# The Clean Industrial Deal explained: the EU plan for cheap energy and clean industry

> The Clean Industrial Deal is the European Commission's plan, presented on 26 February 2025, to make decarbonisation a source of industrial competitiveness. It pairs an Action Plan for Affordable Energy, which the Commission says could save €45 billion in 2025 and €260 billion a year by 2040, with a looser state-aid framework, an Industrial Decarbonisation Bank aiming for €100 billion, and demand for low-carbon, European-made products. Since then the state-aid framework has been in force since June 2025, the first pilot auction for clean industrial heat has picked 65 projects, and the Industrial Accelerator Act is still going through Parliament and Council. The radical-centre reading backs the plan wherever money is allocated by open, Europe-wide competition and paid per result.

- URL: https://www.radicalcentre.eu/en/articles/clean-industrial-deal-explained
- Language: en
- Publisher: radical centre / centro radical
- Published: 2026-11-10
- Topic: Climate & energy
- Author: radical centre
- Licence: CC BY 4.0

## Key points

- The Clean Industrial Deal (COM(2025) 85) was presented on 26 February 2025 with six business drivers: affordable energy, lead markets, financing, circularity, global partnerships and skills.
- Its companion Action Plan for Affordable Energy estimates savings of €45 billion in 2025, €130 billion a year by 2030 and €260 billion a year by 2040.
- The state-aid framework (CISAF) was adopted on 25 June 2025; Spain has used it, for example for a €408 million scheme to decarbonise existing factories.
- The first Innovation Fund heat auction, a pilot for the €100 billion Industrial Decarbonisation Bank, selected 65 projects in 10 countries in May 2026; Spain put €490 million into the 2025 auctions.
- The Industrial Accelerator Act, proposed on 4 March 2026, targets manufacturing at 20% of EU GDP by 2035 and is still under negotiation.

The Clean Industrial Deal is the European Commission's answer to a simple worry: that Europe would decarbonise by closing its factories. Presented on 26 February 2025, its official title is "a joint roadmap for competitiveness and decarbonisation", and its bet is that the two can travel together if energy gets cheaper and clean products find buyers. It follows directly from the diagnosis in Mario Draghi's report on European competitiveness, which put energy prices and the innovation gap at the top of the list (we explained it in [our piece on the Draghi report](/en/articles/draghi-report-explained-european-competitiveness)). Cheap clean energy also matters for one of the problems Democracia 21 raised at its launch, growth through productivity, which we mapped in [our overview of the party's proposals](/en/articles/democracia-21-miriam-gonzalez-proposals-radical-centre).

## What the Commission put on the table

The communication, COM(2025) 85, starts from Europe's energy bill. It says European energy prices are higher and more volatile than those of its trading partners, mainly because the EU imports fossil fuels. The companion Action Plan for Affordable Energy adds figures: for a medium-sized industrial consumer, retail electricity in 2023 was still 97% above its 2014–2020 average, and the EU's fossil-fuel import bill hit €604 billion in 2022.

The Deal is organised around six business drivers: affordable energy, lead markets, financing, circularity and access to materials, global markets and partnerships, and skills. The headline is that it will mobilise over €100 billion for EU-made clean manufacturing.

On energy, the Action Plan for Affordable Energy has eight actions. It asks member states to cut national taxes on electricity, proposes a method so that network charges reflect the real costs of the system, wants faster permits for renewables and grids, and pushes long-term supply contracts so that household and industrial bills stop following the price of gas. The Commission estimates the savings at €45 billion in 2025, €130 billion a year by 2030 and €260 billion a year by 2040. The Deal's own targets include raising electrification from 21.3% of energy use to 32% by 2030 and installing 100 GW of renewable capacity a year until then.

On demand, the Commission wanted to create lead markets for clean products, with sustainability, resilience and EU-content criteria in public and private procurement, and a voluntary carbon-intensity label starting with steel. On money, it proposed an Industrial Decarbonisation Bank aiming for €100 billion, built from the Innovation Fund, part of the revenues of the emissions trading system and a revised InvestEU, which would add about €50 billion of financing. It promised a new state-aid framework to approve support faster. On materials, it set a target of 24% circular material use by 2030, up from 11.8%, with a Circular Economy Act due in 2026.

## What has actually happened since

The state-aid framework came first. The Clean Industrial Deal State Aid Framework, known as CISAF, was adopted on 25 June 2025 and covers renewables, industrial decarbonisation and clean-tech manufacturing. Spain has been using it. In December 2025 the Commission approved a €408 million Spanish scheme, paid for by the Recovery and Resilience Facility, to decarbonise existing plants in chemicals, ceramics, paper and metallurgy through electrification, renewable or low-carbon hydrogen, waste-heat recovery and carbon capture.

