
the EU. Targeted mandates and non-price criteria for sustainability, resilience as well as EU 
content  requirements  in  line  with  the  Union’s  international  legal  commitments  can  align 
national spending with the EU’s broader decarbonisation and competitiveness agenda, ensuring 
that public spending benefits, innovation, sustainability, prosperity and creation of high-quality 
jobs. This would also be a clear incentive for manufacturers to ramp up sustainable and resilient 
production. 

The  Industrial  Decarbonisation  Accelerator  Act  will 
introduce  resilience  and 
sustainability criteria to foster clean European supply for energy-intensive sectors. These 
criteria (e.g. clean, resilient, circular, cybersecure) will strengthen demand for EU-made clean 
products, building on the experience of the Net Zero Industry Act for clean tech, promoting 
innovation as well as EU environmental and social standards and ensure a level playing field. 
This  could  widen  the  application  of  non-price  criteria  to  the  EU  budget,  national  support 
programmes  as  well  as  public  and  private  procurement  benefitting  energy-intensive 
industries19.  

Beyond this short-term signal, the Commission will make a proposal to revise the Public 
Procurement Framework in 2026. This will allow for sustainability, resilience and European 
preference criteria in EU public procurement for strategic sectors. The revision will consolidate 

17 COM (2024) 62 final: This will require Member States to recognise capture projects as strategic in the context 
of the Net Zero Industry Act’s implementation and oil and gas companies to deliver the 50 million tonnes of 
CO2 storage capacity by 2030. 
18 Directive (EU) 2023/959 
19 See Industrial Decarbonisation Bank. 

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and clarify the interactions between public procurement provisions across different pieces of 
legislation, to simplify application by contracting authorities. All levels of administration, from 
national to local, should be able to use them. These criteria will also be extended to incentivise 
private procurement,  through measures  such as life  cycle-based CO2 emission performance 
standards. 

Private procurement has the potential to shape demand significantly. As is already the case in 
other regions of the world, and recommended in the Draghi report, the Commission will assess 
how to include requirements and non-price criteria in relevant product legislation, such as low-
carbon steel,  renewables or sustainable battery cells  for cars and  corporate fleets as  well as 
building  codes.  There  must  be  a  clear  link  between  incentives  for  decarbonisation  and 
circularity efforts by industry. Product labelling for industrial products, accompanied by the 
right incentives, is a powerful tool to speed-up the transition to decarbonised manufacturing 
and ensure that the manufacturers can reap the “green premium” and generate a return on their 
decarbonisation  investments.  Linking  this  label  to  public  procurement,  will  encourage 
manufacturers to use it.  

The  Industrial  Decarbonisation Accelerator Act  will  develop  a  voluntary  label  on  the 
carbon  intensity  of  industrial  products,  while  avoiding  duplication,  based  on  a  simple 
methodology with ETS data and building on the CBAM methodology. This should be the basis 
for further engagement with international work on measuring carbon intensity. In the interest 
of speed, the Commission will start with steel in 2025. This will be based on existing reporting 
from industry. A label for cement will be created under the Construction Products Regulation20, 
and a standardisation request will shortly be lodged. Such labels will allow industrial producers 
to distinguish the carbon intensity of their industrial production and to benefit from targeted 
incentives,  e.g.  for  clean  steel.  They  could  also  be  used  by  Member  States  to  design  tax 
incentives and other support schemes in line with State aid rules.  

In parallel, the Commission will continue working on developing comprehensive life-cycle 
assessments,  building  on  the  Industrial  Decarbonisation Accelerator Act’s  voluntary  label 
where relevant. Labels will equally benefit consumers to see the carbon footprint of relevant 
products thanks to existing legislation (e.g. Ecodesign for Sustainable Products Regulation21, 
Construction Products Regulation and sectoral legislation such as batteries or buildings). 

Strengthening  these  decarbonisation  incentives  also  requires  addressing  the  proliferation  of 
different carbon accounting methodologies in the EU and internationally, which are a cause for 
confusion for EU companies leading the development of cleaner products. The Commission 
will work to simplify and harmonise carbon accounting methodologies and identify by Q4 
2025  priority  areas  and  possible  avenues  for  simplification,  harmonisation  and  robust 
verification.  

3.2. Promote the uptake of renewable and low-carbon hydrogen  

Hydrogen has a central role to play in decarbonising our EU energy system, in particular in the 
hard  to  abate  sectors  where  electrification  is  not  yet  a  viable  option.  A  clear  regulatory 
framework is essential. The Commission will therefore adopt in Q1 2025 the delegated act 
on  low  carbon  hydrogen,  to  clarify  the  rules  for  producing  low  carbon  hydrogen  in  a 
pragmatic way, providing certainty to investors.  

20 Regulation (EU) 305/2011 
21 Regulation (EU) 2024/1781 

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To de-risk and accelerate the uptake of hydrogen production in the EU, the Commission will 
launch a third call under the Hydrogen Bank in Q3 2025 with a budget of up to EUR 1 billion 
and  encourage  Member  States  to  use  the  auctions-as-a-service  platform  provided  by  the 
Commission, for example by facilitating the use of unspent EU funds.  

Moreover, the launch of the Hydrogen Mechanism under the European Hydrogen Bank in Q2 
2025 will mobilise and connect offtakers and suppliers, linking participants with financing and 
de-risking  instruments  to  facilitate  aggregation  of  offtakers’  demand  for  hydrogen  and 
hydrogen-derived  fuels  in  hard-to-decarbonise  industrial  sectors  and  transport,  e.g.  in  the 
maritime and aviation sectors.  

To  prepare  the  review  of  the  delegated  act  on  renewable  fuels  of  non-biological  origin,  the 
Commission is launching a study to assess the effectiveness of the hydrogen framework and 
identify  possible  barriers  to  the  upscaling  of  renewable  hydrogen.  The  Commission  also 
continuously  supports  stakeholders  in  the  certification  process,  notably  with  a  regularly 
updated online Q&A. 

