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New Commission proposal aims to ensure that the member states can have the EU’s support to facilitate implementation of the EU-wide “clean industrial deal” without causing undue distortions of competition in the European single market. The Temporary Crisis and Transition Framework provides for some measures to integrate the EU-wide industrial development, competition as well as socio-economic and trade policies.
Background
The EU member states have to urgently address three challenges at once: a) climate crisis and its consequences, b) competitiveness concerns, and c) economic resilience. As is well known, the decarbonisation policies are a powerful driver of growth when they are well integrated with industrial development, competition as well as socio-economic and trade policies. The states’ industries, particularly those facing high energy prices and fierce global competition, are facing existential challenges. The Clean Industrial Deal brings together climate action and competitiveness under one overarching growth strategy: it is a commitment to accelerate decarbonisation, reindustrialization and innovation, all at the same time and across all EU states while reinforcing Europe’s resilience. It must present European industry with a stronger business case for large climate neutral investments in energy intensive industries and clean tech.
Besides, the Clean Industrial Deal is setting some requirements on the states aid measures to support the deals’ objectives, building on the experience with the Temporary Crisis and Transition Framework (so-called TCTF) transition provisions.
This February, the Commission published the latest state aid brief, showcasing data on the use of the TCTF: it highlights that by June 2024, the Commission approved €47 billion in aid under the TCTF transition provisions, with €2.4 billion effectively granted by the EU states.
On Commission’s state aid briefs in: https://competition-policy.ec.europa.eu/publications/competition-policy-briefs_en
The data also showed that already in the first semester of 2024, the majority of states for which such ‘transition measures’ were approved had started implementing them.
The other state aid communications (e.g. the Climate, Environmental protection and Energy Aid Guidelines) continue to apply in parallel and may be used by the states for different and more complex measures.
More on the “joint roadmap for competitiveness and decarbonisation” in: https://commission.europa.eu/document/download/9db1c5c8-9e82-467b-ab6a-905feeb4b6b0_en?filename=Communication%20-%20Clean%20Industrial%20Deal_en.pdf
Priorities
The focus will be mainly on two closely linked sectors. Firstly energy-intensive industries, which require urgent support to decarbonise, electrify, as well as confronting high energy costs, unfair global competition and complex regulations, harming their competitiveness.
Secondly the clean-tech sector, which is at the heart of future competitiveness and necessary for industrial transformation, circularity and decarbonisation. It is indispensable to act for both to reach our climate neutrality targets, absorb emissions and maintain water resilience and ensure that the states can produce the technologies of the future made in EU, and retain their ability to be solutions providers.
Besides, circularity will be a priority as a key to maximising the EU’s limited resources, reducing dependencies and enhancing resilience. Circular policies help reducing waste, lower production costs and CO2 emissions, as well as creating more sustainable national industrial models that benefit the environment and enhance economic competitiveness. The ambition of the Clean Industrial Deal is to make the EU the world leader on circular economy by 2030, underlines Commission Communication on 26 February 2025 COM (2025) 85 final.
Source: https://commission.europa.eu/document/Communication%20-%20Clean%20Industrial%20Deal_en.pdf
Effect for business
There are six business drivers: 1. affordable energy, 2. lead markets, 3. financing, 4. Circularity and access to materials, 5. global markets and international partnerships, and 6. skills.
These “drivers” should be complemented by actions on horizontal enablers necessary for a competitive economy: cutting red tape, fully exploiting the scale of the Single Market (including through gradual integration of candidate countries), boosting digitalisation, accelerating the deployment of innovation, promoting quality jobs as well as better coordinating EU-wide socio-economic policies.
At this pivotal moment for the European industry, the Clean Industrial Deal aims to open a new chapter of the EU-wide industrial history defined by growth, resilience and leadership on the world stage.
The following are legal measures to accelerate the transition: Council Regulation 2022/2577, Directive 2023/2413, Regulation 2022/869, Regulation 2024/1252 and Regulation 2024/1735.
Perspectives
The Commission invites all interested parties (states, citizens, businesses, etc.) to take part in discussions on draft of the state aid framework accompanying the Clean Industrial Deal, so-called CISAF.
Once adopted, the CISAF will replace the TCTF and is intended to be in force until 31 December 2030, offering a longer planning horizon for the EU member states and investment predictability as well as some certainty for businesses.
It will ease certain standard requirements, like the mandatory bidding process to allocate state aid, which will speed up the use of the schemes once they are set up by the member states.
New draft framework: three types of measures
The draft CISAF sets out the conditions under which state aid for certain investments and objectives would be considered compatible with the internal market. The Commission encourages the EU states to set up aid schemes where appropriate; once authorized by the Commission, state aid schemes allow for a quick deployment of individual aid grants. It therefore contributes to the simplification of state aid rules for projects that contribute to accelerating the Clean Industrial Deal objectives.
The draft CISAF contains provisions for the following types of aid measures:
= Measures accelerating the rollout of renewable energy: the states would be able to set up schemes for investments in renewable energy and energy storage with simplified tender procedures that can be quickly implemented, while including sufficient safeguards to protect the level playing field. The states could devise schemes for specific technologies given their particular national energy mix: they would also be able to grant aid for less mature technologies, such as renewable hydrogen, in a simplified process without a tender. The states however, would need to ensure that the eligible projects are implemented within a specific timeline to ensure an effective acceleration effect. The proposal also contains specific facilitations for state aid for non-fossil flexibility and capacity mechanisms;
= Measures facilitating industrial decarbonisation: the states would be able to support investments in all relevant technologies leading to decarbonisation; thus the states could either set up tender-based schemes, or directly support projects, without tenders, within certain limits. For very large projects, the states would need to show that the public funding does not exceed the project’s funding gap; however, the states would need to ensure that eligible projects are implemented within a specific timeline to ensure an effective acceleration effect;
= Measures ensuring sufficient manufacturing capacity in clean technologies: the proposal would allow support from the states for the production of certain clean technology equipment (currently defined as: batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage) as well as the key components and critical raw materials necessary for the production of such equipment. The EU states would be able to set up aid schemes to support the necessary investments up to certain limits (increased for investments in assisted areas). Subject to strict safeguards, the states could also provide higher aid amounts to match the level of support offered in third countries for a particular project, to avoid such investments being diverted away from Europe.
= Measures to de-risk private investments: the EU states could adopt measures to reduce the risks associated with private investments in renewable energy, industrial decarbonisation, manufacturing capacity in clean technologies, as well as in certain energy infrastructures.
Source and citations from: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_652