Clean Industrial Deal
The European Union releases the Clean Industrial Deal, aimed at accelerating decarbonization of industries and promoting the development of a circular economy.
The EU believes that the climate crisis, competitiveness, and economic resilience are the three biggest challenges. Therefore, EU needs to issue policies in energy intensive and clean technology industries to establish a sustainable industrial ecosystem.
Related Post: International Energy Agency Releases Emerging Market Clean Energy Report
Introduction to Clean Industrial Deal
The Clean Industrial Deal focuses on six business drivers, including:
Affordable Energy
The EU believes that affordable energy is the foundation of the Clean Industrial Deal, and has released the Action Plan for Affordable Energy, which includes three actions:
- Reduce energy costs: The EU plans to revise the recently adopted Electricity Market Design and collaborate with the European Investment Bank to launch a pilot of Power Purchase Agreements for businesses. The European Investment Bank will launch a power grid manufacturing plan to increase energy investment.
- Accelerate the promotion of clean energy: The EU plans to propose specific measures in the Industrial Decarbonization Accelerator Act to address the issue of decarbonization permits, while accelerating the application of digital technology to accelerate clean energy development.
- Ensure the normal operation of the natural gas market: The EU has established a Gas Market Task Force, which plans to comprehensively review the EU natural gas market, coordinate energy market rules, and release a report this year.
Lead Markets
The EU believes that it is necessary to provide leading markets for clean technologies and products for businesses to promote their investment. These measures include:
- Publish public procurement incentives: The EU plans to introduce sustainable standards to promote clean technology development in energy intensive industries in Europe, which will incentivize sustainable production. The EU plans to revise the public procurement framework in the future and develop voluntary carbon intensity labels for industrial products, providing incentives for energy intensive products.
- Promote the application of renewable and low-carbon energy: The EU will pass a low-carbon energy bill in the first quarter of this year and launch the Hydrogen Mechanism through the European Hydrogen Bank in the second quarter. At the same time, the effectiveness of the hydrogen energy framework will be studied to reduce obstacles to the development.
Financing
The EU plans to increase investment by 480 billion euros annually in energy and industrial innovation, and the Clean Industrial Deal will deploy over 100 billion euros to achieve established goals. Specific measures include:
- Strengthen EU level funding: The EU will provide financial support for industrial decarbonization and clean technologies through the Innovation Fund and invest 6 billion euros by 2025. The EU will also establish a new Industrial Decarbonization Bank, raising 100 billion euros to support the transition technology.
- Utilize private investment: The EU will revise the InvestEU regulations to enhance the risk bearing capacity of funds and invest 50 billion euros in key areas. The European Investment Bank will collaborate with private investors to deploy the TechEU to support the development of clean energy technologies.
- Improve the effectiveness of national aid: The EU will release the Clean Industrial Deal State Aid Framework, which provides member states with a five-year planning period, simplifies national aid principles, and improves efficiency.
Circularity and Access to Materials
The EU plans to make recycling the core of its decarbonization strategy, expanding the recycling potential of the remanufacturing market from the current 31 billion euros to 100 billion euros by 2030. Specific measures include:
- Implement the Critical Raw Material Act: The EU plans to prioritize the implementation of the Critical Raw Material Act, ensure diversified value chain supply, and establish an EU Critical Raw Material Centre to collaborate with member states in procuring raw materials.
- Develop a circular economy: The European Union will pass the Circular Economy Act in 2026 to accelerate circular transition and collaborate with stakeholders to determine circular transition actions and measures.
Global Markets and International Partnerships
The EU plans to establish sustainable industrial value chains with other countries, including:
- Establish Clean Trade and Investment Partnerships: The EU will provide trade and investment opportunities through Clean Trade and Investment Partnerships and collaborate with other countries to achieve green transition.
- Improve the Carbon Border Adjustment Mechanism: The EU will simplify the Carbon Border Adjustment Mechanism, reduce industry burden, and encourage carbon pricing. The EU will also release a comprehensive review report in the second half of 2025 to determine follow-up actions.
- Ensure a fair competitive environment: The European Union will provide guidance on the Foreign Subsidies Regulation in 2026 to provide a basis for risk assessment in the competitive environment.
Skills
The EU believes that decarbonization and circular transition are closely related to the workforce, and specific measures include:
- Support skills development: The EU plans to establish a Union of Skills, simplify industry skills training frameworks, review existing training programs, and focus on human resource investment.
- Support labor transition: The EU will improve the Just Transition Fund to ensure inclusive and equitable green transition and release a Quality Jobs Roadmap to assist the labor force during the transition period.
Reference:
