Greg Van Elsen is senior industrial policy co-ordinator at Climate Action Network Europe

The European Commission promised an answer to geoeconomic competition; the reality risks being deregulation that penalises clean tech frontrunners

At a glance

  • The commission unveiled its Clean Industrial Deal 100 days ago

  • The deal is not delivering on its promises: the 2040 target remains absent; the EU continues to focus on diversifying fossil fuel suppliers, rather than doubling down on reducing energy and gas demand; circularity has received lip service but delivered little substance; and despite talk of strategic autonomy, resource use targets have not yet reached the negotiating table

  • The EU must engage with real reform — fundamentally rethinking state aid rules, more fiscal muscle and building institutional capacity capable of crafting integrated policy mixes to meet the enormous challenge of industrial transformation

A hundred days have passed since the European Commission unveiled its Clean Industrial Deal — a package that is meant to anchor decarbonisation at the heart of Europe’s economic future. But instead of clarity, ambition and direction, we have seen a slow unravelling of the promise that was made to citizens and workers in February. 

The deal, heralded as the EU’s answer to increasing geoeconomic competition, risks being heavy on rhetoric and light on delivery, except when it comes to deregulation.

At its launch, we expressed cautious support. But that support was always conditional — dependent on whether the deal could deliver on three essential fronts: a consistent climate policy including an ambitious 2040 target; cutting energy and resource demand while phasing out fossil fuels; and targeted investment for industrial transformation with strong social and environmental conditions for companies receiving aid. None of those conditions have been met.

A bleak start

The 2040 climate target remains absent, and with it the investment certainty that clean and responsible industries need. Moreover, opening the EU target to international credits risks holding back net zero technology frontrunners as the carbon price signal threatens to weaken, making polluters pay less.

On the energy front, the EU continues to focus on diversifying fossil fuel suppliers, rather than doubling down on proven solutions such as reducing energy and gas demand.

Instead of pursuing bold, forward-looking action, the commission has chosen to appease legacy industry lobbies with tired deregulation rhetoric

Increasing flexibility in state aid provisions for industrial decarbonisation could further lock in reliance on gas for decades. Regarding the use of primary materials, circularity receives lots of lip service but has delivered very little substance. And despite all the talk of strategic autonomy, resource use targets to lessen resource dependencies have not yet reached the negotiating table. 

When it comes to public support going to companies to drive the industrial transformation, the jury is still out, as the discussion on the EUs long-term budget is only in its initial stage, while instruments under the current EU budget are poorly targeted and lack robust social and environmental conditionalities.

Worrying signs concerning the next EU budget negotiations include numerous calls for public investment in less cost-effective, technological fixes such as carbon capture and storage and “low-carbon” hydrogen, as well as the proposal to reorient cohesion funds towards military spending.

Public finance must prioritise the sectors of the green future, not the fossil fuel past. 

Omnibus rally

Instead of pursuing bold, forward-looking action, the commission has chosen to appease legacy industry lobbies with tired deregulation rhetoric — weakening protections for workers, citizens and the environment through a slew of omnibus proposals, often undermining progressive industries that were front-running the transition.

We also reject the narrative that rules including the Corporate Sustainability Due Diligence Directive or broader Green Deal measures are undermining bloc’s competitiveness.

Industrial policy by deregulation is a dead end

The real roots of the EU’s economic stagnation lie elsewhere: in the energy price shock following Russia’s invasion of Ukraine; the unravelling of Europe’s export-oriented model amid global demand shifts and rising geopolitical tensions; the chronic weakness of domestic demand due to years of wage suppression and rising inequality; and, perhaps most importantly, a decade-long neglect of public investment in infrastructure and public services caused by restrictive fiscal rules.

These structural failures — combined with poor industrial planning in legacy industries and in key sectors of the future such as renewables, batteries and heat pumps — are the true drag on Europe’s economic dynamism, not its environmental or social ambition.

Industrial policy by deregulation is a dead end.

Real reform

Since the publication of the Clean Industrial Deal, faultlines in the world order have deepened. US President Donald Trump’s economic nationalism renewed trade war rhetoric, an accelerating clean tech arms race, and China’s carefully designed green industrial surge all underscore that Europe urgently needs a future-proof industrial policy — one that does not look backward, but embraces the green transition as an engine of prosperity and resilience.

Europe needs a coherent industrial strategy — rooted in public and private investment, social rights, a deeply reformed trade policy and climate ambition that delivers for Europeans effectively. In the short term, this means a binding and domestic 2040 climate target, faster renewable energy deployment, and a clear identification of sectors that need support and those that need to be phased out. 

In the long term, it means real reform — fundamentally rethinking state aid rules, more fiscal muscle and building institutional capacity capable of crafting integrated policy mixes to meet the enormous challenge of industrial transformation. 

The deal could have been a turning point, but unless the commission changes course, it will be a missed opportunity that fails the Green Deal and fails to give Europe a future.