Clean Industrial Deal: What are the EU's priorities for the coming years?

On 26 February, the European Commission presented its strategy for the decarbonisation of European industry with the "Clean Industrial Deal". The measures described therein are intended to continue the transformation path embarked upon with the European Green Deal. These measures aim to promote competitiveness and innovation and improve security of supply.

Planned focal points

The EU Commission's legally non-binding communication sets out the following priorities and measures:

• Affordable energy
  Under the heading of affordable energy, measures are described to reduce Europe's relatively higher electricity prices to improve competitiveness.In this context
• Guarantees for Power Purchase Agreements (PPAs, more information here) issued by the European Investment Bank,
• a support package for manufacturers of grid expansion components,
• simplified State aid rules for renewable energy and decarbonisation of industry, including the use of PPAs,
• lower tax rates on energy for energy-intensive industries,
• further integration of the internal energy market through the expansion of interconnectors,
• speeding up authorisation procedures and
• better coordination of gas procurement in the member states

shall be implemented. In addition, the Energy Tax Directive and the additional measures of the Action Plan for Affordable Energy are to be implemented.

Green lead markets

On the demand side, resilience and sustainability criteria are to be introduced for green procurement. Product-related regulations shall also follow, for example for hydrogen produced with low carbon dioxide emissions.

Private and public investments

The EU Commission estimates the investment requirement at EUR 480 billion per year. The sums are to be raised by setting up a new "Competitiveness Fund", funds from a "bank for the decarbonisation" aiming for EUR 100 billion in funding and an amendment to the InvestEU Regulation.

Circular economy

In addition to the implementation and bundling of demand as part of the "Critical Raw Materials Act", a legal act is announced under the heading of the circular economy, which is intended to accelerate the establishment of a circular economy and thus promote the more efficient use of materials. The Ecodesign Regulation is cited as an example.

Global markets and international partnerships

At international level, the deal provides for the introduction of Clean Trade and Investment Partnerships and the conclusion of free trade agreements. The Carbon Border Adjustment Mechanism (CBAM) is also to be simplified without losing any of its effectiveness.

Social justice and just transition

In order to take the social dimension of transformation into account, a better data basis for monitoring the social impact of change is to be created. It shall also be possible to better transfer and recognise qualifications.

To implement the strategy, the EU Commission is planning various sector-specific action plans (e.g. for the automotive, steel and chemical industries).

Assessment

With the Clean Industrial Deal, the EU Commission is focussing on the continuity of industrial transformation in Europe. It remains to be seen whether, which and how the planned measures will actually be implemented. This will determine whether the targets set can be achieved.

The less clear statements on the financing of the proposed measures have been criticised in some cases. Here, too, it remains to be seen what funds will be available.

Finally, the interaction with national measures, such as those being discussed in the current coalition negotiations in Germany (e.g. the reduction of the electricity tax or the power plant strategy), is unclear.