Opinion of the European Committee of the Regions – The Clean Industrial Deal
Date: 2025-07-02
Institutions: Commission for Economic Policy, European Committee of the Regions
Subjects: EU energy policy, EU industrial policy, Just transition, circular economy, clean technology, competitiveness, innovation, investment, reduction of gas emissions, twin transition








C_202504412EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/4412


29.8.2025






Opinion of the European Committee of the Regions
The Clean Industrial Deal
(C/2025/4412)














Rapporteur



:


William ELOFSSON (SE/EPP), Second Deputy Mayor of Gävle, Sweden









POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)

The Clean Industrial Deal and the need to improve EU competitiveness









1.


welcomes the Clean Industrial Deal as an overdue growth strategy to decarbonise and drive competitiveness for EU industries while promoting a more sustainable, resilient, digitalised and innovative economy, ensuring that local and regional authorities (LRAs) receive adequate and equitable financial and technical support, so that competitiveness is territorially and socially just, drawing on the Draghi, Letta and Niinistö reports, and in line with the EU Competitiveness Compass;












2.


endorses the focus on improving markets for industrial decarbonisation and on attracting investment for industry, infrastructure, energy, circularity, and raw materials, thus expanding innovation, supporting cutting-edge clean tech and promoting skills development, based on a long term and stable policy framework and quality jobs;












3.


welcomes the Clean Industrial Deal’s commitment for the EU to become a decarbonised economy by 2050 as a ‘powerful driver of growth and prosperity’ and thus of competitiveness, including through the intermediate 2040 target of 90 % net greenhouse gas emissions reduction;












4.


calls for furthering cooperation with like-minded international partners, like the EFTA states and the United Kingdom, taking into account the EU’s Global Gateway. The single market must ensure a level playing field, avoiding fragmentation and barriers to competitiveness inside the EU, while ensuring fair competition with external partners, including with regard to tariffs, State aid and other barriers; stresses the need to protect European industry from unfair competition from third countries and from overcapacity with a series of trade defence and other instruments such as the Border Adjustment Mechanism;












5.


stresses the need for a strong territorial dimension and the support of regional ecosystems to ensure effective implementation, and for a place-based approach through partnerships of all levels of government, taking into account the diverse industrial strengths and vulnerabilities of Europe’s territories and the division of powers within the Member States;












6.


calls on the Commission to work closer and more strategically with the CoR on implementing a place-based industrial policy, facilitating territorial dialogues;





Towards a competitive and socially and environmentally sustainable industrial policy









7.


urges all levels to keep a holistic approach as a basis for development and growth, including resilience, the long-term goals for climate-neutrality, circularity, biodiversity and social sustainability and cohesion, based on a strong European social market economic model. The CoR strongly reiterates its calls for a European strategic framework on a just transition, taking into account the diverse conditions of all EU territories, such as peripheral, insular, rural, urban and regions with scarce or ageing populations;












8.


commends the Commission’s target to cut the costs of all administrative burdens by 25 % for all companies and 35 % for SMEs, agreeing with the Competitiveness Compass that restoring Europe’s competitiveness requires going much further than before in cutting red tape at the same time emphasising the need for regulatory coherence and certainty for fostering long-term investment and competitiveness; welcomes the omnibus 1 and 2 for a more targeted design of sustainability reporting as well as other notified industrial policy simplification measures for businesses and industry, especially SMEs; particular attention must be paid to ensuring that reduced regulation in the private sector does not increase the administrative burden, reporting and accountability obligations of the public sector;












9.


reiterates its call for just transition funding to become an essential part of a reformed and reinforced cohesion policy that focuses on anticipating change, supporting those regions facing the transformation of strategic, energy-intensive, greenhouse gas-emitting and labour-intensive industries, but which are in fact key to the resilience and strategic autonomy of the European economy;












10.


calls for greater policy coherence between EU industrial policy, climate policy, and the EU ambition for zero pollution and a toxic-free environment, strongly supporting the ‘polluter pays’ principle, producers’ responsibility and an upstream perspective, with impact reduction at the source and risk-based regulation adapted to local conditions, e.g. to safeguard resilient water resources for inhabitants and industry. Producer responsibility should be implemented such that the system does not impose a disproportionate administrative burden on the public sector;












