This is how the EU wants to save its industry
03 March 2025
Last week, the European Commission revealed the long-awaited Clean Industrial Deal, its direct response to an existential threat: the erosion of European industry. High energy costs, overregulation, and global competition have pushed manufacturing out of Europe while the US and China raced ahead – the EU's share of global industrial value decreased from 21% in 2000 to just 14,5% in 2021.
The EU's plan to keep us relevant in global manufacturing mobilises over €100 billion from different funds. With that big sum, the EU wants to decarbonise heavy industry, cut energy costs, and secure key supply chains to try and ensure that Europe remains a leader in the green economy rather than a casualty of it. To counter the manufacturing sector's struggle against foreign subsidies from the US or China, the CID will ease state aid rules, allowing direct financial support for industries like steel, cement, batteries, and hydrogen.
It also establishes an 'industrial decarbonisation bank' to fund low-carbon production and revises trade rules to protect "made in Europe" clean technologies from falling behind against unfair competition. Energy costs are the Achilles' heel of our industry, and the deal aims to fix that: the EU is fast-tracking permits for renewable projects, cutting electricity taxes for manufacturers, and establishing long-term power contracts to provide companies with stable, lower-cost renewable energy.
Beyond energy, the deal also addresses Europe's reliance on foreign supply chains – particularly for critical raw materials. It'll establish an EU Critical Raw Materials Centre to coordinate the sourcing of essential minerals like lithium, lowering dependence on China and strengthening Europe's own recycling and extraction capabilities. Access to these materials is crucial for electric vehicles and renewable energy industries.
 | Leticia Batista How will this deal impact the average European? If done well, it has the chance of being something really big. It brings more job opportunities in green industries, lower electricity bills over time as renewable energy expands, and greater energy security, reducing reliance on imported fossil fuels that drive price spikes. If successful, it could lead to a stronger economy with more investment in local manufacturing, making products like electric cars and batteries more affordable. However, in the short term, consumers may face higher energy costs as industries shift away from fossil fuels. Certain regions heavily dependent on coal or traditional manufacturing could see job losses before new industries fully take root. Governments have already promised retraining programs and subsidies to ease the transition, but the reality will depend on how smoothly the plan is implemented and whether the promised investments actually reach affected workers and businesses. Regardless, the deal has not yet been implemented, as it still requires approval from the European Parliament and a majority of EU member states before taking effect. |
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