The European Union (EU) has launched a new initiative aimed at aligning its ambitious climate goals with external action: Clean Trade and Investment Partnerships (CTIPs)These partnerships, initiated within the framework of Clean Industrial Deal, represent a key tool for the EU to secure its competitive position while adhering to its climate and competitiveness agenda. Their main objective is to reshape dependencies in global supply chains, support cooperation with partner countries in the field of clean energy and clean technologies and support decarbonisation-oriented industrialisation.

The first CTIP negotiations were launched in March 2025 with South Africa. These partnerships are intended to bridge the gap between complex, time-consuming Free Trade Agreements (FTAs) and less binding instruments such as Memoranda of Understanding (MoUs) on critical raw materials. Unlike MoUs, CTIPs offer a more flexible, targeted and faster approach to sectoral agreements that are essential for strategic zero-emission value chains, for example in the field of battery components or steel.

Reconciling industry and climate

The success of CTIPs depends on their ability to bring about measurable change and support green industrialization with partners. A key condition is the alignment of EU industrial policies and priorities with the partners' objectives. EU partners seek green industrialisation, added value and just transitionsTherefore, CTIPs should serve as a platform for dialogue and joint prioritization that are directly linked to decarbonization and industrial development.

Regulatory cooperation is a fundamental pillar of CTIPs. It should combine the EU's objectives in the area of clean procurement – i.e. incentives for purchasing products based on criteria that go beyond price – with common sustainability standardsThese partnerships must avoid prescription and instead identify common areas of cooperation.

Mobilizing finance for climate goals

To be credible and effective, CTIPs need to mobilize additional investment on a large scale. Public investment alone is not enough, and many developing countries are constrained by high capital costs. CTIPs should therefore combine additional public financing with innovative financial instruments – such as guarantees and blended finance – to reduce risks and mobilise private finance for clean technologies and green industries.

The EU also has the opportunity to support partners in accessing vertical climate fund (centralised structures providing finance for climate action) and unlock early-stage investments in green industries through additional guarantees and development finance. Another option is to channel Global Green Bonds Initiative European Investment Bank (EIB) to help partners develop their green bond market.

South Africa: A test of efficiency in decarbonization

The EU's partnership with South Africa serves as an important test of how trade, investment and decarbonization integrate into a new generation of strategic partnerships. South Africa is a key trading partner of the EU with strong ambitions in the area of hydrogen and battery production.

Despite the already existing Just Energy Transition Partnership (JETP), the success of the CTIP will depend on demonstrating its added value. However, open questions directly related to climate remain: for example, whether the EU can effectively support decarbonization of the liquid fuels sector in South Africa (which is a key demand of the South African side), and how tensions related to The EU Carbon Border Offset Mechanism (CBAM).

In conclusion, the CTIP negotiations are an opportunity for the EU not only to address geoeconomic dependencies but also to structure investments for sector-specific decarbonization, thereby establishing the EU as a reliable partner in global transformation. JRi