11.


proposes the development of EU-level sectoral roadmaps for strategic technologies and basic materials, and calls for a coordinated approach to climate, energy, trade, and social policy instruments to ensure consistent and science-based industrial transformation;












12.


stresses that the industrial transition towards climate neutrality entails asymmetric territorial impacts, especially in regions with energy-intensive industries, resulting in job losses and the need to radically change the economic and development model in those regions. These structural changes need to be addressed with specific EU support to ensure a fair transition, including continued support to regions currently in transition. Welcomes the initiative to establish a European Fair Transition Observatory, and stresses the importance of closely monitoring the impact of the transition on the EU’s industries and regions and of having a sound evidence base for an informed legislative process;












13.


underlines the need to deepen the single market by harmonising rules and certification systems for products and services, streamlining procedures for cross-border operations, developing shared regulatory tools, platforms and databases;





Local and regional authorities as platforms for innovation, growth and transition









14.


underlines that strong and effective local and regional self-governance, with proper fiscal autonomy, is key to enabling the transition while respecting the principles of active subsidiarity, proportionality and the division of powers across the EU;












15.


highlights the important role of LRAs as key drivers of competitiveness and as facilitators of inclusive investment ecosystems, as they deliver the EU strategic agenda on the ground and effectively support innovation ecosystems with their profound knowledge of conditions and challenges – key for competitive advantages for industrial development; LRAs should be empowered through standardised but adaptable project development assistance to access finance instruments specific to strategic priorities such as the green and digital transitions;












16.


highlights LRAs’ capacity to create enabling conditions for industries and businesses through the physical and natural environment, infrastructure, planning, public services and utilities, citizen dialogues, public procurement and investment, education and skills supply;












17.


considers it necessary to promote measures to remedy distortions in industrial competitiveness caused by the island nature or extremely remote location of the regions. Specific programmes should be provided for to boost island and outermost regions’ industrial ecosystems;












18.


stresses the need to maintain the contribution of cohesion policy programmes as drivers for long-term planning and effective collaboration between various governmental levels towards a clean and just transition, development and growth;





Circular economy and resources – specialisation and innovation









19.


reiterates that a place-based strategy and smart specialisation strategies are essential for competitiveness and resilience, building on comparative advantages and enabling conditions for new technologies. Linking local strategies with EU-wide innovation and industrial transformation frameworks aligns cohesion policy tools with EU strategic objectives, for example, through implementing digital systems based on smart specialisation technologies in administrations to identify and assess mineral resources linked to critical raw materials. This ensures that regional initiatives address local needs while contributing to the green transition and securing supply chains;












20.


welcomes the New European Innovation Agenda to accelerate and strengthen research and innovation ecosystems and to address the innovation divide through initiatives such as regional innovation valleys, often with a focus on reducing reliance on fossil fuels and achieving a circular economy;












21.


stresses that smart specialisation strategies should, as a matter of priority, cover the green transition of industrial systems and the development of the circular economy as strategic axes. The aim is to ensure that innovation frameworks and industrial transition processes are more in line with one another;












22.


stresses the need to accelerate the uptake of circular economy principles of ‘reduce, reuse, recycle’; underlines that circularity must go beyond recycling to include smart product design for durability, repairability and reuse, considering material efficiency, as well as the development of functioning markets for secondary raw materials;












23.


welcomes in this context the proposal for a Circular Economy Act and the Trans Regional Circularity Hubs to promote smart specialisation and economies of scale for recycling; calls on the Commission to ensure appropriate involvement of LRAs, relevant networks and the CoR in the design of these hubs;












24.


insists that SMEs as integral parts of the industrial value chains at the heart of the Deal, should be supported, by specific and tailor-made actions through a holistic approach to meet their needs and harnesses their productive forces in all European regions, in bridging the innovation gap and transitioning towards net-zero emission technologies; points out that the public ownership criteria must not to disqualify local public services enterprises (LPSEs) from financing opportunities and administrative burden reduction measures open to SMEs;












25.


