The European Commission has presented the long-awaited Clean Industrial Deal, which aims to reduce European energy prices while enhancing competitiveness. Our rapid analysis below summarizes to what extent the Agreement supports the greening of industry and how much it caters to industrial lobbying interests.

As the European Green Deal, the flagship project of the Ursula von der Leyen-led Commission, has faced criticism from various sides — particularly blamed for rising energy prices and the declining competitiveness of European industry — von der Leyen visibly sought to address these mostly right-wing critiques in her political guidelines for the newly established Commission. Alongside sustainability messages, she prioritized sustainable prosperity and competitiveness. At the same time, she emphasized that the European Union would not deviate from the goals set out in the European Green Deal. The Clean Industrial Deal, introduced on the 26th, is intended to support the greening and competitiveness of industry. This clearly signals that economic development, alongside environmental goals, will be a key focus in the coming period.

According to the Commission’s expectations, the Clean Industrial Deal may facilitate the sustainable transformation of heavy industry, while preventing the relocation of carbon emissions abroad. Additionally, it could expand and modernize the electricity grid, reform public procurement rules to prioritize “clean” technologies produced in Europe, and stimulate local innovation. To reduce energy prices, the Commission has also issued a separate action plan with concrete measures. Finally, it may establish new trade partnerships that reshape supply chains and commercial practices.

Assessment of the Clean Industrial Deal

It is crucial that the Clean Industrial Deal not only promotes the competitiveness of EU industries by placing them at the forefront of the energy transition but also fully integrates other key objectives such as sustainability, EU cohesion, and a just transition. In this context, we present five positive and five negative aspects of the Deal.

Five Positive Aspects

1. A long-overdue focus on industrial decarbonization – Achieving the EU’s 2030 and 2050 climate goals and climate neutrality is impossible without the green transformation of industry. It is therefore welcome that the Commission is finally prioritizing this sector with policies addressing decarbonization, energy prices, circularity, and innovation.
2. Significant financial resources for green goals – The establishment of a €100 billion Industrial Decarbonization Bank, along with an additional €50 billion for clean technology support, shows a strong commitment. Furthermore, the European Investment Bank will launch dedicated industrial decarbonization programs.
3. A strong labor market and social policy focus – A skilled workforce is essential for the green transition. The Agreement includes the establishment of the Union of Skills to support workforce retraining and significant investments in vocational training. These elements are crucial, as many Europeans currently feel that the green transition focuses only on business interests, ignoring social challenges and solutions. However, the transition cannot succeed without broad social support.
4. Boosting demand for European clean products – The Industrial Decarbonization Accelerator Act and new sustainability-oriented public procurement rules aim to increase demand for European clean products. This supports local industries, reduces emissions from transportation, and helps European businesses stay competitive.
5. Reducing bureaucratic complexity – The Deal aims to address long-standing criticisms of EU bureaucracy by simplifying overly complex regulations. This effort is reinforced by the Omnibus Regulation, which seeks to streamline EU rules. The Commission estimates that reducing sustainability and investment-related regulations could save €6 billion in administrative costs.

Five Negative Aspects

1. Insufficient focus on reducing energy demand – While lowering energy prices is a key goal, the Deal does not sufficiently emphasize reducing energy consumption. A product becomes more competitive not only when energy prices are low but also when less energy is used in production. Addressing both aspects is essential.
2. Overproduction of “clean” products is not inherently sustainable – The goal of the Deal should not be to ramp up manufacturing simply because products are labeled “clean.” Production still consumes materials and energy. With finite resources and raw materials, industrial policies should promote qualitative rather than quantitative growth.
3. Potential increase in EU-reported emissions – While supporting European products is positive, relocating production back to Europe could increase the EU’s reported emissions unless manufacturing processes are genuinely greener. Many emissions currently appear in other countries’ data due to the outsourcing of production. Bringing manufacturing back without significant emission reductions will make it harder to meet climate targets.
4. A narrow definition of “clean industry” – Beyond emission reductions, the Deal does not address other forms of pollution. The chemical industry, for instance, is not adequately covered, as the Deal does not include measures for detoxifying, monitoring, or cleaning industrial sites. Europe must prioritize pollution-free production capacity.
5. The need for continued environmental ambition – The EU must remain committed to environmental protection, sustainable resource use, and climate action through emission reductions, clean technology adoption, and innovation. The 2050 climate neutrality target must remain central, and the 2040 climate goals should be strengthened. Competitiveness is meaningless in an environmentally collapsing world where even basic needs cannot be met. While reducing bureaucracy is welcome, it must not come at the cost of weakening environmental regulations or goals.

Conclusion

Overall, the Clean Industrial Deal is a strong tool for industrial decarbonization. It reinforces two key drivers of transforming energy-intensive industries: electrification with renewables and circularity. However, the details of implementation will be critical. Europe must stay on the climate neutrality path set by the European Green Deal rather than prioritizing industrial lobby interests.