Your main questions answered about what the European Commission’s so-called ‘Clean Industrial Deal’ is and how it fits into President Von Der Leyen’s ‘competitiveness’ agenda.
Corporate Europe Observatory (CEO) is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making.
Cross-posted from Corporate Europe Observatory
1. What even is the Clean Industrial Deal (CID)?
The cornerstone of the EU’s quest for ‘industrial competitiveness’ via deregulation and public finance for Europe’s biggest polluters
Released on 26 February 2025, the European Commission’s Clean Industrial Deal (CID) is billed by its promoters as a plan to turn “decarbonisation into a driver of growth for European industries”. The Commission’s own website states that it focuses on energy-intensive industries and the clean-tech sector, aiming to:
- bring down energy prices;
- boost demand for low-carbon products;
- finance the clean transition;
- ensure access to raw materials (including via a circular economy);
- harness trade policy to these ends;
- create the necessary skills and quality jobs.
However, the CID is actually a cornerstone of the broader EU political agenda that has taken over Brussels: strengthening the “competitiveness” of European industry while – falsely – claiming to meet the EU’s climate target of net zero emissions by 2050. This will be done through a combination of simplifying/weakening regulations (deregulation) and providing financial support for some of the continent’s most polluting companies and their techno-fix “solutions”, including via State aid, which was not previously considered acceptable by many industry lobby groups.
The Commission is heavily promoting the need for “competitiveness”, but this remains a vague concept. Too often it means doing whatever industry wants, which means throwing out environmental and social protections – including urgently needed climate action. That’s why false climate “solutions” like carbon capture and storage (CCS), hydrogen and liquified natural gas (LNG) – all part of industry’s “net zero” tool-box – get increased taxpayer subsidies under the CID.
However, these techno-fixes won’t tackle the climate crisis (see Part III – coming soon). Instead they will help the dirtiest industries to continue polluting land, water, and air while rebranding themselves as “clean”. In short, the CID will prolong the age of fossil fuels while ignoring the multiple crises impacting our health and environments. It’s not clear how “competitive” the EU will even be if it pursues this short-sighted path, which is business as usual with an added bonfire of social and environmental protections.
2. Is the CID actually clean?
This Dirty Industrial Deal ignores the pollution of land, water, and air by Europe’s dirtiest industries, while keeping the EU economy hooked on fossil fuels
The CID should be known as the DID: the Dirty Industrial Deal. As well as deepening the EU’s commitment to false techno-fix solutions to the climate disaster, it marks a break with past ambitions to address a wide array of environmental problems, including chemical pollution, deforestation, and biodiversity decline. Instead of the “polluter pays” principle, in this Dirty Deal the “polluter gets paid”, leaving the public to foot the huge bill for the health and environmental consequences of chemical pollution.
The so-called “clean” deal is focused solely on decarbonisation, conveniently ignoring the pollution of land, water, and air by Europe’s dirtiest industries, undermining the Earth’s carrying capacity. For instance, the commitment to “zero pollution ambition for a toxic-free environment”, announced in the European Green Deal (EGD) just five years ago, has been entirely thrown out, meaning there will be continued use of harmful chemicals, perpetuating a heavy cost for human health, the environment, and the economy. If it’s not targeting the multiple planetary crises together, there is no question of it being a “clean” deal.
The strong focus on what is euphemistically called “simplification” of regulations is actually a destructive slashing of the rules we need to protect us. It is also a huge threat to any efforts to clean up our environment, create the conditions for ecosystems to recover, or tackle climate change. The term* occurs no fewer than 16 times in the 23 page document. With fewer protections for workers, communities, and our environments, this deal is as dirty as they come.