reiterates that LRAs play important roles as incubators for innovation through public-private-academic partnerships; stresses therefore the need to intensify collaboration between startups, SMEs, larger companies and public organisations. Shared testbeds, innovation procurement, digitalisation and access to financing all enable new solutions and upscaling;












26.


highlights the ability of LRAs to be drivers of industrial symbiosis in collaboration with commercial investors, where services of general interest – such as waste management, water supply and wastewater treatment, energy production and recovery – can contribute to clusters for businesses processing local, natural, material, energy and industrial resources, closing resource flows and producing renewable energy;












27.


calls for the removal of the ‘activity criterion’ in public-public cooperation as part of the revision of the public procurement directives, in order to provide greater legal clarity and enable public-public service collaboration, for example in waste treatment, energy, water supply and sewage treatment;





Circular economy and resources – permitting and planning









28.


emphasises the need for more efficient and parallel permitting procedures, with increased digitalisation and a reduced number of procedural steps, while allowing for sufficient time for local and regional democratic processes, in order to enable locally adapted solutions, especially in relation to requirements for fast-tracking for projects in sectorial files (e.g. the Net-Zero Industry Act and Critical Raw Materials Regulation);












29.


stresses the need to respect the differing divisions of tasks and local and regional competences in the Member States with regards to new EU legal mechanisms such as one-stop shops, single points of contact, acceleration areas and strategic projects to enable simplified permitting, e.g. for the spatial planning needed to enable the transition; the streamlining of permitting procedures for the transition of industry and societies to carbon neutrality must also allow for sufficient assessment to avoid disproportionate impact on biodiversity, the state of waters or environmental health;












30.


calls for EU regulations to enable the objectives of the circular economy and for the ‘polluter pays’ principle to apply to imported products from third countries in addition to European producers. This includes a need to address the growing direct imports of items such as clothes and electronics. Import must take into account measures and costs for disposal, recycling and other environmental impacts, and research efforts should be stepped up to determine such costs; Applying uniform rules to producers regardless of where headquarters and production sites are located is a condition for fair competition;





Investment and funding – mobilising capital









31.


underscores the importance of developing EU financial markets completing the Savings and Investments Union, substantially mobilising private capital and integrating public funds and private investment through existing and innovative mechanisms;












32.


considers that lending in general should be technology-neutral and market-driven, emphasising support for SMEs, while also seeing the need to target funding towards critical industries of all sizes and infrastructure, based on priorities for strategic autonomy and sustainability to de-risk investments;












33.


believes that the persisting investment gap requires an increased investment capacity at EU level based on shared-management, multi-level governance, the partnership principle, and a place-based approach, and that recourse to further common debt to finance joint investment projects, taking into account lessons learned from NextGenerationEU, should be part of the broader discussion on financing the EU’s long-term budget post-2027. Improving governance will be a key element in this debate;












34.


stresses the need to share public costs, income and risks for industrial development between LRAs, Member States and the EU, corresponding to local and regional responsibility for the infrastructure needed for industrial expansion, such as roads, water supply, energy, housing and education; also highlights the need for sharing risks for private costs for industrial development between public and private actors. Accelerated deployment and increased international competition increase risks for both industrial projects and public investments;












35.


points out that there is an urgent need to better coordinate EU funding to help LRAs and industry find the right resources and access financial instruments without heavy administrative burdens. The principle of multi-level governance must be respected and the involvement of the regional and local level in the management of EU funding allocated at national level must be guaranteed, while safeguarding against criminal use of public funds and ensuring that local and regional authorities can have easier access to blended finance instruments, concessional loans, and advisory support;












36.


underlines that the upcoming Competitiveness Fund, as part of the next multiannual financial framework, must uphold the principles of subsidiarity adopt a place-based approach and reinforce regional innovation ecosystems in a balanced way so that decarbonisation does not constitute a factor in further widening the competitiveness gap, while replacing multiple existing instruments with similar objectives. Clarity and transparency should also exist as regards the individual tools and their objectives, in order to guarantee their accessibility and thus maximise their impact on businesses of all sizes;












37.


stresses the need for structural collaboration between different funding institutions at EU level, including the European Investment Bank Group (EIB), the European Bank for Reconstruction and Development (EBRD), international financial institutions and private banks;












38.


