EC Unveils €100 Billion Worth Decarbonization Plan

The European Commission announced plans to make €100 billion available to support eco-friendly technology manufacturing. The move is a part of its Clean Industrial Deal (CID).

The €100 billion fund would be an addition to adopting a new state aid framework to accelerate the rollout of renewable energy, decarbonize industries, and ensure sufficient manufacturing capacity of clean tech. Other aims of the deal revolve around strengthening an innovation fund and the creation of an industrial decarbonization bank.

EC said it will also launch a dedicated call under its Horizon Europe initiative to stimulate research and innovation in these areas and amend regulations to support investments. Around €50 billion of the total funding will be used for the deployment of clean tech, clean mobility, and waste reduction.

EC president Ursula von der Leyen noted demand for clean products has slowed down and some investments had moved to other regions. “The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe,” she added.

The body also announced an action plan with short-term measures to lower energy costs, complete the Energy Union, attract investments, and be better prepared for potential energy crises. As a key component of the CID, this plan will not only bring relief to households facing high energy bills but also to industries that struggle with high production costs, with estimated overall savings of €45 billion in 2025, which will progressively increase until €130 billion in annual savings by 2030 and €260 billion by 2040. 

The plan will bring short-term relief to consumers and pave the way for the completion of the Energy Union by frontloading the benefits of more renewable energy, energy savings, deeper market integration, and better interconnections. Crucially, it proposes actions to tackle the structural challenges that are driving up energy costs in the EU, notably Europe's reliance on imported fossil fuels and lack of full integration of the electricity system.

By accelerating investments in clean energy and infrastructure, and by bringing transparency and fairness to gas markets, energy can be made more affordable. A further reduction of permitting times for renewables and energy infrastructure will also help lowering power production costs. Consumers already benefit from around €34 billion every year thanks to the EU's internal energy market. Further integration could raise such benefits up to €40-43 billion per year by 2030.