As part of the Green Deal Industrial Plan, three crucial pieces of legislation for a transformative European industry were launched at the beginning of 2023, all of which were adopted in the first half of 2024: the Critical Raw Materials Act, the Net-Zero Industry Act and the Electricity market reform.

Accelerating industrial decarbonisation
By reducing energy costs, promoting renewable energies and creating green lead markets, the aim of the Clean Industrial Deal (CID) is once again to make European industry more competitive and sustainable. In doing so, the EU Commission is focusing primarily on key sectors of energy-intensive industries, the clean tech sector and the promotion of the circular economy. In addition to new measures for the use of low-carbon hydrogen or the creation of a market for captured CO2, the projects also include non-price criteria in public procurement or a law to accelerate decarbonisation (Industrial Decarbonisation Accelerator Act). The key reference points remain climate neutrality by 2050 and the target of reducing CO2 emissions by 90 per cent by 2040 compared to 1990.

InvestEU, the European Investment Bank (EIB) and the Innovation Fund will play a central role in financing industrial transformation. The goal is to mobilise over €100 billion in support in the short term. In addition, the EU Commission recommends that Member States create fiscal incentives by using their corporate tax systems to support cleaner business models. The promotion of the circular economy and the safeguarding of critical raw materials are to be strengthened by an accelerated implementation of the Critical Raw Materials Act. Another focus is on international trade relations, the conclusion of further trade agreements and the expansion of the Carbon Border Adjustment Mechanism (CBAM) to strengthen the global competitiveness of European industry.

In order to make the transformation socially just, the CID communication refers to other well-known Commission initiatives, not least the Union of Skills, which aims at strengthening citizens' skills to cope with change. The Quality Jobs Roadmap is to be developed together with the social partners by the end of 2025. The establishment of the European Fair Transition Observatory, which is to collect information and examples of how best to support workers in the transformation, is expected in early 2026.

Energy for all: a plan for an affordable and stable energy supply
A key element of the CID is an Action Plan for Affordable Energy that is expected to result in savings of €45 billion for citizens, companies and municipalities by 2025, with annual savings gradually increasing to €260 billion by 2040. The plan centres on a combination of short-term measures and structural reforms to significantly reduce energy and electricity costs in the EU. The plan addresses all components of the electricity bill, i.e. grid costs, energy prices, taxes and levies. The long-term goals also include the completion of the energy union and better preparation for energy crises by ensuring fair competition and the use of joint purchasing power in gas markets. Increasing energy efficiency through support measures and access to efficient appliances and products also remains a key objective.

The decoupling of electricity costs and gas prices in times of crisis is also mentioned, which, given the volatility of gas prices, would be essential for the EU's energy security and economic resilience. This should be achieved, among other, by providing new guidelines for Member States to combine Power Purchase Agreements (PPAs) and Contracts-for-Difference (CfDs). In principle, the energy policy measures are to be welcomed. However, it is still unclear whether they will actually result in a substantial reduction in energy prices. This would probably require a greater willingness to intervene in the profit margins of electricity producers.

A roadmap to the future for the crisis-ridden automotive industry?
The Industrial Action Plan for the European automotive aector, which was also presented as part of the Clean Industrial Deal, addresses problems in the supply chains. It also aims to support the European automotive industry, which is facing the challenges of digitalisation and decarbonisation, in the necessary transformation. By taking a holistic approach, it intends to make the sector fit for the future. The plan is based not only on the Draghi Report and the Competitiveness Compass, but also, in particular, on the Strategic Dialogue on the Future of the Automotive Industry launched by Commission President Ursula von der Leyen in January 2025. (Another strategic dialogue followed in the beginning of March, this time on the future of the European steel sector.)

The Industrial Action Plan for the automotive sector published on 5 March is based on five pillars. In the area of innovation and digitalisation, the focus is on autonomous driving technologies and developing the car of the future, supported by an industrial alliance, cross-border regulatory sandboxes and funds from the Horizon Europe research programme. Clean mobility is to be promoted, among other, by targeted decarbonisation of corporate fleets and improvements to the charging infrastructure. The CO2 emission standards, which manufacturers would like to discuss, will not be touched. However, the threat of fines is to be averted by more flexible handling. To strengthen the competitiveness and resilience of supply chains, the focus is on battery production and access to raw materials, with increased battery recycling also intended to reduce dependencies. While trade defence instruments aim to protect against unfair competition, the EU Commission wants to take targeted measures to ensure that investments from partner countries improve long-term competitiveness. Support for workers is also to be improved by expanding the European Globalisation Adjustment Fund (EGF) and increasing the relevant resources from the European Social Fund Plus (ESF+).

Social aspects await finalisation
The social dimension of the Clean Industrial Deal, in particular supporting workers and ensuring a just transition, is currently still insufficiently addressed. Although the involvement of stakeholders, social conditionalities and the necessary promotion of skills are mentioned in various places, overall, the distributional effects of the transformation have not been adequately addressed. With around 500 industrial jobs currently being lost in the EU every day, the European Trade Union Confederation is calling for swift action to be taken in the interests of workers.
 

Further information:
EU Commission: The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation
EU Commission: Action Plan for Affordable Energy
EU Commission: Industrial Action Plan for the European automotive sector
AK EUROPA: Green Deal Industrial Plan. Promoting the green transition and Europe's net-zero industry
AK EUROPA: Net-Zero Industry Act: Realignment of EU industrial policy must be socially and ecologically responsible
A&W-Blog: Österreichs Energiepolitik in der Warteschleife (Austria's energy policy on hold, German only)
AK: Europäische Industriepolitik sozialökologisch gestalten! (A social and ecological European industrial policy!, German only)
Euractiv: EU headed for 'big debate on funding' on clean industrial deal, Commission director says