Flagship actions - Lead markets: boosting clean supply and demand 
Delegated act on low carbon hydrogen, providing regulatory certainty to 
producers of low carbon hydrogen 
Industrial Decarbonisation Accelerator Act: 
•  Establish a low-carbon product label 
•  Apply sustainability, resilience and minimum EU content requirement 
in public and private procurement in strategic sectors to ensure lead 
markets for low-carbon products 

Timeline 

Q1 2025 

Q4 2025 

Communication and legislative proposal on greening corporate fleets 

2025/2026 

Revision of Public Procurement Directives to mainstream the use of non-
price criteria  

Q4 2026 

KPI – Reach 40% of domestically produced key components of clean tech products on the 
EU market22  
KPI - Decrease external vulnerabilities for Clean Industrial Deal products as measured by 
the External Vulnerability Index from 0.19 today. (EXVI)23.  

4.  Public and private investments  

The  clean  transition  of  our  economy  will  require  major  investments. The  EU  needs  to 
increase  its  annual  investments  in  energy,  industrial  innovation  and  scale  up  and  transport 
system  by  around  EUR  480  billion  compared  to  the  previous  decade24.  Mobilising  and 

22 Regulation (EU) 2024/1735 Art. 42 
23 The  European Commission’s External Vulnerability Index (EXVI)  will be  reported on in the Annual Single 
Market  Competitiveness  Report.  It  is  a  tool  that  assesses  the  EU's  vulnerability  to  external  economic  shocks. 
Using granular trade data, EXVI evaluates dependencies, competitive positions, and economic exposure to support 
informed  policy  decisions  and  promote  industrial  resilience.  EXVI  tracks  progress  towards  the  EU's  Clean 
Industrial Deal goals, aiming to reduce vulnerabilities in key sectors. 0 = low vulnerability, 1 = high vulnerability. 
24 SWD (2023) 68 final – Between 2021 and 2030. 

9 

 
 
 
 
leveraging private capital is key. This requires long-term regulatory stability, public incentives 
for decarbonisation and effective policy coordination.  

Building on the experience of the EU budget, which contributes to climate-relevant measures 
supporting the European Green Deal in this financing period, the next Multi-annual Financial 
Framework  (MFF)  will  also  be  a  key  enabler  for  the  clean  transition.  The  planned 
Competitiveness  Fund  will  offer  strong  support  to  innovative  industry  for  sustainable 
investment in the next MFF and a one-stop-shop simplified access to EU fundings. It will focus 
on projects with European added value, such as clean tech, while also supporting industrial 
decarbonisation. EU funding will provide significant further investments in the infrastructure 
and connectivity required to complete the Energy Union. The Commission will adopt a strategy 
on a Savings and Investment Union to enable mobilising capital for private investment. This 
will position Europe as the leading  destination for investments in industrial decarbonisation 
and clean tech.  

Today, EU industry requires immediate access to capital. To provide short-term relief the 
Clean Industrial Deal will mobilise over EUR 100 billion to improve the business case for 
EU-made clean manufacturing, including an additional EUR 1 billion in guarantees under 
the current MFF.  

The Commission will act to (1) strengthen EU-level funding, (2) leverage private investment 
and  (3)  enhance  the  effectiveness  of  State  aid  in  support  to  the  Clean  Industrial  Deal’s 
objectives as well as that of other national support schemes.  

4.1. Strengthening EU level funding 

The  Innovation  Fund  has  proven  to  be  a  reliable  tool  for  EU  industries  to  finance 
industrial decarbonisation and clean tech manufacturing projects. To increase its impact, 
additional financing options should be made available to scale up support for the Innovation 
Fund selected projects that have received a Sovereignty Seal under the STEP Regulation25. The 
Commission will explore ways to facilitate this, including through enhanced synergies between 
existing funding instruments, in order to maximise the financing of Innovation Fund STEP seal 
projects across regions in the EU. In parallel, the Commission will seek to further align funding 
criteria for the Innovation Fund and national financing which will accelerate State aid approval 
for Member States wanting to support projects with a STEP seal. This will clarify the process 
and give Member States an incentive to allocate more national resources.  

In addition, the Commission will propose an Industrial Decarbonisation Bank aiming for 
EUR 100 billion in funding based on funds in the Innovation Fund, additional revenues 
resulting from parts of the ETS as well as the revision of InvestEU. To ensure that the Union 
invests in the innovation and technologies that will shape our economy and drive our transitions 
the Bank will be placed within the governance of the future Competitiveness Fund. Prior to the 
revision of the ETS Directive in 2026, the Commission will launch in 2025 a pilot with a 
EUR 1 billion auction on the decarbonisation of key industrial processes across various 
sectors  supporting  industrial  decarbonisation  and  electrification,  using  a  combination  of 
existing resources under the Innovation Fund and auctions-as-a-service.  

25 Regulation (EU) 2024/795 

10 

 
 
The  Industrial  Decarbonisation  Bank  will  maximise  emission  reduction.  It  will  use  ETS 
allowances  reserved  for  this  purpose  as  part  of  the  architecture  of  the  EU  ETS  to  support 
projects with carbon emission reduction as a metric to enable technology-neutral support across 
industrial  sectors,  including  through  carbon  contracts  for  difference.  It  will  be  designed  to 
ensure a competitive selection and a fair distribution of support across Member States. It will 
complement  the  ETS  price  signal  and  help  bridge  the  funding  gap  in  both  capital  and 
operational expenditures. 

The Commission plans to commit EUR 6 billion from the Innovation Fund in 2025, including 
for clean tech, battery manufacturing, the Hydrogen Bank and industrial decarbonisation. The 
Commission also invites Member States to make more use of grants- and auctions-as-a service 
as a proven model to pool EU and national resources in a harmonised and State aid compatible 
competitive selection. Germany, Austria, Lithuania, and Spain have spearheaded efforts in this 
respect by unlocking additional funding for RFNBO hydrogen projects.  

