EU Commission presents Clean Industrial Deal

What is striking about the European Commission’s (EC) ambitious Clean Industrial Plan is that AI-supported biotechnology, which was at the centre of the previous Green Deal plan, has been replaced by the new term ‘cleantech’. According to the Commission president Ursula von der Leyen, the aim of the Clean Industrial Deal is to make the EU the global market leader in the circular economy by 2030. Unlike the USA and ex-EU UK, however, the Commission does not see the highly efficient biological recovery of rare earths, engineering biology, and the replacement of fossil chemical technology with CO2-negative biological decarbonisation technologies as the future, but is instead focusing in an immediate package of measures on making the energy supply, which is 2-3 times more expensive in Europe, cheaper and providing incentives to implement a circular economy and accelerate the technology transfer of innovative technologies. Not a word about the fact that the Draghi report clearly states that half of the innovative cleantech companies supported by the EIB are biotech start-ups, which is a cold shower for them.

According to the Commission, “it is clear that a competitiveness and decarbonisation strategy is […] a security imperative. The EU must urgently address three challenges at once: the climate crisis and its consequences, competitiveness concerns and economic resilience,” it explains the new challenge at a time where China and the US are following more and more their national agendas instead of seeking international collaboration. “It must present European industry with a stronger business case for large climate neutral investments in energy-intensive industries and clean tech”, the EU Commission’s 24-page communication adds, in which the term biotechnology is completely lacking.

Decrease energy prices

In order to catch up with the economic leader USA and the third strongest economic bloc China ( 2024) in terms of energy prices, the Commission has published an Action Plan for Affordable Energy as the first action of the Clean Industrial Deal. This pursues three objectives: lowering energy prices for companies, accelerating the introduction of clean energies, which from the Commission’s end-of-pipe perspective are primarily of an electrical nature – i.e. solar and wind power and fostering circularity and clean-tech.

As the Commission knows that fossil natural gas will continue to determine the price of electricity, it plans to allow Member States to subsidise it. As the EU is still heavily dependent on natural gas imports from the US and Russia (worth €7 billion in 2024 from Russia alone), the Commission has set up a Natural Gas Market Task Force to comprehensively analyse the EU natural gas markets and take action where necessary to ensure the optimal functioning of the market, prevent trading practices from distorting market-based pricing and learn lessons from the energy crisis.

It also wants to examine how the expansion of nuclear energy can be promoted – an important goal in Germany’s next chancellor’s strategy of economic recovery –in a technology-neutral manner, how investments in renewable energies can be rewarded and how energy-intensive processes in companies can be made cheaper through taxation and the optimisation of network charges.

As the Commission has identified lengthy authorisation procedures as a major problem for energy-intensive industries that want to electrify, it wants to largely automate this process, i.e. replace slow civil servants with fast AI.  A planned decarbonisation acceleration law is intended to flesh out the measures. However, one problem with the renewable energies wind, water and sun that have been subsidised to date is that although they are ideally climate-neutral, they do not remove any CO2 from the atmosphere.

In addition to the electrification of industry, the EU Commission is focusing on sustainable hydrogen, i.e. hydrogen that is not produced from fossil resources, as an energy storage medium – an extremely volatile gas with low combustion enthalpy and currently still high production costs. In order to change this, it wants to invest massively, for example through a new call within the framework of the hydrogen bank with a budget of up to €1bn. The Commission also wants to explore the potential of hydrogen fuels: In preparation for the revision of the delegated act on renewable fuels of non-biological origin, it is commissioning a study to identify obstacles to the spread of renewable hydrogen. However, the Clean Industrial Deal does not provide any information on the legal future of synthetic or biofuels (link, page reference Enilive).

To counter-finance its energy, industrial innovation, upscaling and transport targets, the Commission needs an additional €480bn compared to the 2020-2020 period, which it intends to provide from the medium-term budget plan and by incentivising industry investment. It intends to spend €100bn alone on incentives for clean manufacturing as part of the Clean Industrial Deal.

Critical raw materials

In order to incentivize recycling and circularization, the Clean Industry Act will prioritise the implementation of the Critical Raw Materials Act with its 25% recycling goal and the Ecodesign for Sustainable Product Regulation by 2025. The European Commission also wants to improve access to CRMs and international collaboration towards technologies that have the potential to reduce CRM and energy dependenies as well as improving collaboration in clean energy and product development through free-trade agreements and incentivation of global CO2 certificate trade.

Sector specific measures

The Commission announces also to publish several sector-specific plans in 2025, i.e. for the Automotive Sector, for the steel and metals sector, for the chemical industry sector alongside with a sustainable transport investment plan that is designed to support development and commercialization fo renewable and low-carbon fuels for aviation and waterborne transport. Last but not least, the Commission will launch an update of its Bioeconomy Strategy in December, to improve resource efficiency and to tap the potential of bio-based materials substituting fossil-based materials, and related industries. According to the Commission, it will lay down priorities for manufacturing and using biomaterials, and for retaining them as long as possible in the economy. Industry has already answered.