welcomes the EU sustainable finance toolbox to support companies with clear sustainability targets and different starting points;












39.


sees a need to clear obstacles in taxation and accounting (including regarding the depreciation rules for new and old assets), while also pointing out that tax policy is a Member State competence;












40.


highlights the possibilities for the public sector and LRAs to create publicly owned financing institutes to lower the cost of funding through economies of scale and enhanced credit strength mechanisms;





Investment and funding – State aid









41.


welcomes the draft Clean Industrial Deal State Aid Framework aimed at enabling aid without unduly distorting competition and trade while preserving cohesion objectives, and primarily at working as a leverage tool to attract private investment, de-risking private investments and easing access for IPCEIs, also detailed in the CoR study (CoR Study ‘Experiences of regional authorities with Important Projects of Common European Interest (IPCEI) and suggestions for improvement’ – May 2025). The CoR draws attention to well-functioning examples, such as tender procedures and auctioning systems or contracts for difference (CfD) for renewable energy production;












42.


in addition to renewable energy, and in line with technological neutrality, calls for the Clean Industrial Deal State Aid Framework to clarify the State aid rules for the roll-out of nuclear supply chains and technologies, and facilitate the timely assessment of nuclear projects;












43.


proposes that State aid also support territorial cohesion through place-based eligibility criteria, ensuring that local public enterprises and cooperatives are not excluded due to public ownership structures;





Markets for industrial decarbonisation – public procurement









44.


recognises that public procurement provides great leverage for pursuing strategic interests and priorities, including sustainability and resilience. Such interests and priorities can be pursued in many contexts under the current procurement rules, are already applied in many EU procurement procedures, and could potentially be made easier to incorporate; welcomes the intention to introduce sustainability and circularity criteria and a European preference criterion in order to boost the demand for European clean products, when in line with priorities for strategic autonomy and sustainability. However, new legal demands must be proportionate, with a limited administrative burden and not infringing on the basic function of procurement to achieve contracts and supplies according to the needs and means of the procuring authority. Prioritising and balancing what specifically should be given the greatest weight in public procurement is still best done close to where the procurement is taking place and where the products and services will be used. The financial consequences of European preference criteria need to be addressed, including compensation for individual LRAs for substantial extra costs;












45.


underlines the possibility of facilitating procurement by using transparent product and environmental carbon footprint and voluntary decarbonisation labels; also advocates public procurement and private buyer initiatives, endorsed by the EU, to develop new products;












46.


underlines that different State aid rules applied to projects funded under centrally managed programmes such as Horizon Europe and those under cohesion policy funding lead to unnecessary distortions and should be streamlined;












47.


calls for making procurement directives function as lex generalis as part of the revision, setting out the ‘how to buy’ rules, with specific sectoral laws and standards to determine ‘what to buy’;












48.


calls for a systemic approach to the growing number of demands from ‘sectoral files’ (such as the Net-Zero Industry Act and the Energy Efficiency Directive and their reporting obligations), which impose a substantial administrative burden. A new, coherent reporting framework is needed to streamline data collection, including automated sustainability reporting, by moving to a transaction-based system from the current outdated notification-based system. Incorporating new technologies into administrative management, especially through artificial intelligence (AI), will make it possible to streamline this burden;












49.


calls for relaxing restrictions on modifications of contracts, for the uptake of new technology and innovation, and on maximum values and volume requirements for framework agreements;












50.


points out that properly structured procurement procedures can, and should, when relevant, integrate sustainability and innovation as criteria regardless of whether price or quality is the primary criterion;





Skills and quality jobs









51.


highlights the importance of LRAs collaborating with businesses, universities and vocational schools in order to create ecosystems of skills development, innovation and businesses in clean and circular technology and energy systems for building competence and addressing professional shortages, based on the needs within their region. More explicit recognition of the role of LRAs would enhance the effectiveness of the Clean Industrial Deal;












52.


stresses the importance of the quality of primary and secondary education for creating a flexible labour force, facilitating structural changes and improving matching on the labour market, and underlines the role of STEM education for the green and digital transitions;












53.


reiterates its advocacy for interoperable systems and EU-wide recognition of competences for the portability and recognition of skills and micro-credentials;












54.


