This document presents Clean Industrial Deal, published by the European Commission (EC) on 27 February 2025. This agreement is a response to the call of European industrial companies, which in their Antwerp Declaration of 20 February 2024 called for urgent action in the form of a European Industrial Pact to complement the EU Green Deal and secure quality jobs in Europe.

The Clean Industrial Deal is overarching strategic document outlining a set of measures to address Europe's main challenges: rising geopolitical tensions, slow economic growth and technological competition. It builds on previous documents (e.g. the EU Competitiveness Compass) but is more specific in planned measures to increase the resilience of production in the EU and at the same time supports industrial decarbonization. It focuses on energy-intensive industries and "clean technology" sectors, as well as on circular economyThe EC calls the Clean Industrial Deal a "transformational business plan", which brings together climate policy and competitiveness "under one umbrella growth strategy".

In addition to the general communication, the EC is preparing for 2025 specific sector initiatives for the automotive, steel and metalworking, chemical, sustainable transport and bioeconomy sectors:

• Industrial Action Plan for the Automotive Sector, scheduled for adoption on 5 March 2025, will focus on innovations in future technologies.
• Steel and Metals Action Plan, which will follow the strategic dialogue on 4 March 2025, will outline measures for ferrous and non-ferrous metals that are key to the green and digital transformation.
• Chemical industry package, expected at the end of 2025, will highlight the strategic role of the sector to strengthen competitiveness, modernisation and innovation.
• Investment plan for sustainable transport will prioritize low-carbon fuels for aviation and maritime transport, expanding charging infrastructure, and supporting the transition of the rail sector.
• Bioeconomy strategy It will improve resource efficiency, promote bio-based materials and reduce dependence on imported raw materials.
• European Ocean Pact will support innovation in blue clean technologies, offshore renewable energy sources and circular economy practices.

The Clean Industrial Deal is organized into six pillars, each of which contains a set of main policy initiatives for the coming years:

1. Affordable access to energy

• The EC considers affordable access to energy to be "cornerstone" Clean Industrial Deal. It wants to move towards an integrated EU single energy market.
• It identifies three objectives:
  • Reducing energy bills: Implementation of the proposal for adjusting the design of the electricity market (Directive and Regulation) and promotion of energy efficiency. It focuses on power purchase agreements (PPAs)State aid rules will be adapted to support renewable energy, industrial decarbonisation and clean technology production capacity. The EC will provide guidance to Member States on the proposal contract for differences and rules for cross-border forward capacity allocation.
  • The EC calls on Member States to swiftly conclude negotiations on the Energy Taxation Directive and reduced electricity-related taxation. In addition, it wants harmonize the draft tariff methodologies for network chargesIn relation to network systems, it is announced European Networks Package focused on network integration.
  • Ensuring well-functioning gas markets: In addition to the recently established EC Working Group on the Gas Market, the EC will launch a consultation with stakeholders on regulatory oversight and reducing the burden on companies trading in energy financial markets.
• Political measures: Affordable Energy Action Plan (Q1 2025), European Investment Bank Pilot Programme for Corporate PPAs (Q2 2025), Extension of the Gas Storage Regulation (Q1 2025), State Aid Framework for the Clean Industrial Deal (Q2 2025), Recommendation on Network Charges (Q2 2025). Recommendation on Energy Taxation (Q4 2025), Guidance on the Design of Contracts for Difference (Q4 2025), Guidance on Promoting Remuneration of Flexibility in Retail Contracts (Q4 2025), European Network Package (Q1 2026).
• Accelerating clean energy deployment and manufacturing: The EC wants shorten the deadlines for issuing permits. Act on Accelerating Industrial Decarbonization sets out measures to address obstacles in permitting procedures related to industrial access to energy and industrial decarbonisation.