More  generally,  the  Commission  will  safeguard  the  EU’s  strategic  interests  by  increasingly 
focusing relevant calls on the industrial decarbonisation needs, making greater use of resilience 
criteria  in  competitive  calls  or  restricting  the  participation  of  third  countries  in  sensitive 
research projects. 

Research and Innovation (R&I) is a key enabler for promoting the next generation of clean 
tech, clean energy and decarbonised manufacturing in the EU. The Commission will launch a 
flagship Horizon Europe call of ca. EUR 600 million under the 2026-2027 work programme 
to  support  fit-for-deployment  projects.  This  will  aim  at  fostering  synergies  between  the 
Framework Programme for R&I and the Innovation Fund, creating a pipeline of projects from 
R&I to deployment. In addition, to support fusion as an innovative, decarbonised energy source 
for  the  future,  a  fusion  strategy  will  be  proposed,  including  the  creation  of  Public-Private 
Partnerships (PPPs) to accelerate commercialisation. 

4.2. Leveraging private investment 

InvestEU  is  currently  the  main  EU-level  tool  to  leverage  private  funding.  Operated  in 
cooperation with the EIB Group, international financial institutions and national promotional 
banks, it has mobilised over EUR 280 billion of additional funding into the EU economy.  

The  Commission  is  putting  forward  an  amendment  of  the  InvestEU  Regulation  to 
increase InvestEU’s risk bearing capacity. This proposal will simplify and provide for the 
re-use of surpluses from the European Fund for Strategic Investments as well as reflows from 
legacy financial instruments and facilitate equity support. This proposal will mobilise around 
EUR  50  billion  additional  financing  and  investment  in  key  EU  policy  priorities,  such  as 
modernisation of industrial processes, manufacturing and deployment of clean tech, financing 
for energy infrastructure projects, clean mobility solutions or waste reduction and recycling, 
until the end of the current MFF. Existing guarantee instruments under InvestEU will also be 
used by the EIB Group, in part in connection with a Clean Tech Guarantee Facility. To further 
increase funding in areas covered by the Clean Industrial Deal, interested Member States are 
encouraged to swiftly transfer their resources, to the InvestEU Member State compartment.  

The  Commission  will  also  work  with  the  EIB  Group  on  new  initiatives  in  favour  of  the 
sectors specifically targeted by the Clean Industrial Deal, to be supported as appropriate by 
InvestEU. The EIB Group is one of the largest providers of climate funding and can play a 
significant  role  to  secure  additional  private  funding. As  announced  in  the  Competitiveness 

11 

 
Compass,  the Commission will work with  the EIB Group and private investors to  deploy  a 
TechEU  investment  programme  to  help  bridge  the  financing  gap  to  support  disruptive 
innovation,  strengthen  Europe’s  industrial  capacity  and  scale-up  companies  which  invest  in 
innovative technologies such as AI, clean tech, critical raw materials, energy storage, quantum 
computing,  semiconductors,  life  sciences,  and  neurotechnology.  The  EIB  will  continue  to 
develop  new  approaches  to  support  European  companies  investing  in  the  clean  transition. 
Examples may include incentive mechanisms for decarbonisation achievements  

4.3. Clean Industrial Deal State Aid Framework and other support and facilitation 

National level support, including State aid support and tax incentives, plays a crucial role in 
decarbonisation and circularity efforts by providing financial backing and reducing barriers to 
investment. These measures not only strengthen the economic viability of sustainable projects 
but also leverage private sector participation. 

The  new  Clean  Industrial  Deal  State  Aid  Framework  will  enable  necessary  and 
proportionate  State  aid  that  crowds  in  private  investment.  It  will  do  so  by  providing 
Member States with a longer planning horizon of 5 years and businesses with more investment 
predictability for projects contributing to the objectives of the Clean Industrial Deal. The new 
Framework  will  make  a  fundamental  contribution  to  the simplification  of  State  aid  rules  to 
further Clean Industrial Deal objectives while preserving the level playing field and European 
cohesion. 

Simplified  and  flexible  rules  will  allow  quick  approval  of  State  aid  measures  for 
decarbonisation, notably where they have undergone a European selection process, and clean 
tech  projects,  while  avoiding  undue  competition  distortions  in  the  Single  Market.  The 
Framework  will  introduce  "off-the-shelf"  options  for  Member  States  to  easily  demonstrate 
compatibility  as  well  as  a  wider  use  of  simplified  methods  to  set  aid  amounts  instead  of 
complex  individual  assessments,  building  on  the  experience  of  the  Temporary  Crisis  and 
Transition Framework. It will also allow separate support schemes for specific technologies 
such  as  wind  and  solar,  and  further  facilitate  support  to  non-fossil  flexibility  measures  and 
capacity  mechanisms  accelerating  the  decarbonisation  of  the  energy  system.  Support  for 
additional manufacturing of clean-tech products, such as batteries and renewable technologies, 
will  also  be  allowed  by  updating  the  rules  for  investments  in  certain  strategic  net-zero 
equipment manufacturing capacity.  

The simplification of existing State aid rules is essential. The upcoming review of the General 
Block  Exemption  Regulation  will  significantly  reduce  the  bureaucratic  burden  for  both 
undertakings and Member States and facilitate necessary support for industry, while preserving 
the integrity of the Single Market. In parallel, the Commission is evaluating the Guarantee 
Notice, to assess if it is still a sufficiently clear and predictable framework for granting state 
guarantees.  State  guarantees  can  be  an  effective  support  instrument  that  leverages  private 
financing while being a lesser burden on public resources than support through direct grants. 
The Commission will also work closely with the Member States to speed-up the design of 
new IPCEIs, to strengthen the efficiency of the tool to support industrial decarbonisation and 
the clean tech manufacturing in the EU. It will offer a new support hub to accelerate getting 
IPCEI projects off the ground. The Commission will also work with the EIB to develop a one-
stop shop to provide grant application and financial structuring advice.  

