The European Commission has presented its Clean Industrial Deal that aims to accelerate decarbonization, while securing the future of manufacturing in the European Union.

The deal, described by the commission as “a bold business plan to support the competitiveness and resilience of our industry”, will support the European Union’s industries, which are facing high energy costs, and fierce and “often unfair global competition”.

Decarbonization is positoned by the deal as a powerful driver of growth for European industries. This framework can drive competitiveness as it gives certainty and predictability to companies and investors that Europe remains committed to becoming a decarbonized economy by 2050.

The commission is also taking actions to make its regulatory environment more efficient while reducing bureaucratic hurdles for businesses. These actions, the commission notes, are the results of the active engagement with industry leaders, social partners and civil society in the context of the Antwerp Declaration for a European Industrial Deal and the European Commission’s Clean Transition Dialogues.

Decarbonize, reindustrialize, innovate

Energy-intensive industries and cleantech are two closely linked sectors that the deal mainly focuses onThe deal focuses mainly on two closely linked sectors –. The energy-intensive industries sector requires urgent support to decarbonize and electrify, as it faces high energy costs, unfair global competition and complex regulations, which have harmed its competitiveness.  And cleantech is seen as being at the heart of future competitiveness and growth, as well as being crucial for industrial transformation.

As well, circularity is a central element of the deal, the commission states, as the EU needs to maximize its limited resources and reduce overdependencies on third-country suppliers for raw materials. 

The deal presents measures strengthening the entire value chain and serves as a framework to tailor action in specific sectors. The commission will present an action plan for the automotive industry in March and one for steel and metals this spring. Other tailored actions are planned for the chemical and clean tech industry.

Business drivers

For EU industry to succeed, the plan indentifies the following business drivers as necessary:

• Lowering energy costs – The commission will speed up the roll-out of clean energy, accelerate electrification, complete the EU’s internal energy market with physical interconnections, and use energy more efficiently and cut dependence on imported fossil fuels. 
• Boosting demand for EU-made clean products – This is done by introducing sustainability, resilience and made-in-Europe criteria in public and private procurements, launching a voluntary carbon intensity label for industrial products, simplifying and harmonizing carbon accounting methodologies, and informing consumers and allowing manufacturers to reap a premium on their decarbonization efforts.
• Financing clean transition – In the short-term, the deal will mobilize over €100 billion ( US$ 104.46 billion ) to support EU-made clean manufacturing. This amount includes an additional €1 billion guarantees under the current Multiannual Financial Framework.

EIB support

The European Investment Bank ( EIB ) Group will also launch a series of concrete new financing instruments to support the deal, with a:

• ‘Grids manufacturing package’ to provide counter-guarantees and other de-risking support to manufacturers of grid components
• European Commission-EIB pilot programme of counter-guarantees for power purchase agreements undertaken by small and medium-sized enterprises and energy intensive industries
• Cleantech guarantee facility under the Tech EU programme powered by InvestEU.

Circularity, access to materials

As critical raw materials are key for the sustainability of EU industry, the bloc, it says, will aim to secure access to such materials and reduce exposure to unreliable suppliers. At the same time, placing circularity at the core of the EU’s decarbonization strategy, the commission argues, helps maximising the EU’s limited resources. The commission will therefore:

• Set up a mechanism enabling European companies to come together and aggregate their demand for critical raw materials
• Create an EU Critical Raw Material Centre to jointly purchase raw materials on behalf of interested companies, as joint purchases create economies of scale and offer more leverage to negotiate better prices and conditions
• Adopt a Circular Economy Act in 2026 to accelerate the circular transition and ensure that scarce materials are used and reused efficiently, reduce global dependencies, and create high-quality jobs, with the aim of having 24% of materials circular by 2030.

Acting on global scale

The EU, the commission points out, needs reliable global partners more than ever. In addition to ongoing and new trade agreements, it will soon launch the first Clean Trade and Investment Partnerships, which will diversify supply chains and forge mutually beneficial deals.

At the same time, the commission, it states, will act even more decisively to protect its industries from unfair global competition and overcapacities through a range of trade defence and other instruments. The commission will also simplify and strengthen the Carbon Border Adjustment Mechanism.

Skilled workforce

A Union of Skills will be established, the commission says, that invests in workers, develops skills and creates quality jobs, and it will use up to €90 million to help reinforce sectoral skills for strategic industries linked to the deal.

“Europe is not only a continent of industrial innovation, but also a continent of industrial production,” adds European Commission president Ursula von der Leyen. “However, the demand for clean products has slowed down, and some investments have moved to other regions.

“We know that too many obstacles, from high energy prices to excessive regulatory burdens, still stand in the way of our European companies. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”