The Industrial Decarbonisation Bank is still a target. Its test runs are auctions under the Innovation Fund. The first pilot for clean industrial heat closed in February 2026 with 85 bids from 14 countries asking for €1.4 billion against a €1 billion budget. In May 2026 the Commission selected 65 projects in 10 countries, worth about 766 MW of thermal capacity and 16.3 TWh of decarbonised heat over their first five years. The hydrogen auction held alongside it drew €8.4 billion of requests for €1.3 billion. Spain took part through what the Commission calls auctions-as-a-service, adding €490 million of national money (€440 million for hydrogen and €50 million for heat) to fund Spanish projects through the same EU competition. A second €1 billion heat auction opens in early December 2026.

The demand side moved more slowly. What was announced as an Industrial Decarbonisation Accelerator Act for late 2025 arrived on 4 March 2026 as the Industrial Accelerator Act. According to the European Parliament's research service, it sets a target of manufacturing at 20% of EU GDP by 2035, up from 14.3% in 2024. It requires minimum shares of low-carbon steel, concrete and aluminium in public procurement and support schemes for buildings, infrastructure and vehicles from 2029, ties support for zero-emission vehicles to EU assembly and content, gives each country a single access point and a single permit procedure, and asks each to designate at least one industrial acceleration area. It also places conditions on foreign investments above €100 million in batteries, electric vehicles, solar and critical raw materials when a third country holds more than 40% of global capacity. The "One Europe, one market" roadmap sets the end of 2026 as the target for a deal on it; Parliament and Council have yet to set their positions.

## A radical-centre reading

The left is right that Europe needs a common industrial strategy and public money behind it. Without one, decarbonisation becomes a slow export of steel, chemicals and jobs. The market-liberal tradition is right that cheap energy comes mainly from integrated markets, competition, interconnectors and faster permits, and that a subsidy race between member states fragments the single market and favours those with the deepest pockets. Looser state-aid rules help most the governments with the most fiscal room.

The heat auction points to a way of holding both. It is technology-neutral, Europe-wide and competitive: firms say how much support they need for each tonne avoided and the cheapest win. Spain's top-up shows how a national budget can ride on that competition instead of running its own contest. The radical-centre position is to make this the default for the Industrial Decarbonisation Bank and for national aid under CISAF: pay per tonne of CO2 avoided or per megawatt-hour delivered, publish every bid and every result, and let funding stop automatically where projects fail to deliver. Content rules in the Industrial Accelerator Act should face the same test, judged by the price per tonne they add to a public building.

## FAQ

### What is the Clean Industrial Deal?

It is the European Commission's roadmap for competitiveness and decarbonisation, presented on 26 February 2025. It aims to lower energy costs, create demand for clean European products, finance industrial decarbonisation, raise circularity and secure raw materials and skills, with over €100 billion to be mobilised for EU-made clean manufacturing.

### What is the Industrial Decarbonisation Bank?

It is a funding vehicle the Commission proposed in the Clean Industrial Deal, aiming for €100 billion and drawing on the Innovation Fund, part of the emissions trading revenues and InvestEU. Its pilots are auctions for clean industrial process heat: the first selected 65 projects in May 2026 and a second, worth €1 billion, opens in December 2026.

### What is the Industrial Accelerator Act?

It is a regulation the Commission proposed on 4 March 2026. It sets minimum shares of low-carbon and EU-origin products in public procurement and support schemes, single permit procedures and industrial acceleration areas, and conditions on large foreign investments in strategic sectors. Parliament and Council have not yet adopted it.

### How does the Clean Industrial Deal affect Spain?

Spain has approved state aid under the new framework, including a €408 million scheme co-funded by the recovery plan to decarbonise existing factories, and it added €490 million of national money to the EU's 2025 hydrogen and heat auctions so that more Spanish projects could be funded.

## Sources

- [The Clean Industrial Deal: a joint roadmap for competitiveness and decarbonisation, COM(2025) 85](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0085), European Commission (EUR-Lex) (2025)
- [Commission puts forward Action Plan for Affordable Energy](https://ireland.representation.ec.europa.eu/news-and-events/news/commission-puts-forward-action-plan-affordable-energy-2025-02-26_en), European Commission Representation in Ireland (2025)
- [Industrial Accelerator Act (EPRS briefing)](https://eprs.europarl.europa.eu/contents/publications/EPRS/2026/05/EPRS_BRI(2026)789300.html), European Parliamentary Research Service (2026)
- [Innovation Fund 2025 auctions attract almost €10 billion in bids for European industry decarbonisation](https://climate.ec.europa.eu/news-other-reads/news/innovation-fund-2025-auctions-attract-almost-eu10-billion-bids-european-industry-decarbonisation-2026-03-20_en), European Commission, DG Climate Action (2026)
- [IF25 Heat Auction](https://climate.ec.europa.eu/areas-action/eu-funding-climate-action/innovation-fund/calls-proposals/if25-heat-auction_en), European Commission, DG Climate Action (2026)
- [Commission approves €408 million Spanish State aid scheme to support decarbonisation of industry](https://transition-pathways.europa.eu/chemicals/news-articles/commission-approves-eur-408-million-spanish-state-aid-scheme-support), European Commission, Transition Pathways (2025)