EIES welcomes stronger demand signalling to European manufacturing. It urges the EC and member states to accelerate the implementation of new and already-adopted policies, and to complement this effort with a reinforcement of the EU’s trade defence arsenal.  

Executive Summary

The European Commission’s (EC) Clean Industrial Deal (CID) and accompanying Action Plan for Affordable Energy constitute tangible steps towards furthering energy security and strengthening Europe’s industrial base. These strategy documents outline a series of policies, regulations and funding instruments to be proposed by the EC in 2025-2026 to boost European manufacturing, accelerate the deployment of clean technology, decarbonise energy-intensive industries, invest in recycling, and lower energy prices. EIES welcomes stronger demand signalling to European manufacturing. It urges the EC and member states to accelerate the implementation of new and already-adopted policies, and to complement this effort with a reinforcement of the EU’s trade defence arsenal.  

Most proposals listed in the Clean Industrial Deal are designed to support European manufacturing. While the proposed regulatory initiatives include a clear assessment of the issues they are trying to address and an overview of instruments to be used (e.g. introduction of “Made in Europe” requirements), their final form and efficacy will be determined by upcoming negotiations between the EC, member states and the European Parliament, with input from industry. 

The EC plans to set up a “Critical Raw Material Centre” to facilitate joint purchasing of raw materials and potentially coordinate strategic stockpiles, monitor supply chains and design financial products to invest in upstream supply in the EU and third countries. New measures to incentivise recycling and restrict exports of CRMs will be proposed by end of 2026. 

The EC aims to mobilise EUR100 billion in public and private funding with the expansion of public guarantees capacity under the InvestEU programme and the European Investment Bank (EIB) up to 2027. Another EUR100 billion in public funding (timeline unclear) is to be drawn primarily from repurposing existing EU funds and potential new revenues from the Emissions Trading System (ETS). As available EU funding is limited, the EC plans to relax national state aid rules for clean energy funding as early as June 2025. 

The Action Plan for Affordable Energy calls for the implementation of already-agreed EU legislation to achieve deeper interconnection and market integration. The EC encourages member states to revise network charges, lower taxation of electricity, and increase retail competition. A Grid Package - expected by Q1 2026 – aims to streamline grid planning and permitting. A similar effort is expected for Small Modular Reactors (SMRs). A proposal to revise the energy security regulatory framework is slated for early 2026 to tackle crisis preparedness and price volatility. 

“Made in Europe” Measures 

Speed up permitting for industry and introduce sustainability, resilience and minimum EU content requirement in public and private procurement in strategic sectors

Accelerating Permitting: The Industrial Decarbonisation Accelerator Act – to be tabled in Q4 2025 - will propose measures to address permitting bottlenecks for industrial and manufacturing projects. No clear new proposals to fast-track permitting have yet been identified. 

Non-price criteria: The Act will introduce “non-price criteria” (e.g. cybersecurity), a welcome development that should help drive demand for Europe-made, low carbon products. These criteria could be applied to the EU budget, national programmes, and public and private procurement “benefitting energy-intensive industries”. The Act will likely be adopted at the end of 2026 at the earliest and have an immediate effect across the EU, without requiring implementation in national legislation.  

Public Procurement: In the same spirit, in 2026 the EC will propose a revision of the Public Procurement Framework to introduce non-price criteria in EU public procurement. This is likely to come into force across the EU in 2027-28, but some countries may introduce such criteria at the national level before that.  

Other soft measures such as standards and product legislation to boost demand for European clean products

Private Procurement: To better drive demand through private procurement, the EC plans to assess how to include such criteria in industrial product legislation (e.g. steel, renewables, and batteries, and to introduce product labelling and incentives (e.g. national-level tax incentives). This would support the payment of a “green premium” for companies that invest in the decarbonisation of their processes. The Industrial Decarbonisation Accelerator Act will first propose a voluntary label, starting with steel in 2025, building on existing industry reporting. A label for cement is expected to follow.  

Buy-side measures: Other ideas such as consumer-side measures are likely to be explored by the EC and member states. For instance, in September 2023 France introduced rules for EV subsidies - so called “eco-bonus” – excludes cars with a production carbon footprint above 14.75 tonnes of CO2 from access to subsidies. Such measures can be designed in a way that favours made-in-Europe vehicles. 

Implementing the Critical Raw Materials Act (CRMA) and promoting circularity 

CRMs: The EC will publish the first list of Strategic Projects in March 2025 and create a platform for demand aggregation and a matchmaking mechanism for strategic raw materials. An “EU CRM Centre” would be set up by the EU to jointly purchase materials on behalf of interested companies and in cooperation with member states. The Centre could coordinate strategic stockpiles, monitor supply chains and design financial products to invest in upstream supply in and outside the EU. This Centre will be modelled after Japan’s JOGMEC, a recommendation from the Draghi report, and it is key to focus efforts on addressing opacity and predatory pricing in CRM markets – driven by China’s minerals supply chain dominance - that risks undermining Europe’s efforts to mine and process minerals domestically and in partner countries. 

Clean Trade and Investment Partnerships (CTIPs) are to allow for a faster, more flexible, and more targeted approach than Free Trade Agreements, align the EU’s industrial and foreign policy, manage dependencies, and foster energy/decarbonisation cooperation with partner countries. The first CTIP is to be launched in March 2025 (partner not yet disclosed).   

