Clean industry pact for EU competitiveness and decarbonization

In early March, the European Commission unveiled the Clean Industrial Deal, an ambitious action plan to promote industrial competitiveness and resilience. Its premise is to accelerate decarbonization while securing the future of manufacturing in Europe. The pact provides companies with long-term predictability of the EU’s climate ambitions, which will allow them to invest and minimize investment risks.

Pact for clean industry – main objectives

The Clean Industry Pact is a business plan that will make decarbonization achievable and profitable for industry in Europe. In it, the EU commits to accelerating decarbonization, promoting a closed-loop economy and supporting reindustrialization as sources of growth and prosperity across the continent.

The document mainly focuses on two related sectors:

• energy-intensive, which needs urgent support to face high energy costs, unfair global competition and complex regulations;
• clean technologies, as it will drive industrial transformation, competitiveness and decarbonization. The Clean Industry Pact aims to increase demand for and uptake of clean products and solutions in the EU.

President Ursula von der Leyen, in her policy guidelines for 2024-2029, announced the preparation for implementation of the Clean Industry Pact within the first 100 days of the new commission’s term, and confirmed its inclusion in the EC’s 2025 work program, as we reported in a previous article: EC Work Program for 2025.

Pact for clean industry – key drivers of business growth

The main drivers of business growth are:

• Affordable energy

The EC, in order to lower bills for businesses and households, has adopted the Affordable Energy Action Plan. This Pact aims to accelerate the deployment of clean energy and electrification, in addition to complementing the internal energy market with physical interconnections and increasing efficiency of use and reducing dependence on imported fossil fuels.

• Increase demand for clean products

The Act on Accelerating Industrial Decarbonization will increase demand for clean products made in the EU by introducing sustainability, resilience and manufacturing criteria in public and private procurement. The Commission, along with a review of the public procurement framework in 2026, will introduce sustainability, resilience and European preference criteria.

• Financing a clean transition

In the short term, the Clean Industry Pact is expected to mobilize more than €100 billion to support clean manufacturing in the EU. This amount includes an additional €1 billion in guarantees under the current multi-year financial framework.

• Closed circuit

One of the priorities of the adopted document is closed circulation. Making the best use of the EU’s limited resources, reducing dependence on scarce materials and increasing resilience are key. The Pact envisions reducing waste, production costs and_CO2 emissions, while creating a more sustainable and competitive industrial model, to the benefit of the environment.

• Global markets and international partnerships

The Clean Industry Pact is intended to provide European companies with easier access to third-country markets and essential inputs by concluding trade agreements and establishing clean trade and investment partnerships to diversify sources of supply. To address the diversion of global excess capacity to the EU market, the EC will intensify international and multilateral cooperation.

Pact for clean industry – what do entrepreneurs think?

Opinions on the Clean Industry Pact among entrepreneurs vary. Some of them believe that the measures introduced can have a real impact on lowering energy costs and the development of European industry, while others believe that there are far too few of these measures and they are being introduced too slowly, and that they are waiting for concrete proposals from the EC. It is also heard that – contrary to industry expectations – the EC has prioritized climate protection instead of focusing on concrete measures for industry.

Whether the EC’s new plan will actually work and whether Europe will become a leader in green industry will become clear in the coming years, but already now, according to some experts, the decisions taken could completely change the future of the European economy.