Views: 24
In the new EU-wide long-term political guidelines adopted at the end of 2024, Commission President pledged to deliver the “Clean Industrial Deal” – presently, through “prioritizing EU competitiveness and prosperity”. This initiative builds on input from industry leaders, social partners and civil society, following the “industrial deal” discussions and the clean transition dialogues. This June, Commission adopted a new State aid framework accompanying the “deal”: the idea is supposed to help the states in developing clean energy strategies, strive for industrial decarbonization and clean technologies.
Background
The Clean Industrial Deal State Aid Framework (CISAF) is generally aimed at simplifying rules for public support to help achieve the goals of the “Clean Industrial Deal”; the latter ensures that the EU-wide “state aid program” remains necessary, suitable and fair in order to protect competition in the EU Single Market. The CISAF is based on the experience with the Temporary Crisis and Transition Framework (TCTF) and replaces its transition provisions.
The “deal” is part of the Union’s competition policy, which is not only the EU’s exclusive competence but is also encouraging companies to offer consumers goods and services on the most favorable terms. Such policy also encourages efficiency and innovation and reduces prices; to be effective, competition requires companies to act independently of each other, and react “subject to the pressure exerted by their competitors”. Besides, the idea is supposed to assist the member states’ governance to “easily support the development of clean energy, industrial decarbonization and clean technology”.
More on EU competition policy in: https://competition-policy.ec.europa.eu/index_en
More on the EU-wide competition issues in our publications at such articles as, e.g.: – https://www.integrin.dk/2024/09/09/eu-wide-competitiveness-challenges-and-perspectives-in-draghi-report/; – https://www.integrin.dk/2024/10/31/new-european-competitiveness-deal-a-declaration-is-on-the-way/; and – https://www.integrin.dk/2025/01/29/boosting-growth-competitiveness-compass-as-the-message-to-the-eu-states-governance/.
EU competitiveness and decarbonization
Faced with high energy costs and fierce global competition, the member states industries need urgent support: hence, the “clean industrial deal” outlines concrete actions to turn decarbonization into a driver of growth for business and industry, including lowering energy prices, creating quality jobs and the right conditions for companies to thrive.
The “deal” presents measures to boost every stage of production, with main focus on:
= energy-intensive industries, such as steel, metals and chemicals, etc. that urgently need support to decarbonize, switch to clean energy and tackle high costs, unfair global competition and complex regulations;
= the clean-tech sector, which is at the heart of future competitiveness and is necessary for industrial transformation, circularity and decarbonization.
= Finally, additional deal’s element is circularity which aims to reduce waste and extend the life of materials by promoting recycling, reuse and sustainable production. Maximizing EU’s limited resources and reducing overdependencies on third-country suppliers for raw materials is crucial for a competitive and resilient market.
Source: https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en
Besides, some related Commission’s web-links: – EU competitiveness, and – Energy strategy.
The TCTF’s history
The process started in March 2022, when the European Commission adopted a Temporary Crisis Framework, TCF to enable the member states to support the economy in the context of Russian-Ukraine military conflict. The TCF complemented the existing State aid toolbox (on the EU state aid rules more below) with many other possibilities already available to states, e.g. providing compensation to companies for damages directly suffered due to exceptional circumstances, and measures outlined in the Commission Communications on energy market developments.
In July 2022, Commission adopted a first TCF amendment to complement the then “Winter Preparedness Package” and in line with the REPowerEU Plan objectives. Thus, the Commission prolonged the duration of the framework until the end of 2022 and included two new sections allowing the states to grant temporary support: – to facilitate the roll-out of renewable energy, storage and renewable heat, and – the decarbonization of the industrial production processes; followed by a publication of the framework’s informal consolidated version.
Then, in October 2022, the Commission prolonged and amended TCF in view of the continued military conflict and the feedback received from the member states and targeted consultations. The amendment also took into account the Regulation on an emergency intervention to address high energy prices (Regulation 2022/1854) and the Commission’s proposal on a new emergency regulation to address high gas prices in the EU and ensure security of supply during winter time; the Commission applied the TCF provisions of October 2022 to all measures notified prior to that date. Then, the Communication replaced the Temporary Crisis Framework adopted in March 2022 as amended in July 2022 and withdrew it from the previous TCF.
