The EU's Clean Industrial Deal, set for formal release on 26 February 2025, aims to reconcile decarbonization with industrial competitiveness through a mix of market incentives, regulatory reforms, and strategic trade measures. Based on draft texts and analyses, here's what to expect – and where surprises may emerge.

Key Expected Measures

1. Energy Cost Reductions

Power Purchase Backstops: The European Investment Bank (EIB) will counter-guarantee renewable energy purchase agreements for small and energy-intensive firms to lower financing costs.
Tax Cuts: EU states will be urged to slash electricity taxes to legal minimums for industries investing in decarbonization.

2. "Made in Europe" Push

Procurement Rules: Public and private procurement will prioritize EU-made products with "minimum local content" requirements and sustainability labels. Carbon product labeling will distinguish low-emission goods.
Trade Defense: Measures to counter Chinese cleantech exports and U.S. subsidies, including potential CBAM expansions to downstream products like chemicals.

3. Regulatory Streamlining

Simplified Permits: Faster approvals for clean-tech projects and reduced bureaucracy under the Net-Zero Industry Act (NZIA).
Circular Economy Act: Eased cross-border movement of critical raw materials, paired with restrictions on waste exports.

4. Hydrogen and CBAM Reforms

Low-Carbon Hydrogen: Clarified production rules and a Q3 2025 call for Hydrogen Bank projects.
CBAM Adjustments: Simplified reporting for importers ahead of 2026 implementation, with a review in late 2025 to extend the mechanism.

5. Sector-Specific Support

A targeted package for the chemicals sector – termed the "industry of industries" – is expected by late 2025.

Potential Surprises

"Buy European" Quotas: The draft hints at binding local-content thresholds for public procurement, which could spark trade disputes if overly protectionist.
Energy Price Caps: While not finalized, the Commission is exploring short-term price interventions to prevent deindustrialization.
CBAM Scope: Chemical industry resistance may delay or dilute plans to expand carbon border fees to downstream products.

Political Implications

Internal Divisions: The European Conservatives and Reformists (ECR) oppose "green overreach," criticizing decarbonization timelines as economically risky. In contrast, the EPP and S&D see the deal as vital for balancing climate goals with competitiveness.
Global Tensions: The EU risks accusations of hypocrisy by blending climate leadership with protectionist trade rules, particularly under Trump's "America First" policies. Success hinges on framing the deal as a catalyst for global green markets.
Industry Pressure: Energy-intensive sectors demand immediate energy relief but face a 2030 reinvestment cliff-edge – the deal must signal long-term viability without locking in fossil dependencies.

References

Clean Industrial Deal: the proposal the Commission is considering
https://fasi.eu/en/articles/strategies/28115-clean-industrial-deal-the-proposal-the-commission-is-considering.html
A clean industrial deal for Europe - Florence School of Regulation
https://fsr.eui.eu/event/a-clean-industrial-deal-for-europe/
European Commission Document
https://commission.europa.eu/document/download/f80922dd-932d-4c4a-a18c-d800837fbb23_en
CAN Europe position on Clean Industrial Deal
https://caneurope.org/can-europe-position-on-clean-industrial-deal/
The EU Clean Industrial Deal | Greens/EFA
https://www.greens-efa.eu/en/article/policypaper/the-eu-clean-industrial-deal
Clean tech in the energy sector | Think Tank - European Parliament
https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2025)767198
Clean Industrial Deal - Euractiv
https://www.euractiv.com/wp-content/uploads/sites/2/2025/02/Clean-Industrial-Deal-Copy.pdf
Tax breaks and state aid: What's in the EU's draft Clean Industrial Deal
https://www.reuters.com/sustainability/climate-energy/tax-breaks-state-aid-whats-eus-draft-clean-industrial-deal-2025-02-18/

Categories: Energy | Renewable | Hydrogen | EU