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The European Commission (EC) has unveiled the Clean Industry Agreement, a strategic plan designed to bolster the competitiveness and sustainability of Europe's manufacturing sector. This initiative, detailed in an official report, underscores decarbonization as a key driver of industrial growth while aiming to streamline regulations and reduce bureaucratic barriers for businesses.
EC President Ursula von der Leyen emphasized the need for a stronger European industrial framework, acknowledging challenges such as high energy costs and regulatory complexity. She stated, "Europe is not only a hub of industrial innovation but also a powerhouse of industrial production. However, demand for clean products has slowed, and investments are shifting elsewhere. The Clean Industrial Deal is designed to remove obstacles and make a compelling case for businesses to invest in Europe."
The agreement prioritizes two interconnected sectors: energy-intensive industries and clean technologies. It sets out measures to strengthen the entire value chain and provides a framework for sector-specific actions. In this regard, the EC plans to introduce an Automotive Industry Action Plan in March and a Steel and Metals Action Plan later in the spring.
The agreement outlines several fundamental business drivers that will shape the future of European industry:
On February 26, the European Commission adopted the Action Plan for Affordable Energy, aiming to accelerate clean energy deployment, electrification, and integration within the EU energy market. This initiative will enhance energy efficiency while reducing reliance on fossil fuel imports.
The proposed Law on Accelerating Industrial Decarbonization will drive demand for clean EU-manufactured products by incorporating sustainability criteria into public and private procurement processes. It will also introduce voluntary carbon intensity labeling for industrial goods, starting with steel in 2025 and expanding to cement in the future. A public procurement framework revision is set for 2026.
The agreement mobilizes over €100 billion to support cleaner industrial production in the EU. This includes an additional €1 billion in guarantees under the current multi-annual financial framework. Key measures include strengthening the Innovation Fund, establishing an Industrial Decarbonization Bank, and amending the InvestEU regulation. The European Investment Bank Group will also launch new financial instruments to back the transition.
The EU aims to secure access to critical raw materials and reduce dependence on unreliable suppliers while maximizing resource efficiency. To achieve this, the Commission will establish a European Center for Critical Raw Materials to coordinate joint procurement and introduce circular economy legislation by 2026.
In addition to enhancing existing and new trade agreements, the EC will initiate Clean Trade and Investment Partnerships to diversify supply chains. At the same time, the EU will take decisive action against unfair global competition and industrial overcapacity that threatens European businesses.
The Commission is also set to refine the Carbon Border Adjustment Mechanism (CBAM). Current data suggests that over 99% of carbon emissions stem from a small number of importers. A comprehensive review of CBAM will be presented in the first half of 2025, followed by a legislative proposal in 2026.
Recognizing the need for a skilled labor force, the Clean Industry Agreement also includes measures to enhance workforce development. In line with this, the European Commission has initiated a strategic dialogue with the steel industry to map out the sector's future.
This agreement signals a major step in reshaping Europe's industrial landscape, fostering clean technologies, and ensuring long-term economic sustainability.
