EU Clean Industrial Deal: 1% of Subsidies for Clean-up

Only 1% of the €61 billion in state aid approved under the Clean Industrial Deal State Aid Framework (CISAF) has been directed towards the actual cleaning up of industrial processes. This finding, from a recent Euractiv analysis, raises significant questions about the effectiveness of current public funding allocations in achieving industrial decarbonisation goals and promoting clean energy transitions across the EU.

The vast majority of the €61 billion in subsidies, intended to support clean industrial initiatives, appears to have bypassed direct investment in cleaner production methods. Industries classified as hard-to-abate sectors, such as cement, steel, glass, and ammonia, rely on inherent high-temperature processes that make deep decarbonisation technically challenging. Projects like PARADISE are actively evaluating and demonstrating advanced technologies like carbon capture, utilisation, and storage (CCUS) and alternative carbon-neutral fuels as essential pathways to reach net-zero targets by 2050 in the EU.

Achieving the European Green Deal's climate-neutrality target by 2050 necessitates deep cuts to emissions across all economic sectors. Hydrogen, as a clean energy carrier, is positioned to play a crucial role, capable of coupling power, heat, transport, and industry sectors. The CLEANER project, for instance, focuses on clean heat and power from hydrogen, highlighting its potential for long-term storage and low-emission production and use. Furthermore, initiatives like SET-IndEU aim to strengthen energy efficiency in industry, supporting the monitoring and revision of action plans to make EU industry less energy, resource, and emissions intensive.

The disproportionate allocation of state aid, with minimal direct investment in process clean-up, suggests a potential disconnect between the stated objectives of the Clean Industrial Deal and its practical implementation through public funding. While broader energy transition efforts are vital, the limited focus on fundamental industrial process decarbonisation could hinder the EU's ability to meet its ambitious climate targets.

What this means: Public funding strategies under frameworks like CISAF may require re-evaluation to ensure a more direct and impactful allocation of resources towards the core challenge of cleaning up industrial processes, thereby accelerating genuine industrial decarbonisation and clean energy transitions.