Clean Industrial Deal: A Real Game-Changer for Europe's Energy-Intensive Industries?

An Analysis of the Clean Industrial Deal

Part 1: Energy-Intensive Industries

The signals sent by Europe provide manufacturers with clarity to plan their environmental strategy

Following the Draghi report, the European Commission defined a set of measures in February 2025—known as the “Clean Industrial Deal”—to support the environmental transition of industrial companies and make this transition a factor in their competitiveness.

In fact, “traditional” industrial players are currently facing significant difficulties in making the transition. They are hindered in this effort by several factors:

• One first step is to eliminate the use of fossil fuels in its operations, but this transition is costly, complex, and highly uncertain.
• A second step will be to review the composition of its products and reduce its exposure to critical materials, but access to recycled materials is limited.
• The actions taken represent net costs for the company and are not directly factored into the economic equation.
• "Clean" products are often more expensive, raising the question of potential markets.

The Clean Industrial Deal offers some initial answers to all these questions.

• The plan for affordable energy aims to reduce long-term uncertainty regarding the supply of green energy and dependence on the grid, in order to increase clarity regarding the available energy mix and the associated energy costs.
• Funding mechanisms will be established for decarbonization projects, to facilitate the transition of industrial processes toward greater decarbonization.
• Both the Critical Raw Materials Act and the Circular Economy Act propose mechanisms for aggregating demand at the European level for critical materials, in order to enable a shift in its supply chain toward European, recycled, or low-carbon materials.
• The overhaul of the Carbon Border Adjustment Mechanism aims toInclude CO2 in the economic equation, while also ensuring fairness with respect to imported products.
• Public demand will force the market to supply “clean” products, creating a an outlet and a significant new market for these products.

We have reviewed these various measures to help the relevant stakeholders understand how to make use of these texts. Two main types of industries are involved: traditional energy-intensive industries and future-oriented sectors, both of which are addressed in these European texts. We have therefore decided to present these analyses in two articles. The following article focuses on energy-intensive industries. The complementary analysis on the future sectors of the energy transition is also available at this link.

Publication of the Clean Industrial Deal began in 2024 and will continue gradually through Q4 2026. This article is part of that timeline; certain aspects of the Clean Industrial Deal are likely to become clearer as more publications are released.