Bolstering Circularity: In Q4 2026 the EC will propose a Circular Economy Act to boost the demand for alternative raw material sources, including recycled materials. Building a business case will prove challenging across sectors given the often lower costs of virgin materials, and government incentives will be essential to keep critical and strategic materials in Europe. The EC will also assess new measures to make recycling of CRM waste in the EU more attractive than their export. “Export fees could also be assessed and considered, which could then be used to finance investment in recycling capacity”. In response to critical shortages in the European battery recycling industry, measures to restrict exports of black mass are expected. 

Leveraging Public Funding (With Limited Fiscal Space) 

New Clean Industrial Deal State Aid Framework to boost country-level funding

The new state aid framework is designed to give EU member states more freedom to use public funds to support the production of clean energy and technology across the supply chain. Eligible areas will include renewable energy, electricity and thermal storage, non-fossil flexibility support schemes, industrial decarbonisation and manufacturing capacities for clean tech including batteries, wind turbines, heat-pumps and the production or recovery of related raw materials necessary for clean technology. This is a welcome development, and technological neutrality and a risk-based approach to identifying sectors considered “strategic” for Europe should underpin the allocation of capital. 

This framework is to be introduced by June 2025 and be in force until 2030. It can be combined with other types of authorised national state aid and EU funding. The framework will give EU member states more flexibility and quicker approvals to allocate public funds and supports the usage of incentives such as tax credits to boost clean manufacturing and industrial decarbonisation. EU countries with greater fiscal capacity and those who have traditionally used industrial policy such as Denmark, France, Germany and Romania are likely to take full advantage of these new rules. Intensified support for technologies such as wind power and batteries is likely in countries such as Poland, Spain, France, Germany and Greece.  

Use public guarantees to leverage private capital and mobilise a total of EUR100 billion in public and private funds for EU clean manufacturing

This short-term mobilisation of private capital could be facilitated through increasing the risk-bearing capacity of the InvestEU programme, which currently includes a guarantee of EUR26.2 billion. With this, the EC expects to mobilise around EUR 50 billion in additional private financing until 2027. Additionally, the European Investment Bank (EIB) plans to launch new initiatives to support clean tech and energy-intensive companies. It would deploy a TechEU investment programme to support disruptive innovation and scale-up companies, which invest in innovative technologies such as AI, clean tech, CRMs, energy storage, and semiconductors.  

New EU “Industrial Decarbonisation Bank” funding programme to be launched in Q2 2026 to allocate EUR 100 billion in funding for decarbonisation - with additional available funding in 2025 only amounting to EUR 1 billion

An important step towards the electrification of industry, the bank is to be funded from the repurposing of existing funds and potential new revenues coming from the Emissions Trading System (ETS). In 2025, the EC will launch a EUR 1-billion pilot for companies to fund their electrification and decarbonisation processes through competitive tenders. 

The EC also plans to commit EUR 6 billion from the Innovation Fund in 2025 to the Hydrogen Bank, clean tech, battery manufacturing, and industrial decarbonisation. It is unclear, however, whether this is new or repurposed existing funding.  

Additionally, in Q4 2025 the EC plans to launch a new Horizon Europe call of around EUR600 million to support fit-for-deployment projects in clean tech, clean energy and decarbonised manufacturing under its 2026-2027 work programme. 

The Decarbonisation Bank is to be placed within the governance of the future “Competitiveness Fund”, which the EC proposed in 2024. The fund, to be part of the 2028-34 EU budget, is to combine and replace existing EU financial instruments to increase and simplify access to funding.  The Fund must be agreed by member state negotiations and would become operational in 2028 after the current EU budget expires in 2027. The size of the Competitiveness Fund will depend on whether member states agree to raise additional funds through new EU debt issuance or expand own EU revenues, e.g. from the ETS and the Carbon Adjustment Border Mechanism (CBAM). EU-level pooling of funds ought to be prioritised over a member state-first approach, to drive cohesion and the best outcome for Europe’s overall competitiveness. 

Lowering Energy Prices 

EUR 500 million European Investment Bank (EIB) pilot programme for corporate PPAs to lower energy prices for energy-intensive industries

Part of the Action Plan for Affordable Energy seeks to promote and derisk Power Purchase Agreements (PPAs), this pilot aims to counter-guarantee part of the PPAs undertaken by SMEs and midcaps as well as energy-intensive industries for the long-term purchase of electricity generation. A technologically neutral approach suggests that gas and nuclear energy generation are likely to be included.  

Other measures to support the deployment of energy infrastructure and reduce prices

As part of the Plan and to lower electricity bills for consumers, the EC encourages the completion of the Energy Union through deeper infrastructure interconnection and market integration. Much of that relies on the national-level implementation of already agreed EU legislation (third energy package, REPower EU, etc.) which, though crucial to collective energy security, is unlikely to provide short-term relief.  

In this context, member states are encouraged to revise the design of network charges to reward flexibility, lower the taxation of electricity, and lower supply costs by increasing retail competition.  

To accelerate the expansion, modernisation and digitalisation of grids, the EC will propose a European Grid Package by Q1 2026 to streamline permitting, planning and fast-track cross-border projects, especially interconnectors. The EC also plans to assess options to streamline permitting and licensing for new nuclear energy tech such as SMRs, a welcome development. The EIB will also introduce a ‘Grids manufacturing package’ to provide counter-guarantees to manufacturers of grid components, with an indicative amount of at least EUR1.5 billion. 

In early 2026, the Commission will put forward a legislative proposal for a revision of the current EU energy security regulatory framework to improve crisis preparedness and reduce price volatility. It is essential that the revised framework captures the many dimensions of modern-day energy security as we know it today and strengthens cooperation across European governments and industries.