On Wednesday 26 February 2025, Ursula von der Leyen presented the European Commission’s Clean Industrial Deal (hereinafter: “CID”), a much-awaited roadmap with plans aimed at improving the competitiveness of the European Union and increasing sustainable and resilient production in Europe. The CID comes together with an EU Action Plan for Affordable Energy – access to affordable energy is indeed a cornerstone of the CID. The plans confirm the goal of net-zero emissions by 2050 whilst maintaining and improving the competitive position of the Union. In this blog we will spotlight key points of the Commission’s ambitious plans and what this might mean for industry and governments alike with a particular focus on State aid, competition law, public procurement and foreign direct investment rules.
Impact on State aid rules
State aid forms a cornerstone in achieving the goals set out in the CID. As the Commission states:
“National level support, including State aid support and tax incentives, plays a crucial role in decarbonisation and circularity efforts by providing financial backing and reducing barriers to investment”
Therefore, the Commission seeks to simplify and expand the EU State aid rules and it aims to do so by June 2025.
An important aspect of this ‘simplification process’ is the upcoming review of the General Block Exemption Regulation. This review will significantly lower the existing bureaucratic burden on both Member States and companies. The changes will also aim to incentivise industry to invest in “upskilling, reskilling, quality jobs and recruitment of workers for a just transition”. The Commission is also evaluating the Guarantee Notice.
Other envisioned changes to the State aid rules include:
- Longer planning horizon of five (5) years, creating more investment predictability for projects contributing to the CID;
- Simplification and greater flexibility within the framework, allowing for faster approval of State aid measures;
- Provide ‘off-the-shelf’ options for Member States to demonstrate compatibility and simplified procedures to set aid amounts;
- Separate support for specific schemes such as wind and solar technologies;
- One stop shop with EIB for grant application and structuring advice.
Additionally, the Commission recommends that Member States adapt their corporate tax systems in such a way that they support a clean business case. Insofar as these tax measures constitute State Aid, the new State aid framework will provide guidance on the compatibility of such tax measures with State aid rules.
Furthermore, the CID contains the controversial proposal of supporting State aid for natural gas. Whilst still a fossil fuel, the Commission notes that gas does offer significant advantages over competing fossil energy sources such as coal or oil. The Commission’s Gas Market report planned for Q4 of 2025 will be a first step in the process.
Finally, the Commission also seeks to expand EU level funding. It seeks to establish an Industrial Decarbonisation Bank that will mobilise funds over EUR 100 billion. Funding will be formed on the basis of the existing Innovation Fund as well as the Emissions Trading System and InvestEU. Within that budget, the Commission plans to commit EUR 6 billion to clean technologies such as batteries and hydrogen.
Public procurement
The Commission sees public procurement as a powerful instrument to shape demand and support sustainable and resilient industrial ecosystems, as well as jobs and value creation in the EU. In that context, the Commission wishes to encourage the use of non-price criteria in public procurement to promote circular and renewable businesses. More generally, the Commission seeks to revise the EU public procurement legislation in 2026, as well as consolidate, clarify and simplify the existing rules.
In the short term, the Commission expects that the introduction of an Industrial Decarbonisation Accelerator Act will widen the application of non-price criteria in the EU budget and public and private procurement. This Act will introduce resilience and sustainability criteria to foster clean EU energy supply to energy-intensive sectors.
Private investments and competition law
To promote private investment, the CID seeks to amend the InvestEU Regulation to increase risk bearing capacity by EUR 50 billion. This will largely be financed through existing schemes such as the EU Fund for Strategic Investments and reflows from legacy financial instruments as well as equity support.
On top of this, the Commission has mentioned that it is ready to offer guidance on the compatibility of cooperation projects, such as joint ventures, with its competition rules. More concretely, it has promised a review of the merger control guidelines to ensure that the impact of mergers on affordability of clean innovation, sustainable products, clean innovation and other CID goals are better integrated in the analysis. The guidelines on the Foreign Subsidies Regulation that will be adopted in early 2026 will also incorporate the CID to some extent.
Foreign Direct Investment (FDI)
The Commission recognises that foreign (i.e., non-EU) investments can contribute to the long-term competitiveness of the EU industry. However, the Commission also refers to the importance of protecting Europe’s security and public order. Therefore, the Commission refers to the ongoing review of the EU FDI Screening Regulation. With this review the Commission seeks to reduce the differences between national screening mechanisms and thereby minimising the risks of ‘forum shopping’ by foreign undertakings.
Conclusion
In summary, the Commission has set some ambitious goals within a very tight timeframe for the EU to achieve a clean and strong industry. Time will tell if the Commission will be able to manage to deliver its plans and to meet the expectations. We will be keeping a close eye on the developments as they come and are ready to assist you in any of these matters.
Questions on the CDI, or anything else mentioned in this blog? Don’t hesitate to contact us! We or our colleagues will be happy to offer guidance in these matters. Interested in these kinds of updates? Click here to sign up for our newsletters so you get the latest on EU law developments.