2. Strengthening supply and demand for clean products

• The EC believes that businesses will only invest in decarbonised products if they are certain of the existence of a market for such products.
• It establishes two axes to strengthen their demand and supply:
  • Introduction of non-price criteria in public procurement and incentives for private purchases: The Act on Accelerating Industrial Decarbonization will introduce resilience and sustainability criteria (e.g. cleanness, circularity, cybersecurity) to support supply in energy-intensive sectors. In addition, the EC will propose revision of the public procurement framework, so that public procurement in strategic EU sectors can take into account sustainability, resilience and European preference criteria. The EC also wants to address private procurement in the future, for example by including requirements and non-price criteria. In this context, the Act on Accelerating Industrial Decarbonisation will introduce voluntary labelling of the carbon intensity of industrial productsTo simplify the application of incentives for decarbonisation, carbon accounting methodologies will be unified.
  • Promoting the use of renewable and low-carbon hydrogen: The EC is required to adopt legislation on low-carbon hydrogen, which will establish a dedicated regulatory framework. It aims to clarify the rules for the production of such hydrogen. As part of Hydrogen Bank (Hydrogen Bank) is launching a call with a budget of EUR 1 billion. In addition, it plans to launch hydrogen mechanism to mobilize and connect buyers and suppliers.
• Political measures: Delegated Act on Low Carbon Hydrogen (Q1 2025), Act on Accelerating Industrial Decarbonisation (Q4 2025). Communication and legislative proposal on the greening of company vehicle fleets (2025/2026), revision of public procurement directives to take into account non-price criteria (Q4 2026).

3. Public and private investment

• The EC announces that the Clean Industrial Deal will address the needs of EU industry in immediate access to capital through the mobilization of more than EUR 100 billion to support the production of clean technologies in the EU. This should include EUR 1 billion in guarantees within the current EU multiannual financial framework.
• The EC identifies three policy directions to mobilise public and private investment:
  • Strengthening funding at EU level: The EC wants new funding opportunities under the EU Innovation Fund to increase support for selected projects that have received Seal of Sovereignty within the framework of the Strategic Technology Platform for Europe (STEP) Regulation. It also wishes to see further alignment of funding criteria for the EU Innovation Fund and national funding with the aim of speeding up the approval of state aid. The EC will propose Industrial decarbonization bank with the aim of mobilising funding of EUR 100 billionAhead of the revision of the Emissions Trading System (ETS) Directive planned for 2026, the EC will launch pilot auction with a budget of EUR 1 billion for the decarbonisation of certain industrial processes. In addition, the EC assures that it will launch, as part of its work programme for 2026-2027, the "Horizon Europe Flagship Call" with a budget of EUR 600 million to support projects ready for implementation. It will also be proposed merger strategy, which will include the creation of public-private partnerships to accelerate commercialization.
  • Leveraging private investment: The EC wishes amend the InvestEU Regulation with the aim of improving its risk-bearing capacity. The EC aims to mobilise approximately €50 billion in additional financing and investmentThe InvestEU guarantee instruments will be used by the European Investment Bank (EIB) Group. In addition, the EC plans to new initiatives in cooperation with the EIB Group to support the sectors targeted by the Clean Industrial Deal.
  • State aid framework for the Clean Industrial Deal and other support and facilitation: EC until 2025 will change EU state aid rulesThe EC will provide Member States with longer five-year planning horizon and state aid rules are simplify in order to further support the goals of the Clean Industrial Deal. It is planned faster approval of state aid for decarbonisation and clean technology projects. The EC is trying to reduce bureaucracy related to State aid during the upcoming revision of the General Block Exemption Regulation (GBER). It also wants accelerate new important projects of common European interest (IPCEI)In addition, they should Member States' corporate tax systems to support green business cases, e.g. through shorter depreciation periods for clean technology assets and tax breaks for businesses in certain sectors. This will be linked to the proposed by gradually reducing and/or eliminating fossil fuel subsidies.
• Political measures: Increasing the risk-bearing capacity of InvestEU (Q1 2025), IPCEI proposal support hub (2025), Clean Industrial Deal state aid framework (Q2 2025), Recommendation to Member States on the adoption of tax incentives (Q2 2025). Horizon Europe flagship call (Q4 2025), Innovation Fund pilot auction (2025), Industrial Decarbonisation Bank (Q2 2026), TechEU investment programme for scale-ups (2026).

4. Strengthening the circular economy

• According to the EC, the EU needs improve the procurement of primary and secondary raw materialsto reduce exposure to "unreliable suppliers" and supply disruptions through more innovative circularity.
• The EC envisages two perspectives for strengthening the circular economy:
  • Rapid implementation of the Critical Raw Materials Act: EC prioritizes implementation EU Critical Raw Materials Act, including through a first list of strategic projects to be submitted by March 2025. The EC will also to buy raw materials together on behalf of the interested companies through EU Centres for Critical Raw Materials.
  • Circular economy-specific initiatives: Circular Economy Act of 2026 accelerate the "transition to a circular economy" through the free movement of circular products, secondary raw materials and waste. Simplify rules on e-waste and harmonises "end-of-waste" criteriaThey should also be introduced incentives to increase the use of scrap metalThe EC also focuses on requiring the use of new sources of raw materials, such as recycled and bio-based materials, to replace other materials such as virgin fossil materials in plastics. As regards batteries, the Commission will take measures to address the shortage of "black matter" faced by the EU recycling industry. In the area of taxation, the Commission will review the rules on the special scheme for the application of value added tax (VAT) to second-hand goods contained in the VAT Directive to address the embedded VAT in second-hand products.
• Political measures: First list of strategic projects under the Critical Raw Materials Act (Q1 2025), adoption of the Ecodesign Working Plan (Q2 2025), EU Critical Raw Materials Hub (Q4 2026), Circular Economy Act (Q4 2026), Green VAT initiative (Q4 2026), Trans-regional Circularity Hubs (Q4 2026).