12 

 
Beyond the State aid rules, the Commission also stands ready to provide informal guidance to 
companies on the compatibility of cooperation projects contributing to the achievement 
of EU priorities with antitrust rules in particular those related to innovation, decarbonisation 
and economic security in the EU. Furthermore, the guidelines for assessing mergers will be 
revised to ensure that the impact of mergers on the affordability of sustainable products and on 
clean  innovation,  or  on  creating  efficiencies  that  bring  sustainable  benefits,  but  also  on 
innovation, resilience, and the investment intensity of competition in certain strategic sectors 
are better integrated in the competition analysis. 

Finally, tax policies are a key incentive to reach the objectives of the Clean Industrial Deal. 
They  should  not  give  fossil  fuels  an  advantage  over  clean  energy.  The  Commission  will 
recommend to Member States that their corporate tax systems support a clean business 
case.  Measures  could  include  shorter  depreciation  periods  for  clean  technology  assets, 
allowing businesses to quickly write off costs and benefit from tax incentives that offset high 
initial investments, and the use of tax credits for businesses in strategic sectors for the clean 
transition,  to  make  it  more  financially  attractive  to  invest  in  decarbonised  practices. To  the 
extent  such  measures  involve  State  aid,  the  new  State  aid  framework  will  integrate  these 
instruments in its compatibility rules. These tax related measures will be paired with further 
actions to scale down and phase out fossil fuel subsidies, e.g. in the context of the European 
Semester  2025.  To  facilitate  growth  and  investment  in  new  innovative  companies 
the Commission will propose a 28th legal regime, which will simplify applicable rules. 

Flagship actions – Public and private investment 

Increase InvestEU’s risk bearing capacity 

IPCEI Design Support Hub 

Clean Industrial Deal State aid framework 

Recommendation to Member States to adopt tax incentives to support the 
Clean Industrial Deal  

Flagship call under Horizon Europe 

Pilot auction under the Innovation Fund 

Industrial Decarbonisation Bank 

Timeline 

Q1 2025 

2025 

Q2 2025 

Q2 2025 

Q4 2025 

2025 

Q2 2026 

TechEU investment programme on scale-ups with the EIB Group and private 
sector 

2026 

KPI: Increase the total volume of investment supporting industrial transition from EUR 
52.7 billion26  

26 https://investeu.europa.eu/investeu-programme/investeu-fund/investeu-indicators_en#key-
indicators-selection  

13 

 
 
 
 
5.  Powering the circular economy: a secure access to materials and resources 

Europe should be more strategic about procuring raw and secondary materials to drastically 
reduce our exposure to unreliable suppliers and prevent supply disruptions. More than before, 
circularity should be a driver for innovation.  

By placing circularity at the core of our decarbonisation strategy, the EU not only improves the 
affordability  and  accessibility  of  essential  materials  but  also  reduces  our  dependencies  as 
materials are reused, remanufactured, recycled, and kept within the economy for longer. The 
European  remanufacturing  market’s  circular  potential  is  projected  to  grow  from  its  current 
value of EUR 31 billion to EUR 100 billion by 2030, creating 500,000 new jobs. This will 
make Europe’s industrial production more sustainable, speed-up decarbonisation and enhance 
resource security. 

5.1. Fast implementation of the Critical Raw Materials Act 

To secure access to critical raw materials essential to our twin transitions and for which the EU 
is  heavily  dependent  on  a  limited  number  of  third  country  suppliers,  the  Commission  will 
prioritise  the  implementation  of  the  Critical  Raw  Materials Act.  This  will  include  the 
recognition  of  a  first  list  of  Strategic  Projects  in  March  2025  to  ensure  diversification  of 
supplies  across  the  entire  value  chain  as  well  as  facilitating  access  to  public  and  private 
financial support for these projects.  

Building  on  its  experience  with AggregateEU,  the  Commission  will  create  a  platform  for 
demand aggregation and a matchmaking mechanism for strategic raw materials. As a second 
step, complementary to the Critical Raw Materials Act and in line with the recommendations 
of  the  Draghi  report,  the  Commission  will  set  up  a  dedicated  EU  Critical  Raw  Material 
Centre to jointly purchase raw materials on behalf of interested companies and in cooperation 
with the Member States. Other tasks could relate to coordinating strategic stockpiles, supply 
chain monitoring, designing financial products to invest in upstream supply in the EU and third 
countries.  

5.2.  Circular Economy  

EU industry is a front runner in circularity. But these efforts are currently hampered by the 
absence of scale and a single market for waste, secondary raw materials, reusable materials and 
lead markets. To address this gap, the Commission will continue to engage with stakeholders 
to identify actions and measures that would allow transformational steps towards circularity. 
The EU also needs to make sure that products containing valuable and scarce materials are (re-
)used efficiently and for as long as possible before they become waste, including through the 
full roll-out of Ecodesign requirements on important product groups.  

The  Commission  will  adopt  a  Circular  Economy Act  in  2026,  which  will  accelerate  the 
circular transition, building on our single market. The Act will enable the free movement of 
circular products, secondary raw materials and waste, foster a higher supply of high quality 
recyclates and stimulate demand for secondary materials and circular products while bringing 
down feedstock costs. One of the measures in the Act is a revision of existing rules on e-waste, 

14 

 
to  ensure  that  they  are  simpler,  fit-for-purpose  and  recover  the  critical  raw  materials  they 
contain.  It  will  harmonise  “end  of  waste”  criteria  to  facilitate  the  transition  from  waste  to 
valuable  secondary  raw  materials,  simplify,  digitalise  and  expand  in  a  targeted  manner 
extended producer responsibility, and boost demand through criteria for public procurement. It 
will  provide  incentives  to  increase  the  use  of  metal  scrap  and  mandatory  digitalisation  of 
demolition permits and pre-demolition audits. To move away from fossil materials, it is vital 
to  mandate  the  use  of  new  raw  material  sources  like  recycled  and  bio-based  materials  to 
substitute,  for  example,  virgin  fossil  materials  in  plastics. The  measures  of  the Act  will  be 
complementary  to  and  facilitate  the  rolling  out  of  the  Ecodesign  for  Sustainable  Product 
Regulation. The work plan under this Regulation will be adopted in April 2025.  