welcomes the Union of Skills initiative, stressing that for education for young people and adults to be effective, it is also necessary to support retraining, upskilling and reskilling. Initiatives linking training to stable employment should be prioritised, as should efforts to reduce structural barriers;





Energy supply and affordability









55.


underlines that affordable and secure energy production is a prerequisite for industrial competitiveness and resilience; points out that EU companies face considerably higher electricity and gas prices compared to the US, China and other global actors, which presents a significant competitiveness disadvantage, especially for Europe’s energy-intensive industries;












56.


stresses the urgent need to increase production and supply of clean energy within the EU in order to lower energy bills for industries, businesses and households, ensure competitiveness and security of supply while decarbonising the energy sector and simultaneously addressing energy poverty;












57.


calls for a binding EU framework to phase out all direct and indirect fossil fuel subsidies by 2030, and to reallocate those funds to just transition priorities, including public transport, energy efficiency, and support for vulnerable households, with regards to technological, sectoral and regional specificities;












58.


points out that LRAs can be drivers of local supply of low-carbon electricity, heating, cooling and fuels, and of distribution and energy efficiency, through their operations and utilities and by supporting inhabitants, energy communities and commercial actors;












59.


underlines the need for the EU framework to maintain a technology-neutral approach for decarbonisation. Member States should have the flexibility to adopt relevant supply mixes and systems solutions, including carbon capture, use and storage, in line with climate, resilience and competitiveness targets; welcomes in this sense the recognition of nuclear power as a strategic technology for the EU’s decarbonisation in the Net Zero Industry Act (NZIA), and calls for the further promotion of nuclear technologies, including fusion, in the EU’s strategy towards decarbonisation and energy security;












60.


calls for a specific EU strategy and a financing framework for Carbon Capture, Utilisation and Storage (CCUS);












61.


advocates strengthening transmission and distribution networks with increased interconnection between national and regional grids to expand markets and increase the overall stability, resilience and security of energy supply. Member States must develop their energy systems ahead of growing demand and in close cooperation with neighbouring Member States;












62.


recognises the strategic role of ports as multimodal hubs for industrial decarbonisation, clean energy production, and logistics, including hydrogen distribution, low-carbon electricity supply to ships, port electrification, and circular economy services;












63.


calls for developing the EU electricity market regulation to increase the focus on peak power demand, e.g. by not regarding capacity mechanisms as State aid;












64.


calls for the rapid deployment of renewable energy, with due consideration of grid capacity and peak power;












65.


calls for the EU taxonomy not to exclude the use of biogas that fulfils regulated sustainability criteria, while ensuring a level-playing field between bio-energy and bio-plastics for biomass utilisation and availability in overall policy. In addition, efficient energy recovery from the incineration of waste that is unfit for recycling should be encouraged, with due regard to innovation and development in waste recycling;












66.


points out the potential of district heating for exploiting industrial side streams and recovering heat from industries and other sources, at the same time supporting the deployment of efficient heat pumps, especially in areas without district heating;












67.


highlights the need to exploit further possibilities for Member States to compensate industry, especially those considered critical and electro-intensive, SMEs and households for high electricity costs stemming from high profits in the electricity market due to marginal pricing, as well as to compensate industry for overly burdensome ETS-costs. At the same time, industry that has already phased out fossil emissions should not be disincentivised;












68.


points to the work carried out in the CoR on the affordable energy action plan and to its Green Deal Going Local Working Group;





Global markets and international partnerships









69.


advocates fair and free trade and industrial policies that work in tandem to protect regional industries from unfair external competition. The CoR highlights the need for clean trade and investment partnerships, including SMEs, to diversify supply chains, manage strategic dependencies and vulnerabilities and to forge mutually beneficial deals with global partners. Such partnerships must include sustainability, labour, and transparency standards to ensure fairness and resilience; A robust single market for secondary raw materials is also needed;












70.


anticipates more coordinated regulations for screening and surveying foreign direct investments to enable development and employment without compromising EU security interests.






Brussels, 2 July 2025.


The President


of the European Committee of the Regions

Kata TÜTTŐ
               





ELI: http://data.europa.eu/eli/C/2025/4412/oj
ISSN 1977-091X (electronic edition)