The Clean Industrial Deal (CID) builds on existing EU industrial and climate policies, responding to competitiveness concerns underscored by the Draghi report, and the need for deep decarbonisation. It integrates aspects of the EU Green Deal and is closely linked with the upcoming 2040 climate target. The policy’s goal is to provide regulatory certainty and financial incentives for industries transitioning to net-zero.
A Clean Industrial Deal built around six core axes:
- Improving access to affordable energy
The CID will pick up on previous EU reforms of the electricity market to provide more stability and predictability in electricity prices for companies and consumers. Concretely, the CID aims to support companies in securing long-term contracts for electricity at pre-agreed prices, like Power Purchase Agreements (PPAs). To do so, the European Investment Bank (EIB) will provide counter-guarantees on those contracts – essentially a backup promise to cover the guarantor’s obligations if the offtaker (buyer) defaults under a PPA – primarily for SMEs and companies in energy-intensive sectors which are the most sensitive to instability in electricity prices. Additionally, clearer guidance will be provided in 2025 on integrating state aid rules with those EU-guaranteed long-term contracts. Further measures include increased EIB involvement in grid infrastructure through the European Grids Package, implementation acceleration of the Renewable Energy Directive III (REDIII), and measures for gas price stabilisation.
- Driving supply and demand in lead markets
The CID highlights the importance of supporting “lead” markets – strategic new markets that can shift supply and demand towards more sustainable, low-carbon, and circular products. To do so, it puts forward several key actions. First, outlining a business case for carbon removals via the potential integration of permanent CDR in the ETS after its revision in 2026. Second, a review (also in 2026) of the Public Procurement Framework to support sustainable industries. Third, the introduction of the Industrial Decarbonisation Accelerator Act (IDAA) to support sustainable supply in energy-intensive industries. It will also propose voluntary carbon intensity labels for industrial products, beginning in 2025 with steel and cement, to stimulate demand for low-carbon products. Fourth, product- and sector-specific legislation will be modified to incorporate non-price criteria, such as life-cycle CO2 emissions performance benchmarks, to incentivise procurement of low-carbon materials. Further actions include new and increased support mechanisms for the green hydrogen sector.
- Mobilising public investment to catalyse private funding
The CID will strengthen public financing at the EU level through instruments like the Competitiveness Fund within the next EU budget. Central to this initiative is the creation of an Industrial Decarbonization Bank endowed with EUR 100 billion sourced from the Innovation Fund, ETS revenues, and InvestEU. In parallel, the Innovation Fund will host a first pilot auction for industrial decarbonisation in 2025, with EUR 1 billion available. Under the CID’s umbrella, a Horizon Europe pilot call in 2026-2027 will dedicate EUR 600 million towards innovative decarbonisation solutions. The InvestEU regulation will also be amended to increase the volume of financial guarantees it can offer, notably through the EIB, with a new Clean Tech Guarantee Facility for long-term investment loans. A streamlined Clean Industrial State Aid Framework will be established, simplifying grant application processes, and Important Projects of Common European Interest (IPCEIs) standards will be revised to prioritise industrial decarbonisation and cleantech scaling.
- Fast-tracking circular economy development
The CID will accelerate the implementation of the Critical Raw Materials Act (CRMA) and propose the Circular Economy Act in 2026 to establish a unified waste market. This initiative aims to enhance industrial resilience through resource efficiency, promoting sustainable production and consumption practices across industries.
- Enhancing international cooperation and global markets for cleantech
The CID aims to strengthen global partnerships through Clean Trade and Investment Partnerships and proposes expanding the scope of the Carbon Border Adjustment Mechanism (CBAM) to additional sectors, simplifying compliance and enhancing its effectiveness in protecting EU industries from carbon leakage.
- Promoting skills transfer and quality job creation
Addressing workforce readiness, the CID will establish the Union of Skills with a EUR 90 million budget. It will also launch a Skill Portability Initiative, facilitating cross-border recognition of qualifications, supporting workers impacted by the industrial transition to achieve a more inclusive economic growth.
What does the CID mean for CDR?
Currently, the only relevant announcement for CDR is the 2026 ETS Directive revision as part of the ICMS. However, there are several avenues for the CID to support the CRD industry. SMEs involved in permanent CDR could benefit from simplified access to long-term contracts for electricity through EIB counter-guarantees. Procurement reforms and carbon intensity labelling could support carbon storage in products, particularly in construction. The Competitiveness Fund and Industrial Decarbonisation Bank may provide additional financial resources for CDR. The Clean Tech Guarantee Facility may assist CDR ventures seeking long-term financing. Furthermore, IPCEIs could cover CO2 transport and storage infrastructure, given their cross-border nature, while the Circular Economy Act could support waste-based CDR methodologies. The CID measures for a just transition could put the CDR sector in the light due to overlapping skillsets with traditional industrial sectors.
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