To  increase  circularity  and  the  recycling  capacity  in  the  EU,  including  achieving  the  25% 
recycling target  as set  out  in  the Critical  Raw  Materials Act,  the  Commission will  consider 
additional measures to make recycling of critical raw materials waste within the Union more 
attractive  than  their  export.  The  Commission  will  also  work  on  measures  to  incentivise 
diversion from landfill towards re-use and recycling through more effective separate collection. 
In doing so, the Commission will also take into account whether third countries have put in 
place  export  restrictions  measures  on  critical  raw  material. At  the  same  time,  the  EU  will 
cooperate with third countries that want to develop partnerships on circular economy in this 
domain. Export fees could also be assessed and considered, which could then be used to finance 
investment in recycling capacity.  

As the European battery recycling industry is faced with a critical situation of a shortage of 
black  mass,  which  is  exported  to  third  countries  despite  its  economic  and  environmental 
importance for the European battery ecosystem. Bearing in mind its hazardous properties, the 
Commission will adopt specific measures regarding black mass.  

We must not only dismantle regulatory barriers but also facilitate the significant scaling up of 
investments  to  supply  the  secondary  raw  materials  that  industrial  manufacturing  needs. 
Cooperation between Member States and interested economic actors will be fostered through 
Trans-Regional Circularity Hubs to promote smart specialisation and economies of scale for 
recycling. The Hubs will identify strategic projects based on proposals by groups of Member 
States and/or industrial actors, enabling the pooling of diverse regional streams. This approach 
will ensure a sufficient scale, allowing the installations to achieve the necessary size to operate 
continuously. They will build on the experience of Strategic Projects under the Critical Raw 
Materials Act and apply similar approaches to the technical and biological materials on which 
our industries depend. Furthermore, the Commission will actively assist Member States in the 
design of a potential new IPCEI on circular advanced materials for clean technologies. 

In addition, the Commission will launch a fact-finding exercise to gather input from market 
participants on how European companies currently procure and recycle the most important raw 
materials and assess whether more cooperation between industry players is needed. This could 
be  supported  by  providing  informal  guidance  on  how  cooperation  in  the  recycling  of  raw 
materials can be most effective in line with EU competition rules. 

15 

 
Furthermore, the Commission will review the rules on the second-hand scheme contained in 
the VAT Directive27, as part of a green VAT initiative to address the issue of embedded VAT in 
second-hand products. Finally, to ensure an effective circular transition, work will have to be 
done in close partnership with all stakeholders. To this end the Commission will launch a Clean 
Industrial Dialogue on Circularity to support the preparation of the Circular Economy Act and 
identify areas where further efforts are needed. 

The example of fertilisers illustrates the potential of the Clean Industrial Deal across sectors. It 
showcases  circularity  agenda  as  a  security  agenda.  The  domestic  production  of  fertilisers, 
including of low-carbon fertilisers and fertilisers from recycled nutrients, reduces dependencies 
on fertiliser imports and emissions, promotes circular business models, and should reduce input 
prices for farmers.  

Flagship actions – Powering the circular economy: a secure access to 
materials and resources 

First list of Strategic Projects under the Critical Raw Materials Act  

Ecodesign Work Plan adoption  

EU Critical Raw Materials Centre for joint purchases and management of 
strategic stockpiles  

Circular Economy Act  

Green VAT initiative 

Trans-Regional Circularity Hubs 

Timeline 

Q1 2025 

Q2 2025 

Q4 2026 

Q4 2026 

Q4 2026 

Q4 2026 

KPI: Increase circular material use rate from 11.8% today to 24%28 by 203029 

6.  Global markets and international partnerships  

Achieving the objectives of the new Clean Industrial Deal is closely linked to our ability 
to  act  internationally.  The  EU  cannot  realise  its  clean  industrialisation  objectives  without 
partnerships on the global stage. Many of the critical raw materials that are essential for the 
green transition and for EU resilience and security need to be sourced from outside the EU. At 
the same time, moving towards sustainable, diversified and resilient industrial value chains is 
also  an interest  shared by our partners.  Our economic success  also  depends on open, rules-
based trade and access to third markets for goods and capital.  

Today, the world’s major economies are vying for access to markets, critical raw materials, new 
technologies and global trade routes in the race to climate neutrality and to develop or acquire 

27 Council Directive 2006/112/EC. 
28 COM (2020) 98 final – A new Circular Economy Action Plan. 
29 Reported in the Annual Single Market and competitiveness Report (2025 edition link). 

16 

 
 
 
strategic technologies first. Furthermore, industry faces unfair global competition notably due 
to the export of domestic overcapacities from other countries at highly discounted prices. We 
have entered an era of global geoeconomic competition with the necessity to protect the global 
level  playing  field  and  ensure  that  the  EU  market  does  not  serve  as  a  backfilling  export 
destination for excess global capacity. 

6.1. Clean Trade and Investment Partnerships 

According to the International Energy Agency, the global market for clean energy technology 
will be worth USD 2 trillion in 2035. To achieve climate neutrality in a competitive manner, it 
is essential that European companies, investors and workers secure the largest possible share 
of this opportunity.  

The EU’s vast network of trade agreements ensures that European companies have better access 
to  third  markets  and  essential  inputs.  It  is  therefore  crucial  that  the  EU  continues  to  sign, 
conclude and fully implement pending Free Trade Agreements (FTAs) and takes forward 
ongoing negotiations for new FTAs. Clean Trade and Investment Partnerships (CTIPs) will 
complement these agreements through a faster, more flexible, and more targeted approach, 
tailored to the concrete business interests of the EU and its partners. The CTIPs will therefore 
be designed to better align the EU’s external action with the EU’s industrial policy objectives 
considering  businesses’  opportunities  and  needs.  Their  focus  will  be  on  better  managing 
strategic  dependencies  and  securing  the  EU’s  position  in  crucial  global  value  chains,  by 
diversifying our supply chains and securing better access to raw materials, clean energy as well 
as clean tech. They will also foster cooperation on energy technology and policies for the clean 
transition, and support decarbonisation efforts in partners countries. In this sense, catering to 
EU and partners’ businesses’ needs and interests will be crucial to design effective CTIPs and 
ensuring proper offtake of the trade and investment opportunities created by them.  

