On 16 April 2025, the European Commission opened a consultation process, calling for input to prepare its proposal of the upcoming Industrial Decarbonization Accelerator Act (the “Act”), which is a key part of the Clean Industrial Deal.  This initiative is designed to accelerate the decarbonization of Europe’s energy-intensive industries, such as steel, cement, and chemicals, while ensuring that these industries remain competitive on the global stage.

According to the Commission, the EU’s energy-intensive industries contribute significantly to its greenhouse gas emissions—about 19% of total emissions—and are vital to its economy, providing millions of jobs.  However, these industries face numerous challenges in their efforts to transition to cleaner production methods.  Among the primary obstacles are high energy costs, complex and slow permitting processes for decarbonization projects, and the high upfront costs of clean technologies.  Additionally, the demand for low-carbon products manufactured by these energy intensive industries is still limited, as these products often come at a higher price than their conventional counterparts.

To address these issues, the Commission is considering measures aligned with the following objectives, which could be included in the upcoming Act:

  • First, streamline and accelerate the permitting process for industrial decarbonization projects, particularly those involving critical infrastructure like electricity grids and hydrogen pipelines.  This would help remove regulatory bottlenecks that currently slow down investment in clean technologies.
  • Second, identify and promote priority decarbonization projects.  These projects are seen as high-risk due to their substantial capital requirements and long-term timelines, and the Commission recognizes the importance of public intervention to de-risk these investments and ensure their success.  By supporting these projects, the EU aims to lay the groundwork for a more sustainable and resilient industrial base.
  • Third, measures to create and protect lead markets for low-carbon industrial products.  These measures may include introducing sustainability and resilience criteria, along with minimum EU content requirements in public and, in some cases, private procurement for strategic sectors.  Additionally, the Commission will consider promoting low-carbon industrial products through options such as an EU label for steel, incentivizing clean carbon feedstock adoption, and enhancing investment in innovative technologies to strengthen the European market.

The Commission is currently gathering feedback from a wide range of stakeholders—including EU member states, industry leaders, and environmental organizations— through a public consultation process, which is open until 8 July 2025.  This consultation is a critical step in shaping the future of the Act, which is expected to be proposed in Q4 2025.  Stakeholder feedback will directly inform the Commission, ensuring that the proposed policies are well-aligned with the practical realities of industries and their decarbonization needs.  While the consultation is focused on gathering insights, it is not just a passive input process; the Commission intends to incorporate relevant stakeholder suggestions into the legislative proposal.  This may include adjusting the scope, focus, and mechanisms of the Act based on the feedback received.

For companies in energy-intensive sectors, the consultation offers an important opportunity to influence policies that will directly affect their future competitiveness and sustainability.  Engaging in the consultation process will help ensure that the policies reflect the realities of these industries and that necessary support mechanisms, such as public funding, tax incentives, or market guarantees, are in place to facilitate a smoother transition.

Covington’s cross-practice team is closely following the development of Clean Industrial Deal and instruments that form part of a broader array of legislative initiatives and communications aimed at fostering decarbonization.  This includes the Industrial Action Plan for the European Automotive Sector and the draft Clean Industrial Deal State aid Framework.  Covington can assist energy-intensive businesses to navigate the risks and opportunities offered by these instruments for their future projects and investments in the EU or elsewhere.

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Photo of Matthieu Coget Matthieu Coget

Matthieu Coget counsels clients to develop and execute policy engagement strategies, to navigate through political risk, and to build and manage coalitions to accomplish their objectives at both the EU and Member State levels.

He also provides guidance on complex regulatory issues, particularly…

Matthieu Coget counsels clients to develop and execute policy engagement strategies, to navigate through political risk, and to build and manage coalitions to accomplish their objectives at both the EU and Member State levels.

He also provides guidance on complex regulatory issues, particularly in EU trade, energy, and food law. He frequently advises on the evolving regulatory developments in EU industrial policies.

Matthieu’s practice primarily services clients in the food and beverage, automotive, energy, and technology sectors.

He also maintains an active pro bono practice, addressing EU regulatory matters and supporting policy engagement initiatives.

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Photo of Carole Maczkovics Carole Maczkovics

Carole Maczkovics is a market leader in State aid law, with a robust background in the economic regulation of network industries (energy and transport) and in public contracting (EU subsidies, public procurement, concessions).

Carole has a proven track record of advising public and…

Carole Maczkovics is a market leader in State aid law, with a robust background in the economic regulation of network industries (energy and transport) and in public contracting (EU subsidies, public procurement, concessions).

Carole has a proven track record of advising public and private entities in administrative and judicial proceedings on complex State aid and regulatory matters before the European Commission as well as before the Belgian and European courts. She also advises clients on the application of the EU Foreign Subsidy Regulation (FSR) and UK subsidy control regime.

Carole has published many articles on State aid law and on the FSR, and contributes to conferences and seminars on a regular basis. She is a visiting lecturer at King’s College London on the FSR and at the Brussels School of Competition on the application of regulation and competition law (including State aid) in the railway sector. Carole gives trainings on State aid law at EFE, in Paris. She also acts as Academic Director of the European State aid Law Institute (EStALI).

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