© European Union, 2025
The European Commission has finally started to unveil the Clean Industrial Deal (CID), an important milestone to start implementing the green transition promised under the Green Deal. In response to the mounting global economic competition, the EU attempts to safeguard its industrial competitiveness without sacrificing its climate ambition.
The CID should reduce administrative burdens, speed up permitting and use subsidies to re-anchor manufacturing capacity in the EU and regain strategic autonomy in the face of growing geopolitical instability.
So Why is the European business community at large lukewarm in welcoming the initiative?
The answer is simple: if the CID is not deployed correctly, it risks punishing the very companies that took the European Green Deal seriously from the start.
So What is at stake for the green pioneers?
The European Green Deal, launched in 2019, was groundbreaking: it wants to make Europe the first climate-neutral continent through systemic transformation, by relying on market mechanisms, regulatory pressure and long-term certainty. Policies like the EU Emissions Trading System (ETS), the Carbon Border Adjustment Mechanism (CBAM), greener public procurement rules and product standards were designed to create demand-side incentives and foster early adopters by trying to de-risk investment in cleaner innovation and technology. This also should provide extra incentives for private investors to provide the necessary capital to early adopters.
And it worked, Europe’s first movers stepped up, often at significant risk and cost, betting that early action would translate into long-term competitive advantage.
But due to the strategic shift underway in EU climate and industrial policy, the companies that pioneered decarbonisation and took the risks of investing early on in green innovation are now facing the risk that their leadership will backfire.
So Why are they worried?
Political priorities in the Brussels bubble and in the Member States have changed and the new buzzwords have become speed, scale and strategic autonomy. The CID has as stated purpose to provide a stronger business case for big industrial investments towards climate-neutrality. The focus is no longer on decarbonisation or green transition , but on the domestic production of clean technologies. It is about reindustrialisation of the EU “whatever it takes”.
And to that goal the CID promises a whole bunch of initiatives, including accelerated access to public funding and the facilitation of tax breaks and direct state support at national level for strategic net-zero technologies.
The early climate champions are now facing the prospect of their fashionably late competitors benefiting from improved risk-sharing and more generous financing structures, catching-up more rapidly and bringing their initially calculated return on investment at risk.
This also motivated the recent call by a broad group of major European companies, across different sectors, not to delay the implementation of the Deforestation directive, another crucial regulation under the Green Deal. A similar call urging the EU Commission not to weaken the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) was made in February by businesses organisations representing more than 6000 members.
So does that make the Clean Industrial Deal a bad deal?
Not necessarily, the geopolitical winds have been turning. The Trump administration has also made it very clear to the European leaders that they need to act decisively and quickly to protect the EU’s values and interests and to stay relevant on the world stage. Not only in the field of defence, but also in the field of international trade and strategic autonomy. At all levels of the EU finally a sense of urgency seems to have taken over the traditionally slow bureaucratic decision-making process of the EU institutions.
The Clean Industrial Deal has the potential to be a powerful complement to the Green Deal to help the EU regain its economic autonomy and defend its status of key geopolitical power to be dealt with.
The EU absolutely needs to step up its game and that includes initiatives such as the CID that helps laggards to catch-up massively and rapidly. Speed and scale definitely matters, yes, but long-term resilience and leadership require more than just that. They require risktakers and innovators, constantly advancing the EU technological and technical edge.
So the imperative rush for reindustrialisation of the EU should not come at the cost of punishing the best students in the room, who believed in the Green Deal and were brave enough to invest. With the vast majority of the CID action plans still to be developed, finetuned and implemented, it is not too late for the European Commission to give some thought on how to implement fair rewarding mechanisms for the investments already made by the first movers. We will need them in the future!
Written by Pierre Deraedt, Partner at SoWhatCommunications International