The CTIPs will bring together rules, regulatory cooperation as well as investment to develop 
strategic clean value chains with partners. Firstly, investments will be mobilised by identifying 
concrete projects combining private and public finance, through Global Gateway investment 
delivered  in  a  Team  Europe  approach.  Secondly,  rules  will  contribute  to  a  conducive 
environment for clean investment and business opportunities for EU companies to operate on 
an equal footing in foreign markets. Thirdly, regulatory cooperation will support partners in 
deploying in particular clean tech, electrification, circularity, decarbonisation standards as well 
as carbon pricing. The result will be credible and attractive partnerships promoting clean tech 
investments that ultimately also speed up the global transition. The Commission aims to launch 
the first CTIP in March.  

Under  the  new  Pact  for  the  Mediterranean,  an  ambitious  Trans-Mediterranean  Energy  and 
Clean Tech Cooperation initiative will stimulate large scale public and private investments in 
renewable energy. Furthermore, our diplomacy will continue to support partner countries in 
engaging in the green transition in the context of ambitious climate and environmental policies 
and Nationally Determined Contributions under the Paris Agreement. The EU should adopt a 
strategic  approach  to  energy  cooperation  focusing  on  three  key  areas:  diplomacy,  technical 
assistance and economics, joining up efforts with Member States at country level.  

17 

 
6.2. Improving the Carbon Border Adjustment Mechanism 

The Carbon Border Adjustment Mechanism (CBAM) ensures that the EU’s industry emissions 
abatement efforts are not undermined by carbon intensive imports of goods produced outside 
of the EU and incentivises decarbonisation and carbon pricing globally. Yet, data collected to 
date indicate that a limited number of importers account for more than 99% of greenhouse gas 
emissions embedded in imported goods. The Commission is proposing to substantially simplify 
CBAM, reducing administrative burden on industries and their supply chains while continuing 
to incentivise global carbon pricing. This is a first but necessary step to making the CBAM 
more effective.  

In the second half of 2025, the Commission will also present a comprehensive CBAM review 
report.  It  will  assess  the  scope  of  the  CBAM  extension  to  additional  EU  ETS  sectors  and 
downstream products. The report will also assess the inclusion of indirect emissions across all 
CBAM sectors considering the indirect costs of electricity for EU producers. The report will 
set out a strategy to tackle possible circumvention risks. At this occasion, the Commission will 
also review how to address the problem of carbon leakage of goods exported to third countries. 
This review will be followed by a legislative proposal in first half 2026. 

In parallel,  through  technical  assistance  and regulatory cooperation the EU  will continue to 
further  support  partner  countries’  decarbonisation  efforts.  Through  the  recently  launched 
International Carbon Markets and Carbon Pricing Diplomacy Task Force, it will also promote 
the  development  of  carbon  pricing  and  carbon  markets  worldwide,  by  supporting  partner 
countries to develop effective carbon pricing policies and robust approaches to international 
carbon markets. 

6.3. Promoting and protecting: Ensuring a level-playing field for the EU industry 

The  EU  needs  to  remain  an  attractive  place  to  do  business,  while  ensuring  that  foreign 
investments, especially in strategic sectors, contribute to economic growth while not impairing 
Europe’s economic security. The Commission will propose, in close consultation with industry 
stakeholders  and  Member  States,  measures  to  ensure  that  foreign  investments  in  the  EU 
better contribute to the long-term competitiveness of EU industry, its technological edge 
and economic resilience, as well as the creation of quality jobs in the EU. For instance, for 
projects that involve foreign investment, especially when involving public financing, Member 
States could collectively consider conditions such as ownership of the equipment, EU sourced 
inputs, EU-based staff recruitment, the need for joint ventures or intellectual property transfers, 
starting  with  some  strategic  sectors,  such  as  for  example,  the  automotive  or  renewable 
manufacturing. 

At the same time, it is crucial to ensure that foreign investments do not undermine Europe’s 
security  and  public  order.  With  the  ongoing  review  of  the  EU  Foreign  Direct  Investment 
(FDI)Screening Regulation30, the Council and the European Parliament have an opportunity to 
further strengthen EU’s investment screening framework by reducing the differences between 
national  screening  mechanisms,  introduce  resilience  requirements,  and  aligning  their 
approaches and policies therefore minimising the risk of “forum shopping”. 

30 Regulation (EU) 2019/452 

18 

 
 
The Commission will adopt guidelines by January 2026 on key concepts underpinning 
the Foreign Subsidies Regulation31 (FSR), such as how the Commission will assess distortive 
effects  of  foreign  subsidies.  The  guidelines  will  also  clarify  in  which  circumstances  the 
Commission  may  decide  to  review  mergers  under  foreign  subsidy  rules  that  do  not  meet 
thresholds but pose a risk to the level playing field in the single market. The Commission will 
make use of FSR ex officio investigations in strategic sectors.  

In line with its objective of competitiveness, resilience and sustainability, the Commission will 
consider adjusting tariffs within bound levels, including to the maximum levels as necessary, 
relying on exceptions e.g. for environmental protection.  

The  Commission  will  also  continue  to  make  fast  and  efficient  use  of  Trade  Defence 
Instruments  (TDIs),  such  as  anti-dumping  or  anti-subsidy  duties  where  necessary.  To 
protect our industries from unfair competition and ensure that our market does not serve as an 
export  destination  for  state-induced  excess  global  capacity  we  will  sharpen  existing  Trade 
Defence Instruments, including through shortening investigation timelines or making greater 
use of ex officio procedures. The Commission will also reflect, together with Member States 
and stakeholders, if further instruments are necessary to complete and reform the TDI toolbox.  

