How the EU’s Clean Industrial Deal Will Shape Corporate Decarbonization

Announced on February 26, 2025, the Clean Industrial Deal (CID) is the EU’s latest initiative to advance sustainability goals while strengthening industrial competitiveness. Working alongside the EU Green Deal and the EU Emissions Trading System (EU ETS), the CID is a cornerstone of Europe’s political, environmental, and economic strategy. 

Wondering what the deal means for your business and how to take advantage of the new incentives? Here’s what you need to know, and how to stay ahead.  

At its core, the Clean Industrial Deal turns the challenges of decarbonization into a competitive advantage for European businesses. It outlines how investments in sustainability can be a driver for economic growth. 

It focuses primarily on two closely linked sectors: energy-intensive industries and clean tech. On both fronts, it has a few key objectives:  

• Affordable energy: The new Affordable Energy Action Plan introduces measures to cut energy costs for businesses and consumers. 

• Boost demand for clean products: The Industrial Decarbonization Accelerator Act will promote EU-made clean industrial products like cement. 

• Financing the energy transition: The deal outlines a plan for €100 billion to support EU-made clean manufacturing and innovation. 

• Circularity and access to materials: The Circular Economy Act (2026) aims for 24% circular materials by 2030 to reduce resource dependency. 

• Acting on a global scale: New trade initiatives will diversify supply chains and make sure the EU is economically secure and resilient.  

• Developing the workforce: The CID commits to widespread investments in workers, skills, and jobs related to the energy transition.  

The CID also supports the Net Zero Industry Act and Critical Raw Materials Act, ensuring a resilient, low-carbon supply chain. 

The Clean Industrial Deal raises the bar for corporate decarbonization, but it also creates significant financial incentives and regulatory support for achieving Net Zero goals. You may see some of the following effects on your business:  

Increased pressure to decarbonize 

The CID will introduce stricter carbon reduction targets and reporting requirements. It’ll also introduce tighter regulations on emissions and supply chain sustainability.  

You’ll need to ensure your value chain is compliant with these new regulations. Expect to assess your raw material sourcing, production processes, and energy consumption.  

Incentives for sustainable investments 

While the CID increases pressure to decarbonize, there are more incentives and investment opportunities to make it possible. Companies will have access to new EU funding and support for renewable energy, carbon capture, and hydrogen projects.  

Additionally, The Innovation Fund (fueled by EU ETS revenue) will support breakthrough clean tech projects. It’ll be easier for you to access these projects through low-cost financing and grants. 

New compliance and market challenges 

If you import into the EU, the expansion of the Carbon Border Adjustment Mechanism (CBAM) means you’ll need to comply with new carbon pricing regulations.  

How to take advantage of these changes 

To stay competitive, companies must proactively stay ahead of evolving regulations. The CID is an opportunity to make sure your entire value chain aligns with EU sustainability goals and integrate ESG initiatives into your business strategy.  

Align your decarbonization strategies with EU policies 

You may have existing decarbonization goals, but the CID is an opportunity to review them and make sure they’re aligned with EU targets. You can also look to integrate renewable energy procurement, carbon reduction strategies, and circular economy principles into your operations.  

Leverage EU incentives to invest in clean energy 

The European Union wants to lead the market for innovative clean products and digitalization. To do this, they’re providing incentives for investing in clean energy like hydrogen, battery storage, and renewable energy adoption. Starting early means you can gain a competitive advantage when it comes to accessing these incentives.  

Partner with experts to simplify the transition 

Navigating the CID and sustainability projects is an enormous undertaking. You may want to consider partnering with experts along your value chain to help make sure you stay compliant while you optimize your investments.