The Clean Industrial Deal: A step forward for
European industries’ transition and
competitiveness
Written by Marlène Siméon (marlene.simeon@fcarchitects.org)
The European Commission’s Clean Industrial Deal (CID) and Affordable Energy Action Plan (AEAP) set the stage for decarbonizing energy-intensive industries, while also strengthening their competitiveness. Future Cleantech Architects (FCA) welcomes these initiatives, which align with many of our long-standing priorities.
High energy prices remain a major challenge, undermining Europe’s manufacturing industries’ competitiveness–particularly in comparison to the U.S. and China–by putting pressure on operating costs. This situation delays decisions on investment. The European Union needs a comprehensive approach to reducing electricity prices, leveraging efficiency, flexibility, and innovation. Beyond energy costs, industrial sectors face additional barriers to integrating cleantech, including slow grid improvement and expansion, limited clean energy and infrastructure, and the need for a combination of tailored technical and engineering solutions to adapt their processes, including addressing high-temperature heat.
What is moving in the right direction?
✅ European industry is? at the core of the transition and needs to electrify
The CID rightly puts energy-intensive industries and cleantech together at the center of the EU’s industrial future. The recognition that affordable, clean, homegrown, and reliable energy is a prerequisite for industrial decarbonization is a major step forward considering Europe’s vulnerable energy situation. The target is set: “Increase economy-wide electrification rate from 21.3% today to 32% in 2030”.
In the AEAP, the European Commission highlights its intention to foster investments in clean firm power and innovative renewables (“next-generation clean energy technologies”, such as enhanced geothermal). This will be crucial for an efficient and holistic energy system. The Industrial Decarbonization Facility and financing mechanisms such as Power Purchase Agreements (PPAs) and Contracts for Difference (CfDs) should help de-risk investments in the electrification of industrial processes and energy storage.
✅ Grid modernization and energy affordability measures
The EU Grids Action Plan and forthcoming Grid Package (2026) introduce key improvements, including cross-border grid planning. The upcoming EU package should also emphasize the role of innovative technologies for the grid with dynamic line rating and reconductoring, for instance, solutions that FCA has advocated for to improve grid flexibility and industrial access to clean power. The proposal to lower electricity taxes and eliminate non-energy-related levies will also help address Europe’s high industrial electricity prices.
✅ A stronger push for lead markets and innovation
The CID proposes non-price criteria for public procurement, a move that will help scale clean products such as low-carbon cement and steel. The Horizon Europe pilot and Cleantech Investment Plan aim to strengthen EU funding for cleantech scale-up, a positive signal that more risk-tolerant investment mechanisms are coming. FCA will closely monitor how procurement and auction rules evolve, particularly in ensuring that energy intensity criteria are included in public tenders, in addition to emissions’ lifecycle analysis. Auctions and funding mechanisms should prioritize low-carbon and energy-efficient solutions, while also favoring the repowering of existing renewable infrastructure to maximize gains.
✅ Sectoral roadmaps for cement and aviation needed
The CID announces upcoming sector-specific transition pathways, such as the automotive, steel and metals, or chemical industry roadmaps. However, it does not seem to develop a dedicated roadmap for decarbonizing the cement sector, which remains one of the hardest-to-abate industries. Additionally, the Sustainable Transport Investment Plan should cover both CO2 and non-CO2 impacts in aviation, ensuring that contrail mitigation and operational efficiency play a role in reducing aviation’s climate impact.
✅ First-of-a-Kind (FOAK) cleantech projects need support
The Horizon Europe pilot and the EIB counter-guarantees are good steps forward and will have to focus particularly on FOAK to bridge the gap between demonstration and commercial deployment. Industrial decarbonization requires more funding instruments tailored to high-risk, capital-intensive (cleantech) projects in hard-to-abate sectors.
Where the Clean Industrial Deal can go further
🔎 Industrial heat is overlooked
Many industrial processes rely on chemical reactions and high-temperature heat, which cannot be completely decarbonized using currently available commercial technology. Despite the CID’s focus on electrification, high-temperature industrial heat remains absent. Thermal energy storage or alternative electrification solutions (such as plasma torches, resistive heating, or electric arc furnaces) are not mentioned yet. This gap is critical and should be addressed: industrial heat represents over 15% of global emissions, and electrification strategies must be designed for sector-specific needs. The forthcoming Heating & Cooling Strategy will be crucial and must include clear roadmaps for industrial heat decarbonization, beyond heat pumps for lower temperatures (>500°C).
🔎 No dedicated energy storage strategy
While the CID and AEAP reference energy storage and flexible tools as crucial to integrate more renewables in the energy system, there is no structured EU strategy foreseen for long-duration energy storage (LDES) or thermal storage for industrial applications that follows an integrated energy systems approach. Storage is essential for industrial-scale renewables integration and ensuring energy price stability. FCA urges the Commission to include a clear deployment roadmap for LDES and TES that provides guidance regarding how these flexibility tools can be integrated into energy systems to support industrial decarbonization.
🔎 Hydrogen and e-fuels: more targeted use is needed
The CID includes a new Hydrogen Bank call in Q3 2025 and a Sustainable Transport Investment Plan (STIP) focused on renewable and low-carbon fuels for aviation and waterborne transport, but it lacks a prioritization framework. FCA has long advocated for sector-specific hydrogen guardrails, ensuring these resources are reserved for sectors where hydrogen is an indispensable industrial feedstock or where there are no viable electrification alternatives. Without clear EU and national guardrails, including techno-economic analysis that take into account the levelized cost of hydrogen versus electricity, lifecycle GHG emissions reductions, and the total carbon abatement cost of deploying hydrogen versus heat pumps or direct electrification, there is a high risk of inefficient deployment of public resources and clean energy.