5. Global markets and international partnerships

• The EC believes that achieving the goals of the Clean Industrial Deal is linked to the EU's ability to act at international level.
• It identifies three approaches:
  • Partnerships for clean trade and investment: The EC wants to continue signing and full implementation of free trade agreements (FTAs)In addition, FTAs will complement more targeted and flexible Clean Trade and Investment Partnerships (CTIP). CTIPs should focus on managing the EU's strategic dependencies and securing its position in global supply chains. In addition, the EC predicts that under the new Pact for the Mediterranean there will be an initiative for Mediterranean cooperation in the field of energy and clean technologies aimed at stimulating investment in renewable energy sources.
  • Improving the Carbon Border Offset Mechanism (CBAM): The EC proposes significantly simplify CBAM in order to reduce administrative burden (on the same day as the Clean Industrial Deal, the EC presented a proposal for an EU regulation on simplifying the CBAM). In the second half of 2025, the EC will present CBAM revision, in which it will assess its extension to other EU ETS sectors and downstream products. The report will assess indirect emissions and carbon leakage risks for EU exports and set out a strategy to address CBAM circumvention. A legislative proposal is expected to follow in the first half of 2026. In addition to these efforts, the EU will continue to support the decarbonisation of partner countries, promote carbon pricing and international carbon markets through Working Group on International Carbon Markets and Carbon Pricing Diplomacy.
  • Ensuring a level playing field for EU industry: The EC will propose measures to ensure that foreign investment in the EU better contributes to the competitiveness of EU industry. It proposes that EU Member States may consider conditions such as ownership of facilities, recruitment of EU-based staff, requirements for joint ventures or transfers of intellectual property in cases where foreign investment is involved. The EC also considers it important to ensure that foreign investments did not undermine the security and public order of the EUBy January 2026, it will adopt guidelines on the main concepts on which it is based. EU Foreign Subsidies Regulation (FSR)It will also benefit from ex officio investigations within the FSRThe EC will continue to use the available trade defence instruments (i.e. anti-dumping and anti-subsidy duties) and will consider whether additional instruments are needed.
• Political measures: Launch of CTIP negotiations (Q1 2025), simplification of CBAM (Q1 2025), revision of CBAM scope (Q3 2025), Mediterranean Energy and Clean Technology Cooperation Initiative (Q4 2025), legislative proposal to extend CBAM (Q1 2026), guidelines on the Foreign Subsidies Regulation (by January 2026).

6. Skills and quality jobs

• The EC wants all people, communities and businesses to benefit from the ecological transition.
• It identifies two goals of the Clean Industrial Deal:
  • Skills support: EC to propose umbrella initiative "Skills Union"to provide the population with the necessary skills to prosper and contribute to the demands of employers, particularly in the sectors targeted by the agreement.
  • Supporting workers during the transformation: Introduces himself/herself A roadmap for quality jobs to support EU industry in ensuring an attractive working environment and support for transitioning workers. As part of the review of the General Block Exemption Regulation (GBER), the EC will assess whether state aid rules can be updated to incentivise investment in the workforce.
• Political measures: Skills Union (Q1 2025), Quality Jobs Plan (Q4 2025), Guidance on social leasing of clean products (2025), European Just Transition Observatory (Q1 2026), Skills Portability Initiative (2026), Revision of State aid rules under the GBER (Q4 2027).

The document highlights that we live in geopolitically turbulent times and Europe is seeking to redefine its role on the global stage and strengthen its ability to protect its unique model of social market economy. The Clean Industrial Deal represents a large number of new EU policies, which will affect all actors operating in the EU single market. It brings with it new regulatory challenges, but also many political opportunities (e.g. new financing options) and relaxation of the existing EU regime (e.g. state aid and deregulation). The year 2025 is referred to as the year massive changes in EU policies. Spring