On Wednesday 26 February 2025, Ursula von der Leyen presented the European Commission’s Clean Industrial Deal (hereinafter: “CID”), a much-awaited roadmap with plans aimed at improving the competitiveness of the European Union and increasing sustainable and resilient production in Europe. The CID comes together with an EU Action Plan for Affordable Energy – access to affordable energy is indeed a cornerstone of the CID. The plans confirm the goal of net-zero emissions by 2050 whilst maintaining and improving the competitive position of the Union. In this blog we will spotlight key points of the Commission’s ambitious plans and what this might mean for industry and governments alike with a particular focus on State aid, competition law, public procurement and foreign direct investment rules.
Impact on State aid rules
State aid forms a cornerstone in achieving the goals set out in the CID. As the Commission states:
“National level support, including State aid support and tax incentives, plays a crucial role in decarbonisation and circularity efforts by providing financial backing and reducing barriers to investment”
Therefore, the Commission seeks to simplify and expand the EU State aid rules and it aims to do so by June 2025.
An important aspect of this ‘simplification process’ is the upcoming review of the General Block Exemption Regulation. This review will significantly lower the existing bureaucratic burden on both Member States and companies. The changes will also aim to incentivise industry to invest in “upskilling, reskilling, quality jobs and recruitment of workers for a just transition”. The Commission is also evaluating the Guarantee Notice.
Other envisioned changes to the State aid rules include:
- Longer planning horizon of five (5) years, creating more investment predictability for projects contributing to the CID;
- Simplification and greater flexibility within the framework, allowing for faster approval of State aid measures;
- Provide ‘off-the-shelf’ options for Member States to demonstrate compatibility and simplified procedures to set aid amounts;
- Separate support for specific schemes such as wind and solar technologies;
- One stop shop with EIB for grant application and structuring advice.
Additionally, the Commission recommends that Member States adapt their corporate tax systems in such a way that they support a clean business case. Insofar as these tax measures constitute State Aid, the new State aid framework will provide guidance on the compatibility of such tax measures with State aid rules.
Furthermore, the CID contains the controversial proposal of supporting State aid for natural gas. Whilst still a fossil fuel, the Commission notes that gas does offer significant advantages over competing fossil energy sources such as coal or oil. The Commission’s Gas Market report planned for Q4 of 2025 will be a first step in the process.
Finally, the Commission also seeks to expand EU level funding. It seeks to establish an Industrial Decarbonisation Bank that will mobilise funds over EUR 100 billion. Funding will be formed on the basis of the existing Innovation Fund as well as the Emissions Trading System and InvestEU. Within that budget, the Commission plans to commit EUR 6 billion to clean technologies such as batteries and hydrogen.
Public procurement
The Commission sees public procurement as a powerful instrument to shape demand and support sustainable and resilient industrial ecosystems, as well as jobs and value creation in the EU. In that context, the Commission wishes to encourage the use of non-price criteria in public procurement to promote circular and renewable businesses. More generally, the Commission seeks to revise the EU public procurement legislation in 2026, as well as consolidate, clarify and simplify the existing rules.
In the short term, the Commission expects that the introduction of an Industrial Decarbonisation Accelerator Act will widen the application of non-price criteria in the EU budget and public and private procurement. This Act will introduce resilience and sustainability criteria to foster clean EU energy supply to energy-intensive sectors.
Private investments and competition law
To promote private investment, the CID seeks to amend the InvestEU Regulation to increase risk bearing capacity by EUR 50 billion. This will largely be financed through existing schemes such as the EU Fund for Strategic Investments and reflows from legacy financial instruments as well as equity support.
On top of this, the Commission has mentioned that it is ready to offer guidance on the compatibility of cooperation projects, such as joint ventures, with its competition rules. More concretely, it has promised a review of the merger control guidelines to ensure that the impact of mergers on affordability of clean innovation, sustainable products, clean innovation and other CID goals are better integrated in the analysis. The guidelines on the Foreign Subsidies Regulation that will be adopted in early 2026 will also incorporate the CID to some extent.
Foreign Direct Investment (FDI)
The Commission recognises that foreign (i.e., non-EU) investments can contribute to the long-term competitiveness of the EU industry. However, the Commission also refers to the importance of protecting Europe’s security and public order. Therefore, the Commission refers to the ongoing review of the EU FDI Screening Regulation. With this review the Commission seeks to reduce the differences between national screening mechanisms and thereby minimising the risks of ‘forum shopping’ by foreign undertakings.
Conclusion
In summary, the Commission has set some ambitious goals within a very tight timeframe for the EU to achieve a clean and strong industry. Time will tell if the Commission will be able to manage to deliver its plans and to meet the expectations. We will be keeping a close eye on the developments as they come and are ready to assist you in any of these matters.
Questions on the CDI, or anything else mentioned in this blog? Don’t hesitate to contact us! We or our colleagues will be happy to offer guidance in these matters. Interested in these kinds of updates? Click here to sign up for our newsletters so you get the latest on EU law developments.