Can the Clean Industrial Deal deliver the business case for decarbonisation?
This week, the EU launched the policy package that will define its new mandate – the Clean Industrial Deal. Pitched as “a transformational business plan” linking Europe’s climate and competitiveness goals, the Deal is Europe’s answer to the alarm raised by the Draghi report last year.
To succeed in this, businesses must align with sustainability, technological progress, and resource security. In two studies, Emmanuelle Trichet explores how companies can transform their business models, integrating climate science and natural resource constraints. Besides, for banks, new European supervisory guidelines offer a beacon of hope for embedding ESG risks into financial portfolios, as Natasha Chaudhary explains in this Op-Ed.
However, the simplification Omnibus on sustainable finance casts doubt on the EU’s supervisory ambitions, including banking transition plans.
In an era of fractured supply chains, geopolitical tensions, and war on Europe’s borders, part of the solution demands Europe turns towards its own industrial base. Enter the Clean Industrial Deal. The Commission’s roadmap announces key initiatives. Strengthened procurement criteria can create lead markets for European green industries like steel and electric vehicles. On investment, a strengthened Innovation Fund and a new “Decarbonisation Bank” aim to direct public capital toward strategic green projects.
Yet, two issues remain. First, the Deal lacks strategic clarity. A good business plan prioritises investments for maximum impact, but the Clean Industrial Deal remains vague. Without clear governance outlining priorities and guiding national investment, the EU risks funding projects that do not drive decarbonisation and competitiveness.
Second, a plan without enough investment won’t go far. While initiatives like the Competitiveness Fund are welcomed, more short-term public investment is needed. Announced efforts to boost the Innovation Fund and the crucial reforms to state aid and IPCEI rules will be important to follow.
The Clean Industrial Deal is a step forward, but another layer of uncoordinated measures is not the green industrial strategy Europe needs. The EU cannot afford business as usual.