*Total count of the terms “simplification”, “simplify” and “simplified” in the Commission proposal
3. Where does the CID come from and who’s behind it?
The CID has been a long time in the making, through close collaboration between the European Commission and a well-organised industry lobbying effort. The official CID Communication was published on 26 February 2025 at a closed-door meeting with some of Europe’s biggest polluters. The document explicitly states that it is “the result of the active engagement of industry leaders… through the Antwerp Declaration for a European Industrial Deal and the Clean Transition Dialogues.” Both of these have been powerful industry vehicles to advance the current competitiveness agenda and push for deregulation. While the Antwerp Declaration was an industry-led initiative, the Clean Transition Dialogues were initiated by the European Commission President Von der Leyen, to provide a forum for industry voices.
The Commission presented the CID as a continuation of its European Green Deal (EGD), announced in 2020. But many environmental campaigners see the CID, and its narrow focus, as a product of industry’s backlash against the EGD. Both are true. As energy prices and inflation sky-rocketed following Russia’s invasion of Ukraine in February 2022, Europe’s heavy industry seized the opportunity. With one hand it attacked the “green” parts of the EGD that it didn’t like, such as protecting biodiversity or reducing chemicals pollution, claiming that they were too costly and burdensome. With the other hand it pushed for more political and financial support for its favoured net-zero “solutions”, such as gas, CCS, hydrogen and carbon markets, all of which were already at the core of the EGD.
The rationale behind both positions was a loss of competitiveness vis-a-vis the US and China (see Q.4). This position was immediately supported by right-wing politicians, who were keen to weaponise the erupting farmers’ protests and the rise of the far right to support their deregulatory cause. Many green measures were killed in the lead up to the European Parliament elections in June 2024, and the onslaught continues even now, as industrial competitiveness is prioritised.
The CID epitomises the EU’s new streamlined approach that favours industry competitiveness at the expense of health and the environment. The idea was already seeded in the chaos of 2022, and when the Commission introduced its Green Deal Industrial Plan in 2023, a year after the invasion of Ukraine, it claimed the package would enhance the “competitiveness of Europe’s net-zero industry” while “accelerating the transition to climate neutrality.” The Net Zero Industry Act, the Critical Raw Materials Act and the Reform of the Electricity Market Design were all part of the project and went on to form the backbone of the CID. A year later the Industrial Carbon Management Strategy was also released, focused on capturing and storing CO2 – a key demand of heavy industry and ultimately a core element in the CID. The seeds had already been sown, and the CID has provided industry with its much desired bumper harvest.
4. How does the CID fit into the EU’s broader competitiveness agenda?
The CID is part of a blinkered vision that puts competitiveness before all else, a vision fought for and won by heavy industry
The CID is a key part of a bigger picture. Since the summer of 2022, corporate lobby groups like the European Roundtable of Industry and BusinessEurope have pushed hard to have the EU institutions initiate a wave of deregulation, and to take steps to support sectors lagging behind companies from other parts of the world – the US and China in particular.
This campaign was given an extra boost in the spring of 2024, just before the European elections and the instillation of a new European Commission. Two reports were released, focusing on increasing Europe’s competitiveness: both reports had been commissioned by the European Commission; both reports were written by former Italian Prime Ministers (Enrico Letta and Mario Draghi respectively); both reports reinforced the demands of the Antwerp Declaration and the Clean Transition Dialogues. Draghi’s disclosure of stakeholder contributions showed the input he sought was heavily skewed in favour of corporate interests, with NGOs, trade unions and consumer and patient organisations representing a mere 5 per cent.
The reports provided the Commission with the intellectual and political backing needed to upscale its deregulatory plans while also boosting public subsidises to the very industries that had previously lobbied against climate action. The stage was therefore set for a Clean Industrial Deal that put the interests of heavy industry before the climate, before workers and before communities. A scheme that would pay the polluters, not make them pay.
