Explanatory Memorandum to COM(2025)85 - Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation

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dossier COM(2025)85 - Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation.
source COM(2025)85 EN
date 26-02-2025
EUROPEAN COMMISSION

Contents

1.

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


2.

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 report 1 and the Competitiveness Compass 2 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 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 Dialogues 3 . 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.

3.

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.

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 Energy 4 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.

4.

2.1.Lowering energy bills


Lowering the cost of electricity supply starts with fully implementing the reforms introduced in the recently adopted Electricity Market Design 5 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 Europe 6 . Fully recognising the Member States’ right to decide on the 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 Directive 7 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.


5.

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 permitting 8 , the Renewable Energy Directive 9 , the TEN-E Regulation 10 , the Critical Raw Material Act 11 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.


6.

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 regulatory oversight, align and strengthen energy and financial market rules (MiFID/REMIT 13 ), and reduce the administrative burden on companies trading on financial markets for energy (single reporting). It will cover various aspects of the regulatory setup 14 , 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.

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 infrastructureTimeline
Action Plan on Affordable EnergyQ1 2025
EIB pilot offering financial guarantees for PPA offtakers, with a focus on SMEs and energy-intensive industryQ2 2025
Legislative proposal on the extension of the Gas Storage RegulationQ1 2025
Clean Industrial Deal State aid frameworkQ2 2025
Recommendation on network chargesQ2 2025
Industrial Decarbonisation Accelerator Act:

·Speed-up permitting for industrial access to energy and industrial decarbonisation
Q4 2025
Recommendation on energy taxationQ4 2025
Guidance on CfD design, including on combining CfDs and PPAsQ4 2025
Guidance on promoting remuneration of flexibility in retail contractsQ4 2025
European Grids PackageQ1 2026
KPI – Increase economy-wide electrification rate from 21.3% today to 32% in 2030 15

KPI - Annually install 100 GW of renewable electricity capacity up to 2030 16 .


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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 Strategy 17 , 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 Directive 18 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).

8.

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 industries 19 .

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 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 Regulation 20 , 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 Regulation 21 , 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.

9.

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.

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 demandTimeline
Delegated act on low carbon hydrogen, providing regulatory certainty to producers of low carbon hydrogenQ1 2025
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

Q4 2025
Communication and legislative proposal on greening corporate fleets2025/2026
Revision of Public Procurement Directives to mainstream the use of non-price criteriaQ4 2026
KPI – Reach 40% of domestically produced key components of clean tech products on the EU market 22

KPI - Decrease external vulnerabilities for Clean Industrial Deal products as measured by the External Vulnerability Index from 0.19 today. (EXVI) 23 .

10.

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 decade 24 . Mobilising and 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.

11.

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 Regulation 25 . 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.

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.

12.

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 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

13.

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.

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 investmentTimeline
Increase InvestEU’s risk bearing capacityQ1 2025
IPCEI Design Support Hub2025
Clean Industrial Deal State aid frameworkQ2 2025
Recommendation to Member States to adopt tax incentives to support the Clean Industrial DealQ2 2025
Flagship call under Horizon EuropeQ4 2025
Pilot auction under the Innovation Fund2025
Industrial Decarbonisation BankQ2 2026

TechEU investment programme on scale-ups with the EIB Group and private sector2026
KPI: Increase the total volume of investment supporting industrial transition from EUR 52.7 billion 26

14.

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.

15.

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.

16.

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, 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.

Furthermore, the Commission will review the rules on the second-hand scheme contained in the VAT Directive 27 , 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 resourcesTimeline
First list of Strategic Projects under the Critical Raw Materials ActQ1 2025
Ecodesign Work Plan adoptionQ2 2025
EU Critical Raw Materials Centre for joint purchases and management of strategic stockpilesQ4 2026
Circular Economy ActQ4 2026
Green VAT initiativeQ4 2026
Trans-Regional Circularity HubsQ4 2026
KPI: Increase circular material use rate from 11.8% today to 24% 28 by 2030 29

17.

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 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.

18.

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.

19.

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.

20.

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 Regulation 30 , 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”.

The Commission will adopt guidelines by January 2026 on key concepts underpinning the Foreign Subsidies Regulation 31 (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 PartnershipQ1 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 loopholesQ3 2025

Trans-mediterranean Energy and Clean tech cooperation initiativeQ4 2025
Legislative proposal on an extension of CBAMQ1 2026
Guidelines on Foreign Subsidies RegulationQ1 2026

21.

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.

22.

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.

23.

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.

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 services 32 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 fairnessTimeline
Union of SkillsQ1 2025
Quality Jobs RoadmapQ4 2025
Guidance on social leasing for clean products2025
European Fair Transition ObservatoryQ1 2026
Skills Portability Initiative2026
Review of State aid GBER rules for social enterprises and recruitment of disadvantaged workersQ4 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 occupations 33 .

24.

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 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.

25.

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.

(1)

https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en#paragraph_47059

(2)

26.

COM (2025) 30


(3)

27.

COM (2024)163 final


(4)

28.

COM (2025) 79 final


(5)

29.

Directive (EU) 2024/1711; Regulation (EU) 2024/1747


(6)

30.

See section 4.3 for more details


(7)

31.

COM/2021/563 final


(8)

32.

Council Regulation (EU) 2022/2577


(9)

33.

Directive (EU) 2023/2413


(10)

34.

Regulation (EU) 2022/869


(11)

35.

Regulation (EU) 2024/1252


(12)

36.

Regulation (EU) 2024/1735


(13)

37.

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

(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)

38.

Directive (EU) 2023/959


(19)

See Industrial Decarbonisation Bank.

(20)

39.

Regulation (EU) 305/2011


(21)

40.

Regulation (EU) 2024/1781


(22)

41.

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.

(25)

42.

Regulation (EU) 2024/795


(26)

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

(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 ).

(30)

43.

Regulation (EU) 2019/452


(31)

44.

Regulation (EU) 2022/2560


(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

(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).