As  protectionist  measures  are  multiplying  across  the  globe,  there  is  a  risk  that  global 
overcapacities  will  be  redirected  to  the  EU  market.  The  Commission  will  address 
overcapacities by intensifying our international and multilateral cooperation and focusing on 
detecting  and  addressing  root  causes  of  non-market-oriented  measures,  including  subsidies 
resulting in distortions in key industries and trade patterns for critical goods and technologies. 
The EU will seek closer engagement within the G7 in this regard and exchange information to 
make sure autonomous responses and collective actions are well coordinated and effective.  

Flagship actions – Global markets and international partnerships 

Timeline 

Launch negotiations for the first Clean Trade and Investment Partnership  

Q1 2025 

Simplification of the Carbon Border Adjustment Mechanism (CBAM) 

Q1 2025 

Comprehensive CBAM review assessing the feasibility of extending the CBAM 
scope to other EU ETS sectors at risk of carbon leakage, to downstream sectors 
and to indirect emissions and support to exporters, closing loopholes 

Trans-mediterranean Energy and Clean tech cooperation initiative 

Legislative proposal on an extension of CBAM 

Guidelines on Foreign Subsidies Regulation 

Q3 2025 

Q4 2025 

Q1 2026 

Q1 2026 

31 Regulation (EU) 2022/2560 

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7.  Skills and quality jobs for social fairness and a just transition 

Every  person,  community,  and  business  should  benefit  from  the  clean  transition.  The 
Clean  Industrial  Deal  therefore  commits  to  a  just  transition  that  delivers  quality  jobs  and 
empowers people, building on their skills, while promoting social cohesion and equity across 
all regions. Our industry needs a skilled workforce and must offer quality jobs to attract top 
talent. Keeping workers and local communities at the centre of the industrial transformation, 
harnessing  talents  and  further  building  up  needed  skills  is  essential  for  a  successful  clean 
transition. At the same time, the clean and digital transition also means shifts in the workforce 
and new requirements for skills.  

7.1. Support for Skills  

Industry needs better access to skills. The Commission will lay out a Union of Skills as an 
overarching  skills  strategy  to  give  people  the  skills  they  need  to  make  the  most  of  their 
potential, and to ensure that employers can access the  expertise they need for a vibrant  and 
competitive economy. It will also review the EU support models for sectorial skills initiatives 
(including the Academies, Pact for Skills, Alliance for Apprenticeships, Centres of Vocational 
excellence) to streamline the framework for sectoral skills reinforcement in strategic industries 
linked to the Clean Industrial Deal, with a reinforced support by up to EUR 90 million from 
Erasmus+. 

The  Union  of  Skills  will  enhance  our  skills  intelligence  and  focus  on,  among  others, 
investment, adult and lifelong learning, vocational education and training, higher education, 
skills retention and recognition as well as attracting and integrating qualified talents from third 
countries,  including  through  the  future  EU  Talent  Pool.  To  tackle  the  challenges  of  skills 
recognition,  the  Commission  will  consider  further  action  for  streamlined  and  simplified 
processes  as well as  digitalisation tools. A  Skills Portability Initiative will  facilitate that a 
skill acquired in one country is recognised in another.  

7.2. Supporting workers in the transition 

We need our industry to remain an attractive workplace. The Quality Jobs Roadmap, to 
be prepared together with social partners, will support Member States and industry in providing 
decent working conditions, high standards for health and safety, access to training and ensuring 
fair job transitions for workers and self-employed, and collective bargaining, with a view to 
attracting talent and contributing to the competitiveness of European industries.  

The Quality Jobs Roadmap will provide support to workers in transitions. In this context 
the  Commission  will  discuss  with  social  partners  a  framework  to  support  restructuring 
processes at EU and Member States level. The framework will be focused on just transition, 
on anticipation of change, quicker intervention when there is a threat of restructuring, and an 
improved information and consultation framework.  

Investments should combine income protection and active labour market policies (ALMPs) to 
support workers during the transition, including job placement services, training and reskilling 
opportunities, and entrepreneurial support, including support for vulnerable groups.  

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The discussion will also extend to the functioning of the European Globalisation Fund, to see 
how it can contribute more. To inform the work in this area, the Commission will create a 
European  Fair  Transition  Observatory.  It  will  strengthen  the  evidence  base  on  fairness 
aspects  of  the  green  transition,  develop  standardised  indicators,  collect  best  practices  and 
facilitate data sharing to measure  impacts  and outcomes  related to  employment, quality  job 
creation and job-to-job transitions, workforce reskilling, investment needs,  social protection 
and access to essential services32 as well as ensure a transparent dialogue with social partners, 
regional and local authorities, civil society and other stakeholders on just transition aspects.  

The Commission will explore ways to improve the delivery of the Just Transition Fund (JTF) 
drawing  on  lessons  learned  and  identifying  best  practices  to  inform  the  design  of  future 
instruments  under  the  next  MFF.  In  addition,  the  Commission  will  adopt  the  European 
Affordable  Housing  Plan  to  address,  amongst  others,  workforce  mobility  to  workplaces  in 
metropolitan areas. 

The  use  of  social  conditionalities  in  public  funding  ensures  that  workers  benefit  from  the 
support provided to industry, including to promote collective bargaining. This approach aligns 
with  the  EU’s  broader  objectives  of  fostering  social  fairness  alongside  economic  growth. 
Enhanced competitiveness must build upon existing social achievements and the EU’s social 
model to achieve an inclusive and fair green transition.  

The Union will further support labour and social standards to ensure that the transition is fair 
and equitable for all, including in the context of the Commission’s forthcoming evaluation of 
the legislative framework on public procurement.  

Also, as part of the review of the General Block Exemption Regulation, the Commission will 
assess if and how State aid rules can be updated to provide better incentives for industry to 
invest in upskilling, reskilling, quality jobs and recruitment of workers for a just transition. The 
Commission will assess if the use of training and skills conditionalities for public funding 
supporting  the  anticipation  and  management  of  change  and  the  industrial  transition  can  be 
increased. Furthermore,  competition  policy plays a crucial  role in  protecting  citizens' rights 
against excessive power, including in the digital realm, ensuring that new players operate fairly 
and do not concentrate economic and strategic power unduly. 