The approach, championed by industry as well as Draghi and Letta, now underpins the EU’s economic strategy for the coming term: the Competitiveness Compass. This Compass sees any kind of regulation of business as an impediment to “competitiveness” that should be removed, labelling it an “administrative burden” or “red tape”. That’s why we are seeing a wave of new deregulatory “Omnibus laws”, which groups existing laws in order to open them up again, with the stated aim of reduce reporting requirements and weakening regulations. Deregulation on steroids, with disastrous consequences
5. How has the CID put industry in the driving seat?
The CID was designed by and for industry, with new mechanisms that ensure it will stay that way
The introduction of the CID explicitly states, “Our proposals are directly tailored to their needs”, referring to the fossil fuel-dependent industries that lobbied for the initiative. This should come as no surprise given that the Commission boasts that the CID is “the result of the active engagement of industry leaders… through the Antwerp Declaration for a European Industrial Deal and the Clean Transition Dialogues”. But the proposals are not just meeting industry’s needs, they are creating new channels for industry to influence policy and shape regulations, often side-stepping binding regulations in favour of voluntary schemes.
The CID also proposed a series of new initiatives on cars, steel and metals, chemicals, investment in sustainable transport (including hydrogen) and the bioeconomy. These will likely all follow the same approach of putting industry in the driving seat, and further deregulate important elements of the economy. For example, the Chemicals Industry Package, promised for late 2025, includes “targeted initiatives to enhance the sector’s competitiveness”. But nowhere does it mention the impacts on public health or environment, or goals to reduce worker and consumer exposure to harmful chemicals.
This blind pursuit of “competitiveness above-all-else” could be very damaging but should come as no surprise, given that proposals have been and will continue to be developed through constant, close collaboration with the very industries the Commission is supposed to be regulating. And these same industries have a proven track record of lobbying against strong regulations that protect workers and the environment. For example, the car industry has spent decades weakening emissions standards, while the EU experiences more than 250,000 premature deaths each year from car-induced air pollution.
But putting industry in the driving seat has been a feature of EU regulation for decades. More recently, in 2021, the Commission created the Carbon Capture Utilisation and Storage (CCUS) Forum, which became the Industrial Carbon Management (ICM) Forum in 2024. Its industry-led working groups helped draft parts of the EU’s subsequent Industrial Carbon Management Strategy, promoting an array of measures designed to massively scale up CCUS and CO2 transport infrastructure. The CID aims to implement much of that strategy. But what’s changed is that now industry is getting a say on all EU regulations across the entire economy, giving it a concentrated power that it has never previously enjoyed.
6. How has the CID confused the “public interest” with that of heavy industry?
The CID wrongly assumes what is good for heavy industry is good for society, despite the negative impacts, risking a major backlash
Industry lobby groups represent the commercial interests of their members, while the EU has a legal obligation to regulate in the interest of Europe’s 450 million citizens. However, the CID appears to conflate the two, assuming that heavy industry’s interests reflect a broader public interest and can therefore be promoted and supported.
Take for instance the Industrial Decarbonisation Accelerator Act. Announced multiple times in the CID and expected before the end of 2025, this act will speed up the awarding of permits for “clean energy” infrastructure projects such as pipelines that transport gas, hydrogen or captured CO2, or new lithium mines. One way it will do this will be to “significantly simplify and shorten” environmental impact assessments (read: weaken), as they delay projects being built. And if a project is deemed to have an “overriding public interest”, these assessments may be bypassed altogether, even in the face of public opposition. This is something the gas lobby has been pushing for, but if introduced it could trample over the voices of local communities, leading to anti-climate sentiment and a potential strengthening of the far-right.
The CID also plans to provide huge public subsidies to polluting industries through new and existing funds, mainly to ‘de-risk’ private investments. This means that if the investment is a success, the profits are privatised; if it is a failure, then we – the public – bear the costs. The Commission claims industry and public interests are aligned, because we both want to see industry investments succeed. It argues that without public money, industry would not be able to invest. Yet research from Friends of the Earth Europe and SOMO shows this to be a lie. For decades, the biggest recipients of EU decarbonisation funds have channelled their money to shareholders via dividends rather than into decarbonisation. Between 2010 and 2023, Shell, a recipient of public funds for CCUS, paid out 97% of its profits to investors. This is not a company in need of public handouts, and not one whose interests are aligned with those of the public.
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