In March 2023, the Commission adopted the Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. Thus, the Temporary Crisis and Transition Framework enabled (as from December 2023) the EU states “to cushion the economic impact of Russia’s aggression of Ukraine” and to: a) grant limited amounts of aid to companies affected by the current crisis; (ii) ensure that sufficient liquidity remains available to businesses; b) compensate companies for the additional costs incurred due to exceptionally high gas and electricity prices; and c) incentivize additional reduction of electricity consumption. Hence, until the end of 2025, the states may grant aid to foster the transition to a net-zero economy.
Accordingly, the state aid may be granted to: a) accelerate the roll-out of renewable energy, storage and renewable heat relevant for REPowerEU, and b) decarbonize industrial production processes. In addition, the states may also grant aid to accelerate investments in key sectors for the transition towards a net-zero economy, enabling investment support for the manufacturing of strategic equipment, such as batteries, solar panels, wind turbines, heat-pumps, electrolysers (with carbon capture usage and storage) as well as for production of key components, and for production and recycling of related critical raw materials.
Bottom-line: the Commission applies the TCTF provisions (as adopted in March 2023) to all measures notified prior to that date; i.e. in March 2023 the Communication replaced the TCF adopted in October 2022. Then, in November 2023, the Commission amended the TCTF (see Official Journal C, C/2023/1188) in light of the new economic situation and the feedback received from the states to a consultation of November 2023. The Commission adopted a limited prolongation of the provisions enabling the states to continue to grant limited amounts of aid, together with a proportionate increase in the aid ceilings, to cover the winter heating period and aid to compensate for high energy prices until 30 June 2024; other sections of the framework remained unchanged, or in force until the end of 2025.
In May 2024, the Commission again amended the TCTF in light of the specific situation of undertakings active in the primary production of agricultural products, as well as in the fisheries and aquaculture sectors (following the feedback received consultations with the states in April 2024). The Commission adopted a limited prolongation of the provisions enabling the states to continue to grant limited amounts of state aid until the end of 2024 for undertakings in these sectors.
Source and citations from: https://competition-policy.ec.europa.eu/state-aid/temporary-crisis-and-transition-framework_en
Finally, the CISAF applies as of 25 June 2025, and remains in force until 31 December 2030.
CISAF contains provisions for the following types of the state aid measures towards: – accelerating the rollout of clean energy; – providing support for electricity costs for energy-intensive users; – facilitating industrial decarbonization; – ensuring sufficient manufacturing capacity in clean technologies; – to de-risk private investments.
Source: https://competition-policy.ec.europa.eu/about/contribution-clean-just-and-competitive-transition/clean-industrial-deal-state-aid-framework-cisaf_en
Thus, the new CISAF rules can support the “clean industries” in the member states in the following way:
a) fast-tracking clean energy, which make easier and quicker approval for the states to invest in clean energy projects through simplified procedures and speedy implementation;
b) providing support for electricity costs for energy-intensive users (as well as temporary electricity price support for energy-intensive industries, to make them more competitive on global markets);
c) flexible support for industry decarbonization, including support for various eco-friendly technologies, such as electrification, hydrogen and carbon capture, utilization and storage, which will increase energy efficiency and competitiveness; and
d) boosting the EU’s clean tech manufacturing capacity, in order to ease the possibilities for support of manufacturing projects in clean technologies recognized in the EU Net-Zero Industry Act, and including for critical raw materials.
The CISAF rules also provide possibilities for the state aid to: a) avoid de-localization of industry by reducing investments risks to leverage private investments; and b) reduce the risks linked to private investments in clean energy, decarbonization, clean tech manufacturing, energy infrastructure and the circular economy.
Main elements of the Clean Industrial Deal
There are the following aspects in the “industrial deal” between the EU and the member states:
= Affordable energy as the foundation of EU-wide competitiveness; it is aimed to lower energy bills for industries, businesses and households, while promoting the transition to a low-carbon economy.
The Commission adopted the affordable energy action plan to: – speed up the roll-out of clean energy, accelerating electrification, – completing the internal energy market with physical interconnections, – using energy more efficiently and cut dependence on imported fossil fuels.
Basically, the “deal” is aimed at boosting demand for clean products: the industrial decarbonization accelerator act will increase demand for EU-made clean products, by introducing sustainability, resilience and “made in Europe” criteria in public and private procurement.
