What does the “Clean Industrial Deal” mean for State aid, foreign subsidies and antitrust law?

On Wednesday, 26 February 2025, the European Commission (“Commission”) published its Communication “The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation” (“Clean Industrial Deal”). A key contribution to the development of the Clean Industrial Deal came from Mario Draghi’s report on EU competitiveness (“Draghi Report”).

Envisioned as a “business plan” for Europe, the Clean Industrial Deal aims to achieve the Green Deal’s objectives (EU climate neutrality by 2050) while simultaneously boosting European competitiveness. The Clean Industrial Deal focuses on several key areas: reducing bureaucracy, promoting investments and ensuring access to a cost-effective, sustainable and secure supply of energy and raw materials. In addition, the decarbonisation of European industry is to be driven forward. The Clean Industrial Deal together with the Competitiveness Compass (read more on Noerr Insights) will guide the Commission’s strategy for ensuring the EU’s competitiveness over the next five years.

This article provides an overview of the main practical implications of the Clean Industrial Deal from the perspective of EU State aid law, including the Foreign Subsidies Regulation (EU) 2022/2560 (“FSR”), and antitrust law.

The business drivers highlighted in the Clean Industrial Deal

In the Clean Industrial Deal, the Commission identifies business drivers to promote the EU’s competitiveness while achieving the Green Deal’s objectives. Below, we present the most important aspects from the perspective of EU State aid, foreign subsidies and antitrust law:

1. Access to affordable energy

Affordable energy is essential for the competitiveness of European industry, especially in energy-intensive sectors. Access to it is therefore an important cornerstone of the Clean Industrial Deal. The Commission regards dependence on fossil fuels and structural inefficiencies in the electricity system, including insufficient grid infrastructure and energy system integration, as the main reasons for high energy prices in the EU.

To counteract this, the Commission adopted the Action Plan for Affordable Energy (“Action Plan”) on Wednesday, 26 February 2025 as a first step in accordance with the Clean Industrial Deal. The Action Plan aims to reduce energy prices in the EU, leveraging EU State aid law as a key mechanism. On Tuesday, 11 March 2025, the Commission published the draft of a “Framework for State Aid measures to support the Clean Industrial Deal” (“Clean Industrial Deal State Aid Framework”). A public consultation on the draft will run until 25 April 2025 and the Clean Industrial Deal State Aid Framework is expected to be adopted in the second quarter of 2025. It will simplify regulations to promote investment in renewable energy expansion, industry decarbonisation and clean technology production. The Commission also urges Member States to use EU State aid law to incentivise industry to reduce gas and renewable energy prices.

In addition, the Industrial Decarbonisation Accelerator Act, planned for late 2025, will support particularly energy-intensive industries by accelerating authorisation procedures and implementing other measures.

2. Mobilisation of public and private capital

The clean transformation of the economy requires high levels of investment. The Commission estimates that annual investment in energy, industry and transport systems must increase by approximately EUR 480 billion compared to the previous decade. To achieve this, the mobilisation of public and private capital with appropriate incentives is crucial.

The Clean Industrial Deal State Aid Framework will play a central role in financing the clean transformation. Far-reaching aid will be made possible in the four areas of renewable energy, decarbonisation of industry, production capacities for clean technologies and private investment in the clean energy sector.

Simplified regulations (such as the simplification of the proof of compatibility with the internal market) will enable faster approval of subsidies for decarbonisation and clean technologies. Another goal is to ensure a stable and cost-effective electricity supply, despite the fluctuating output of renewable energies. Aid for non-fossil measures to make the energy system more flexible and for capacity mechanisms to secure the energy supply is to be facilitated. The technology products whose clean production is to be supported include, for example, batteries.

In order to further accelerate and simplify procedures, the Commission has announced a revision of the General Block Exemption Regulation. The aim of the revision is to reduce bureaucratic hurdles for companies and Member States while providing targeted industry support. The Commission will also evaluate the extent to which better incentives for investing in further training, reskilling, and labour recruitment can be offered.

The Guarantee Notice will also be scrutinised. The aim is to make the granting of state guarantees as a type of aid more attractive for Member States. At the same time, the Commission wants to work closely with the Member States to draft new Important Projects of Common European Interest (IPCEIs) in order to pave the way for further IPCEIs.

In addition to EU State aid law, antitrust law will also play a major role in financing the clean transformation of the economy. The Commission will adapt the guidelines for assessing mergers. In future, the competitive analysis of mergers will take greater account of their impact on the affordability of sustainable products, clean innovation, resilience and the investment intensity of competition in certain strategic sectors.

Finally, the Commission stands ready to provide an informal consultation on the antitrust assessment of cooperation projects that contribute to the achievement of EU priorities, in particular those related to innovation, decarbonisation and economic security.

3. Ensuring fair competitive conditions in the European internal market by controlling foreign subsidies

Global partnerships are also crucial for the EU to realise its clean industry goals. The Commission aims to ensure that foreign investment in the EU promotes industry, but does not harm it. The FSR, which has been in force since 12 January 2023, plays a key role in this. It enables the Commission to control subsidies from non-EU countries to companies operating in the EU. To create a level playing field, distortions of competition in the European single market that result from such foreign subsidies are to be prevented. This is because foreign subsidies naturally fall under the control of EU State aid law. The FSR thus complements other EU regulations on State aid, merger control, public procurement and foreign trade law (more about the FSR in Noerr Insights).

Both the Draghi Report and the Mission Letter to the new Competition Commissioner Teresa Ribera emphasise the need to consistently implement the FSR to support future European competitiveness. This requirement has now also been enshrined in the Clean Industrial Deal. The Commission’s guidelines on the FSR, scheduled for January 2026, will therefore point the way for the further application of FSR instruments. These are intended to provide clarity on certain substantive issues: the criteria for determining a distortion of competition in the EU internal market, the balancing test and the circumstances in which the Commission will examine M&A transactions not subject to notification under the ex-officio instrument. A public consultation on the planned guidelines will run until 2 April 2025. It is already clear from the Clean Industrial Deal that the Commission wishes to carry out ex-officio investigations in strategically important sectors.

The Clean Industrial Deal as a catalyst for EU competitiveness?

The Commission’s Clean Industrial Deal represents an ambitious plan for the EU’s future. However, the effectiveness of the measures presented in reducing bureaucracy, as announced, remains to be seen. The Member States will play a crucial role, in particular whether they are willing to contribute to reducing the burden on companies through national regulations and procedures, such as new subsidies, will be a key factor.

Regardless of potential challenges, the Clean Industrial Deal establishes a framework for investment, promoting competitiveness and facilitating the clean transformation of industry. This presents valuable opportunities for companies. Those which closely monitor these developments can strategically align their corporate objectives, thereby securing their long-term competitiveness.

If you have any questions, Noerr’s teams of experienced experts in State aid & FSR matters as well as antitrust, competition and merger control law will be happy to assist you. You can also subscribe here to receive all our news alerts or click here to access our new FSR-Checker to find out if a notification is required for your M&A transactions.