Social leasing for clean products to ensure that all Europeans benefit from the clean transition, 
without  adverse  distributional  effects  and  to  help  stimulate  demand  for  clean  products,  the 
Commission will develop a Guidance to Member States on social leasing for zero-emission 
vehicles, heat pumps, and other clean products, providing financial assistance to citizens to 
access these clean products, eligible also in the context of the Social Climate Fund.  

Flagship actions – Skills and quality jobs for social fairness 

Union of Skills  

Timeline 

Q1 2025 

32 In line with the Council Recommendation on ensuring a fair transition towards climate neutrality, 2022/C 
243/04, 16 June 2022, and the EU Quality Framework for Anticipation of Change and Restructuring, 
COM/2013/0882 final, 13 December 2013 

21 

 
 
 
Quality Jobs Roadmap 

Guidance on social leasing for clean products 

European Fair Transition Observatory 

Skills Portability Initiative  

Review of State aid GBER rules for social enterprises and recruitment of 
disadvantaged workers 

Q4 2025 

2025 

Q1 2026 

2026 

Q4 2027  

KPI: Reducing the number of occupations requiring specific skills or knowledge for the 
green transition where at least five Member States reported a shortage. In 2024, there were 
27 such occupations33.  

8.  Implementing the Clean Industrial Deal across sectors 

The  Clean  Industrial  Deal  will  serve  as  a  framework  for  engaging  in  a  dialogue  with 
industries, with attention for the SMEs, to develop sectoral transition pathways. These 
will  enable  informed  investment  decisions  and  facilitate  the  mobilisation  of  more  capital 
towards the transition, ultimately accelerating progress towards a cleaner and more competitive 
industrial future. 

To tailor action to the specific needs of individual sectors, work is ongoing on several sector 
specific plans in 2025, followed by other sectors as appropriate:  

The Industrial Action Plan for an Automotive Sector will be adopted on 5 March, building 
on the ongoing strategic dialogue. The action plan will address the needs of the automotive 
value chain, with a strong focus on innovation in future technologies and capabilities. 

A steel and metals action plan, based on the Strategic Dialogue that will be launched on 4 
March, will propose concrete actions for both ferrous and non-ferrous metals industries, as well 
as steel and metals – the backbone of EU industry for centuries – are essential for the clean and 
digital transitions.  

A Chemicals Industry Package, set for adoption in late 2025, will recognise the strategic role 
of the chemicals sector as “industry of industries”  and of critical molecules. It will propose 
targeted initiatives to enhance the sector’s competitiveness, modernisation as well as support 
production and innovation in Europe.  

A Sustainable Transport Investment Plan will outline short-and medium-term measures to 
prioritise  support  to  specific  renewable  and  low-carbon  fuels  for  aviation  and  waterborne 
transport, on which many energy-intensive industrial  sectors rely.  It will also  accelerate the 

33 As reported by the European Labour Authority, based on data from EURES National Coordination Offices. 
Skills and knowledge requirements align with the ESCO taxonomy on skills for the green transition, with 
examples analysed using the green intensity index for European Skills Competences and Occupations (ESCO). 

22 

 
 
rollout of recharging infrastructure. New rules facilitating aid for a shift towards sustainable 
land transport modes will enable the rail sector to embrace the clean and digital transition.  

The Commission will also propose a Bioeconomy Strategy, to improve resource efficiency 
and  to  tap  the  significant  growth  potential  of  bio-based  materials  substituting  fossil-based 
materials, and related industries. This can also further reduce dependencies on imported raw 
materials. The new bioeconomy sectoral plan will lay down priorities for manufacturing and 
using biomaterials, and for retaining them as long as possible in the economy. The European 
Ocean  Pact will  promote  innovation  in  blue  clean  tech,  offshore  renewables  and  circular 
economy practices.  

9.  Conclusion  

Putting decarbonisation and circularity at the heart of our economic policy is the only way for 
the EU to keep up with resource rich competitors. The Clean Industrial Deal is the strategy to 
do this. EU's net greenhouse gas emissions are now 37% below 1990 levels, while GDP grew 
by  68%  during  the  same  period.  This  progress  underscores  decarbonisation  as  a  driver  of 
economic growth and prosperity, opening new avenues for Europeans. 

The EU holds all the necessary tools, but their true strength comes from being strategically 
aligned and used cohesively towards shared objectives. A key aspect of our strategy is retaining 
young talent, creating opportunities that inspire and engage the next generation. Our approach 
includes  a  coherent  external  and  internal  dimension,  adapting  our  strengths  to  today's 
geopolitical  reality  where  global  markets  and  accessibility  to  resources  have  evolved.  This 
requires ensuring a level playing field without compromising the high environmental and social 
standards our society demands.  

But  a  strategy  is  only  as  good  as  its  effective  implementation.  This  requires  robust 
measuring, monitoring and dialogue and coordinated action at EU scale for investments and 
scaling  up.  The  Commission  will  closely  monitor  progress  in  its  Annual  Single  Market 
Competitiveness  Report  towards  decarbonisation  and  competitiveness  objectives,  gradually 
adding  new  KPIs  as  set  out  in  this  document.  It  will  also  reinforce  coordination  across  its 
organisation  to  provide  strategic  steer,  monitor  progress,  and  engage  in  dialogue  with  local 
authorities and stakeholders. 

Cooperation and alignment with the Member States are essential. The Commission will also 
work together with the co-legislators to implement the actions outlined in this communication. 
The initial focus of the discussions will be the identification of urgent decarbonisation priorities 
and industrial clusters. 

We invite industry to exercise bottom-up leadership and targeted alignment to deliver tangible 
results that could be scalable at European level. 

Together,  the  actions  of  this  joint  roadmap  for  decarbonisation  and  competitiveness  for 
European industry will ensure that there is a sustainable future for manufacturing in Europe – 
economically, environmentally and socially.  

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