The Commission will also review the public procurement framework in 2026 to introduce sustainability, resilience and European preference criteria in public procurement for strategic sectors.
Financing the clean transition
The “deal” will mobilize over €100 billion to support EU-made clean manufacturing; with this in mind, the Commission will: – include in the deal the state aid framework to accelerate the approval of national active renewable energy programs, decarbonizing industry and ensure sufficient manufacturing capacity of clean tech; – strengthen the Innovation Fund and propose an industrial decarbonization bank, aiming for €100 billion in funding, based on available funds in the Innovation Fund; – additional revenues resulting from parts of the ETS as well as the revision of InvestEU program; – launch a dedicated call under Horizon Europe to stimulate research and innovation in these areas; – amend the InvestEU regulation to increase the amount of financial guarantees that InvestEU can provide to support investments; this will in turn mobilize up to €50 billion for the deployment of clean tech, clean mobility and waste reduction.
Additionally, the deal includes: – circularity and access to materials, as critical raw materials are key for the industrial progress: the member states have to secure access to such materials and reduce dependence on unreliable suppliers. Thus, integrating circularity in the industrial decarbonization strategy becomes crucial to making the most of the EU’s limited resources.
Hence, the Commission will: – set up a mechanism enabling European companies to come together and aggregate their demand for critical raw materials; – create an EU critical raw material center to jointly purchase raw materials on behalf of interested companies which will create economies of scale and offer more leverage to negotiate better prices and conditions; – adopt a circular economy act in 2026 to accelerate the circular transition and ensure that scarce materials are used and reused efficiently, reduce the EU’s global dependencies and create high-quality jobs; the ultimate aim is to have 24% of circular materials in the stock by 2030.
In acting on a global scale, the EU needs reliable global partners more than ever. In addition to ongoing and new trade agreements, the Commission will: – launch the first Clean Trade and Investment Partnerships to diversify supply chains and forge mutually beneficial deals to ensure the EU industry is economically secure and resilient, i.e. in the face of global competition and geopolitical uncertainties, through a range of trade defence and other instruments
simplify and strengthen the carbon border adjustment mechanism, the EU’s tool to put a fair price on the carbon emitted during the production of carbon intensive goods.
As to skills and quality jobs, the EU institutions will “supply the necessary skills” to support the transition to a low-carbon economy, including skills in clean technologies, digitalization and entrepreneurship. Besides, the Commission will establish a “union of skills” that invests in workers, develops skills and creates quality jobs. Erasmus+ will reinforce education and training programs to develop a skilled and adaptable workforce and address skills shortages in key sectors, with up to €90 million in funding.
The Clean Industrial Deal will also focus on horizontal enablers necessary for a competitive economy: – in cutting red tape, – fully exploiting the scale of the single market, – in promoting quality jobs, and -in better coordinating policies at the EU and national levels.
Source and reference to: https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en
The European “state aid rule”
EU State aid rule is vital to prevent (as well as facilitate) the government’s support leading to a company gaining a distortive advantage over its competitors.
Other State aid rules relevant to the Clean Industrial Deal (i.e. in the Climate, Environmental protection and Energy Aid Guidelines – the CEEAG) continue to apply in parallel and may be used by the states for different and more complex support measures. The EU states will also continue implementing State aid measures in this field under the General Block Exemption Regulation, without the need to notify them to the Commission.
The Commission has consulted the states and stakeholders on the draft State aid framework, that was preceded by the states survey on the use of the TCTF. The Commission took into account all contributions it received for the final version of the framework.
Thus, the TCTF simplifies State aid rules in five main areas: – the roll-out of renewable energy and low-carbon fuels;- temporary electricity price relief for energy-intensive users to ensure the transition to low-cost clean electricity; – decarbonization of existing production facilities; – the development of clean tech manufacturing capacity in the EU, and; – the de-risking of investments in clean energy, decarbonization, clean tech, energy infrastructure projects and projects supporting the circular economy.
There are also measures to de-risk private investments in projects supporting the Clean Industrial Deal: thus, public and private investments “must work in tandem to drive the transition to a decarbonized economy” and the states can take measures to de-risk private investments in projects covered by the framework, including energy infrastructure and circular economy. Support may take the form of equity, loans and/or guarantees provided to a dedicated fund or special purpose vehicle that will hold the portfolio of eligible projects.
More in: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1598