The EU’s Clean Industrial Deal (CID) could transform Europe into a global leader in clean technology and decarbonisation.
It promises to support heavy industry, boost circular economies, and reduce reliance on imported raw materials. But ambition alone isn’t enough. Without swift action and accountability, Europe risks falling behind global competitors and missing its 2040 climate targets.
The global race toward clean industrial production is already underway, Europe must act decisively to secure its position as a frontrunner – or risk being left behind.
Clean energy: Can Europe power its industrial transition?
High energy costs are a major hurdle for European manufacturers. The CID addresses this with short-term relief and long-term upgrades. The Action Plan on Affordable Energy will cut electricity costs and encourage renewable energy contracts, backed by €500 million in guarantees from the European Investment Bank.
The European Grids Package, due next year, aims to modernise Europe’s grid and expand cross-border connections, key for industrial electrification. Subnational governments – states, territories and regions - must be included in the conversation immediately, to ensure local needs and priorities are met, making the implementation smoother and ensuring the modernisation efforts has sufficient buy in from all key stakeholders.
However, Europe’s faltering commitment to the EV transition is deeply concerning. The lack of urgency in building out charging infrastructure, modernising the grid, and scaling renewable energy capacity undermines the credibility of the EU’s climate ambitions. Instead of doubling down on the future, there are worrying signs of backsliding, propping up outdated fossil fuel systems rather than accelerating the shift to clean energy.
Heavy industry needs more than promises to drive decarbonisation
Europe’s industrial sector is under pressure from rising energy costs, fragile supply chains, and global competition. The CID aims to ease this by accelerating the shift to low-carbon production. Key industries like steel, cement, and concrete are central to this transition—but they need more than promises.
The Industrial Decarbonisation Accelerator Act, due in late 2025, will fast-track permits for low-carbon projects. A long-standing revision to the Public Procurement Directives is also due to arrive in late 2026, mandating the introduction of sustainability criteria in public tenders, prioritising low-emission, circular, and energy-efficient materials, however the lack of clarity around these criteria (emissions, water use, social impact) may deter businesses from investing heavily. Governments must lead by example and every EU-funded project should prioritise sustainable materials today
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Circular economy: Closing the loop on Europe’s resource dependency
The CID aims to reduce Europe’s reliance on imported raw materials by promoting recycling and reuse. The Circular Economy Act due to launch at the end of 2026, will create a harmonised market for secondary materials, pushing industries away from virgin resources. In the first half of 2025 the Commission will publish the Ecodesign Work Plan, which seeks to set stricter standards for product durability and recyclability, encouraging sustainable practices.
However, industries with complex supply chains may struggle to adapt. The CID’s voluntary low-carbon product label is a step forward, but without stronger incentives, businesses may opt for cheaper, higher-emission options.
Balancing accountability in Europe’s clean transition
The European Commission’s Omnibus Package, introduced alongside the CID, proposes changes that could weaken accountability in Europe’s decarbonisation efforts. It exempts 80% of companies from Corporate Sustainability Reporting Directive (CSRD) requirements and delays the Corporate Sustainability Due Diligence Directive (CSDDD) until 2027. Additionally, 90% of companies are now exempt from Carbon Border Adjustment Mechanism (CBAM) reporting, which may reduce transparency and make it harder to track emissions reductions.
While these changes aim to ease regulatory burdens for businesses, they risk slowing progress on emissions reductions and supply chain transparency. To ensure Europe meets its climate goals, public funding for decarbonisation should be tied to measurable results, with companies required to provide clear data on emissions and progress. Striking the right balance between supporting industry and maintaining strong accountability will be key.
Big potential, but time is running out for Europe’s clean industrial future
The CID sets Europe on the right path, but time is running out. Strong commitments are a start, but without fast implementation and strict accountability, the CID risks becoming another missed opportunity.
Industry leaders are moving ahead with decarbonisation, policymakers must catch up. Europe must embrace its competitive spirit, prioritise infrastructure for EVs, renewable capacity, and storage, and resist the temptation to prolong the life of the fossil fuel economy. The stakes are high, and the window for action is closing. If Europe fails to act now, it will not only lose its competitive edge but also forfeit its leadership in the global fight against climate change.