The Ultimate Game Changer: Discover the Massive State Aid and Tax Breaks Hidden in the EU Deal!
The European Commission will propose a package of measures next week to help EU industries remain competitive while reducing their carbon footprint, according to a draft released on Tuesday.
European manufacturing is struggling due to low demand, cheaper Chinese rivals, and the possibility of additional damage from US President Donald Trump’s proposed tariffs on steel and aluminium imports.
Here are some of the key elements of a leaked draft of the EU’s ‘Clean Industrial Deal’, which aims to revitalise Europe’s struggling domestic industries.
ENERGY PRICES
European industries face energy prices that are up to three times higher than those of their American competitors, and Brussels is under pressure to address this in order to help local businesses compete.
The draft EU document outlined plans for a European Investment Bank scheme to be launched by the end of March, which would provide guarantees for smaller companies to sign power purchase agreements, allowing them to lock in supplies from renewable electricity generators at predictable prices.
The EIB would also help manufacturers of power grid components upgrade Europe’s ageing energy networks.
An EU legislative proposal for the fourth quarter of the year would provide energy-intensive industries with fast-tracked permits, boosting investment in clean industrial projects.
According to the draft, Brussels will recommend that the EU’s 27 member countries reduce electricity taxes to the legal minimum in order to reduce consumer bills in the short term.
The Commission also intends to soften the EU’s current gas storage filling targets, which the EU had planned to extend beyond 2025. This is in response to concerns raised by Germany and other countries that fixed deadlines for filling storage could raise gas prices.
STATE AID, PUBLIC PURCHASING
Businesses may find it easier to obtain state aid and other financial incentives for projects aimed at reducing carbon emissions under the EU’s proposed measures.
EU governments would be able to offer tax breaks for clean industrial investments, such as accelerated depreciation. This enables a company to write off a larger portion of the cost of an asset earlier.
These changes will be implemented by simpler EU state aid rules, which are expected to be published in July, according to the draft. The EU will also assist countries in using national state aid to combat energy price increases, which may include providing subsidies to protect consumers from high gas prices.
Despite the EU’s rapid expansion of renewable energy, gas still sets the power price for many EU consumers.
In 2026, EU public procurement rules will be updated to include buy-Europe criteria to increase demand for locally produced goods.
TRADE AND CO2 COSTS
According to the draft Clean Industry Deal, the EU will continue to use anti-dumping or anti-subsidy duties aggressively as industries continue to raise concerns about low-cost imports of electric cars and other clean technologies, particularly from China.
The bloc’s planned carbon border levy will also be revamped before it begins collecting fees on steel, cement, and other imports in 2026.
The EU intends to simplify the rules in order to reduce the administrative burden on the industry, potentially reducing the carbon border levy to only 20% of the companies covered by the scheme, which account for nearly all of the emissions involved.
The draft stated that the Commission will propose a funding scheme for industrial CO2-cutting projects using EU carbon market revenues, but did not specify how much money would be set aside.
