The initiative does not mark any fundamental change in the Commission's direction on the Green Deal, but rather an evolution of the existing framework, representing an effort at finding ways to support EU industry in its decarbonisation efforts and providing it with a certain level of protection from competition. It does not touch some of the key issues that are important to industry, such as the future direction of the ETS and its likely price development and the next stage of the rules and obligations regarding renewable energy. These will follow once the EU has agreed its 2040 greenhouse gas target. Nonetheless, there is much here that will be of great importance to a very wide range of industry established and operating in the EU.

1. Affordable energy

The affordable energy theme is structured around three actions: lowering electricity bills, accelerating the roll-out of clean energy and manufacturing, and ensuring well-functioning gas markets. 

Lowering electricity bills: Unsurprisingly, the Commission has not identified a single solution, but rather a series of actions aimed at having an overall positive effect. Three areas of proposed action include: reducing taxes on electricity (which falls under the jurisdiction of Member States, though Commission pressure can have significant effects over time); promoting power purchase agreements (PPAs) for both large and smaller companies (with the Commission establishing a guarantee mechanism of EUR 500 million via the EIB against default by the electricity purchaser); and issuing Commission guidance on using PPAs and contracts for differences for state aid financing of new energy projects by June 2025.

Accelerating the roll-out of clean energy and manufacturing: The Commission emphasizes that the best way to ensure affordable energy is to promote renewable energy, and the best way to benefit from the EU's greenhouse gas commitment is to advance net zero manufacturing. There is no single solution or change in direction; instead, the focus is on refining existing policies, such as:

• Promising a future grids package (focused on planning and financing).
• Permitting acceleration (through the future Industrial Decarbonisation Accelerator Act).
• Introducing a voluntary label indicating the carbon intensity content of industrial products. 
• Establishing a new 'Industrial Decarbonisation Bank' to support emission reduction projects. This is a major initiative as it aims to provide funding of EUR 100 billion using the Innovation Fund, additional revenues resulting from parts of the ETS and the revision of InvestEU. The new Bank will tender for technology-neutral support for projects using carbon emission reductions as a metric. Notably, the support instruments will include carbon contracts for difference, and are likely to be particularly important for CCS and the electrification of "low-heat" energy-intensive industries.
• Launching of a Horizon Europe call of around EUR 600 million under the 2026-2027 work program to support clean tech, clean energy and decarbonised manufacturing projects.

Ensuring well-functioning gas markets: There is no 'magic bullet' to lowering the EU's costs disadvantage for gas compared to competitors in gas producing countries, nor further reducing the use of Russian gas. However, a dedicated Gas Market Task Force has been established, with the aim of proposing more concrete actions in the future. 

2. Lead markets: boosting clean supply and demand

The lead markets initiative aims to benefit and protect key EU Clean Deal industries, notably through two key actions: 

Introducing non-price criteria in public procurement procedures and incentives for private purchases: The Commission plans to revise EU procurement rules to protect — or favour — EU manufacturers in public procurement contracts, based on the resilience and sustainability criteria already seen in the EU's Net-Zero Act, but extended by "EU content requirements". While the extent of this protection remains to be seen (and is a complex issue under WTO rules), this could be of considerable importance for EU industry. 

Promoting the uptake of renewable and low-carbon hydrogen: The Commission recognises that the initial EU targets for renewable hydrogen are clearly off-track, and investments are widely stalled. However, it does not propose any measures that will directly address this, limiting action to (i) committing to publish its delayed delegated act on the methodology for evaluating the emission savings of low-carbon hydrogen and fuels in Q1 2025, and (ii) releasing further tenders under the European Hydrogen Bank.

3. Financing

The financing theme is structured around three actions: strengthening EU-level funding; leveraging private investment; and reforming the state aid rules with a new Clean Industrial Deal State Aid Framework. 

Regarding EU-level funding, the Commission will establish the new 'Industrial Decarbonisation Bank' mentioned above, aiming at EUR 100 billion funding and already launching a first EUR 1 billion tender in 2025. In addition, the Commission will introduce resilience criteria in its own procurement procedures and will overhaul its own spending in the next budget (2027-2032), focusing on competitiveness actions. 

A major reform of the state aid rules will take place in Q2 2025, introducing new rules and guidelines covering renewable energy support schemes, aid for energy-intensive industries to decarbonise, aid for manufacturing clean technologies and aid to de-risk private investments in renewable energy, industrial decarbonisation, cleantech manufacturing and energy infrastructure. This will represent a major change in the current framework and merits careful attention by the industry.

4. Circularity

The circularity theme is structured around the rapid implementation of the Critical Raw Materials Act and the Circular Economy Act.

Circularity: The Commission will focus on implementing the Critical Raw Materials Act. This will be complemented by a new Circular Economy Act scheduled for 2026, which will establish a single market for secondary raw materials and waste and streamline the trade process for these commodities. The Commission will also propose an instrument to enable the joint purchase of raw materials for companies, through the establishment of the EU Critical Raw Materials Centre.

5. Global markets and international partnerships

This focuses on three actions: improving the Carbon Border Adjustment Mechanism (CBAM); promoting and protecting EU industry; and establishing clean trade and investment partnerships. These changes merit careful attention by industry.

Improving the CBAM: The Commission plans a comprehensive, two-stage reform of the CBAM. The first part will aim at simplifying the framework by targeting importers of small quantities of CBAM goods. The second step, scheduled for early 2026, is significant for industry. The Commission will consider extending the CBAM from its current scope (iron/steel, cement, fertiliser, aluminium, hydrogen and electricity) to other industries covered by the carbon leakage list (such as other metals, chemicals, glass, pulp and paper). At the same time, it would remove free ETS allowances for EU industry in these new CBAM sectors. The Commission will look to enhance the CBAM's effectiveness, potentially extending it to cover indirect emissions across all CBAM sectors and introducing export rebates. These changes could be highly impactful for the industry.

Promoting and protecting EU industry: The EU Commission aims to enhance existing trade defence instruments by shortening investigation timelines and making greater use of ex officio procedures.

Clean trade and investment partnerships: The Commission will look to develop Clean Trade and Investment Partnerships focused on better managing strategic dependencies, diversifying the EU's supply chains and securing better access to raw materials, clean energy and cleantech. It will also launch a new Pact for the Mediterranean, which will promote cooperation and trade in renewable energy, notably in Northern Africa. Given the very significant funds that the EU provides in this area, and their potential as a supplier of renewable electricity and hydrogen to the EU, this is likely to be important.