On 29 January, as part of the Clean Industrial Deal, the Commission is due to present an initiative aimed at helping energy-intensive industries to continue the decarbonisation process while at the same time preserving their international competitiveness. The initiative, which is expected to take the form of a regulatory proposal, seeks to boost industrial competitiveness and productivity, speed up administrative procedures and facilitate investment, notably through the creation of lead markets for decarbonised products.

These industries account for 19% of the EU’s greenhouse gas emissions, employ 7.8 million people and generate €549 billion in value added.

According to the Commission, the competitiveness of these sectors is undermined by a number of factors: higher energy costs than in third countries, weakening demand in some major downstream sectors (for example automotive and construction), and non-market overcapacities driven by export-oriented growth strategies and state-subsidised production in third countries.

To address this situation, the initiative aims to tackle the following problems:

(i) The lengthy permitting procedures for decarbonisation projects.

(ii) Technologies to decarbonise energy-intensive industries are not yet cost-competitive due to high capital and operating costs, very long payback periods and, in many cases, a lack of large-scale deployment.

(iii) Insufficient demand for clean industrial products at current prices compared with their conventional alternatives.

The initiative will focus on energy-intensive industries (i.e. chemicals, steel, pulp and paper, refineries, cement, non-ferrous metals, glass and ceramics) and, where appropriate, will take downstream related industries into account within a value-chain approach.

The objectives of this initiative are to:

(i) Accelerate permitting procedures for industry’s access to energy and for industrial decarbonisation, while at the same time ensuring high environmental standards.

(ii) Identify and promote priority projects and hubs.

(iii) Create and protect European lead markets for low-carbon products.

Strengthening the EU Emissions Trading System (EU ETS) will, in the Commission’s view, improve economic viability over time.

This proposal is expected to contribute to the introduction of clean, resilience, circularity and cybersecurity criteria in order to stimulate demand for clean products manufactured in the EU and to ensure clean European supply for energy-intensive sectors.

Our team remains at your disposal for further information.