On February 26th, the European Commission unveiled the Clean Industrial Deal (CID), setting out Europe’s shared roadmap for competitiveness and industrial decarbonisation. Bellona Europa welcomes this important leap forward in aligning Green Deal objectives with industrial policy, by accelerating decarbonisation, scaling up cleantech and clean manufacturing. Despite delaying the amendment to the European Climate Law, the CID reaffirms the EU’s commitment to reducing net emissions by 90% by 2040, ensuring the EU ‘stays the course’ towards climate neutrality. 

Key messages: 

• The Industrial Decarbonisation Bank is a welcome step, but safeguarding it and providing additional funding is crucial to ensure its effectiveness in accelerating industrial decarbonisation. 

• The CID crucially reaffirms the Commission’s commitment to implementing the ICM Strategy, vital for decarbonising hard-to-abate industries. However, the consistent use of the different terminologies and understanding of their climate impacts will be crucial in realising the potential of the technologies as well as ensuring related legislations’ effectiveness.  

• It is reassuring to see lead market creation placed at the forefront of the CID. To ensure the effectiveness of the proposed measures, non-price environmental criteria in public procurement and the Industrial Decarbonisation Accelerator Act (IDAA) must be mandatory, not optional.  

We welcome the European Commission’s move to mobilise €100 Billion through the Industrial Decarbonisation Bank. However, in addition to drawing from existing funding instruments such as the Innovation Fund and ETS revenues, it is important to also make available additional funding for the Bank to deliver. To ensure its effectiveness this Fund must be safeguarded in line with appropriate criteria and directed towards hardest-to-decarbonise sectors as a priority to accelerate the transition to climate neutrality and maximise emissions reductions. 

The CID crucially reaffirms the Commission’s commitment to the Industrial Carbon Management (ICM) Strategy calling for its implementation, which will be key to decarbonising energy-intensive industries. However, it is crucial that a consistent and accurate terminology is used in relation to ICM technologies across all EU communications, and this is currently inconsistent in the CID. As the EU moves forward on increasing legislation that covers CCS, CCU and CDR technologies, a harmonised understanding of the different terminologies and their climate impacts will be crucial in realising the potential of the technologies as well as ensuring the effectiveness of the legislation.

The possible integration of CDR into the EU ETS is a risky endeavour which must be carefully evaluated, and alternatives explored, to ensure it continues to function effectively as the EU’s primary driver of industrial decarbonisation. Finally, CCU products should only be incentivised or acknowledged through the EU ETS if the CO₂ is permanently and chemically bound in the product under normal use and end-of-life conditions. For products that do not meet these criteria outlined in the ETS Directive, the eventual release of CO₂ must be fully accounted for. 

Creating demand for clean industrial products is paramount and the CID aims to do just that. However, to achieve this objective, the right conditions must be set in place. The inclusion of non-price criteria, particularly the environmental criteria, in both public procurement and the Industrial Decarbonisation Accelerator Act (IDAA) is a step in the right direction. These criteria must be clear, aligned with broader climate goals, and mandatory, if the EU is to send a strong demand signal. The same applies to the accounting methodologies and labels linked to these criteria, which must also be based on robust lifecycle assessments and clear environmental standards. Labels must also set ambitious benchmarks that go beyond the current ETS, for sustained, long-term competitiveness. 

Context  

The Clean Industrial Deal is the European Commission’s response to the Antwerp Declaration, addressing industry’s call for a comprehensive strategy to boost competitiveness, secure affordable clean energy, scale up key infrastructure, streamline permitting, and create demand for low-carbon products while ensuring a predictable regulatory environment and access to finance for clean technologies. European industry faces challenges from unfair global competition, an unclear business case for deep decarbonisation, weak demand for low-carbon products, insufficient critical infrastructure, and CO₂ prices under the EU ETS that remain too low to drive significant decarbonisation efforts.