New EU package: How the Clean Industrial Deal aims to decarbonise industry while strengthening growth, resilience, and competitiveness.
In its communication dated 26 February 2025, the European Commission presented the "Clean Industrial Deal" (CID) – a comprehensive decarbonisation strategy for European industry to be implemented in the current legislative period.
Why a deal on decarbonisation now?
Against the backdrop of high energy prices, the tense global political situation and increasing international competition, the European economy is under considerable pressure.
In the CID, the Commission identifies the climate crisis, maintaining competitiveness and strengthening economic resilience as current key challenges for the EU. The new plan therefore provides for concrete measures to use decarbonisation as a driver for economic growth in Europe. The aim is to transform Europe into a climate-neutral, competitive, and resilient economy. The planned measures are therefore intended to reduce energy costs, create skilled jobs, and secure an investment-friendly environment for companies.
This article provides an initial overview of the CID, while later articles in this blog series will look at individual aspects in more detail.
Focus on energy-intensive sectors and clean technologies
The CID is intended to address all phases of the industrial value chain, with a particular focus on energy-intensive sectors such as steel, metals, and chemicals. In an environment of high costs, global distortions of competition and regulatory complexity, these sectors face particular challenges in decarbonising their processes and managing the transition to clean energy sources.
Another focus of the CID is the promotion of clean technologies. These are seen as key to industrial transformation, to securing Europe's competitiveness and to building a resource-efficient, climate-neutral economy.
The deal also places emphasis on the circular economy: through increased recycling, reuse and sustainable production, waste is to be reduced, and the lifespan of raw materials significantly extended. In a time when resources are scarce, it is considered essential for the EU's economic resilience to reduce dependencies on third countries and make more efficient use of existing materials.
Comprehensive measures planned
The CID provides for a range of legal and financial measures. In addition to new instruments, existing legal acts are also to be adapted and supplemented. The CID is to be implemented across all sectors. This is to be achieved in particular through targeted action and investment plans for specific industries, such as the automotive, steel, metal and chemical industries, as well as the transport sector.
The measures centre on access to affordable energy through lower energy costs, accelerated deployment of renewables, clean production, and the strengthening of gas markets. Another focus is on green lead markets, where clean supply and demand are to be incentivised in particular through appropriate criteria under public procurement law and the promotion of renewable and low-carbon hydrogen. The focus remains on financing through public and private investment, which is why the adoption of a corresponding state aid framework is specifically foreseen. Finally, there is a focus on the topics of circularity and securing raw materials, global trade, and international partnerships, as well as the promotion of highly skilled jobs and corresponding skills.
In the context of the decarbonisation of industry, the following measures in particular, which are intended to be both interlinked with each other and combined with other planned CID measures, can already be highlighted.
Industrial Decarbonisation Accelerator Act
As the Commission recognises lengthy permit-granting procedures to be a major problem for energy-intensive industries that seek to electrify, it is planning the "Industrial Decarbonisation Accelerator Act" (IDAA) for the last quarter of 2025. The IDAA is expected to introduce the following measures to eliminate bottlenecks in connection with industry's access to energy and decarbonisation:
- Accelerating permitting procedures: The central aim of the IDAA is to significantly speed up permit-granting procedures without neglecting environmental standards. This is to be achieved primarily through increased digitalisation and a risk-based approach. For example, experience with the EU Emergency regulation on accelerating the deployment of renewable energy is being taken into account.
- Priority projects: Another pillar of the IDAA is the establishment of criteria for identifying priority projects and clusters for decarbonisation. This allows official responsibilities to be bundled into specific groups and resources to be concentrated more effectively on facilitating large-scale industrial projects.
- Lead markets: The third pillar of the IDAA is the targeted development and protection of European lead markets for low-carbon products. This is intended to stimulate demand for "clean" products and thus investment in climate-friendly industrial technologies. This will be supported by the introduction of criteria such as resilience, sustainability, "made in Europe" and a voluntary carbon intensity label.
Revision of the Public Procurement Framework
By introducing the resilience, sustainability and "made in Europe" criteria as part of the IDAA, the Commission hopes to extend the application of non-price criteria to the EU budget, national funding programmes and public and private procurement for the benefit of energy-intensive industries. In addition to this short-term signal, however, the Commission is also planning to present a proposal to revise the Public Procurement Framework in 2026. This proposal will take greater account of the sustainability, resilience and European preference criteria set out in the CID with regard to public procurement.
CISAF
On 25 June 2025, the Commission adopted the "Clean Industrial State Aid Framework" (CISAF) as an instrument for financing the objectives of the CID. This replaces the Temporary Crisis and Transition Framework (TCTF), which the Commission adopted in the course of the war of aggression against Ukraine. The new guidelines build heavily on the two transformative sections of the TCTF, with the Commission placing particular emphasis on aid schemes. With the CISAF, the Commission is introducing and simplifying the rules for the following main areas set out in the CID:
- Measures accelerating the rollout of clean energy
- Measures providing support for electricity costs for energy-intensive users
- Measures facilitating industrial decarbonisation
- Measures ensuring sufficient manufacturing capacity in clean technologies
- Measures to de-risk private investments
These aid options are in addition to the existing options under the 2022 Guidelines on State aid for climate, environmental protection and energy (CEEAG).
Industrial Decarbonisation Bank
Another means of financing the CID's objectives is the Industrial Decarbonisation Bank, which the Commission is planning will have a budget of up to EUR 100 billion. This is to be financed through the Innovation Fund as well as through the ETS system and a revision of InvestEU. It will be under the supervision of the Competitiveness Fund, which has yet to be established, and is planned for the second quarter of 2026.
A continuation of or a departure from the Green Deal?
The central component of European climate policy to date has been the "European Green Deal", which was presented at the end of 2019. The European Commission describes the CID as a business plan for Europe that is intended to achieve the goals of the Green Deal (climate neutrality across the EU by 2050) while also increasing Europe's competitiveness. At the same time, the Draghi Report on the competitiveness of the EU has contributed significantly to the development of the CID.
While the "Green Deal" focuses on achieving climate neutrality by 2050, the CID's focus as a "Clean Deal" is on concrete implementation in industry. The CID can therefore be seen as an industry-specific EU strategy for the decarbonisation and growth of the European economy and is intended to integrate with the aims of the Green Deal rather than replacing it.
Prospect for companies under the Clean Industrial Deal
The CID brings with it extensive legal innovations that will be of major importance to companies in the EU. Energy-intensive companies in particular can expect the measures aimed at reducing energy costs to have a positive impact. In addition, the expansion of corresponding lead markets will create new demand for clean technologies and products, with corresponding sustainability criteria also likely to play a role in public procurement. Regulatory and bureaucratic hurdles could be reduced through accelerated permit-granting procedures. Following the adoption of the CISAF, Germany now has the opportunity to announce corresponding regulations that can increase planning and investment security for companies with sustainable operations. Whether and how government authorities will make use of this remains to be seen.
However, the CID will also confront companies with higher investment costs, for example for retrofitting existing facilities, investing in low-carbon production methods and meeting new requirements for resilience, sustainability, and circularity. At the same time, new regulatory requirements and public procurement criteria are forcing companies to make increased efforts to adapt. Companies are therefore advised to familiarise themselves with the planned measures at an early stage and adapt their corporate strategies accordingly.
