EU introduces new regulation to boost decarbonization, energy efficiency and clean tech production
The European Commission has introduced a new regulation called the Clean Industrial Deal State Aid Framework (CISAF) to help member states accelerate their transition to clean energy, industrial decarbonization and clean technology with the scope of the Clean Industrial Deal.
Accordingly, CISAF defines how member states can provide public support for clean industry investments under EU state aid rules. It enables the rapid implementation of national aid programs introduced by member states. The framework will apply until December 31, 2030, and will also offer long-term stability for governments and businesses.
There are five key focus areas of CISAF. One of them is offering simplified procedures to fast-track support for projects such as wind and solar power, and green/blue hydrogen with the aim of helping hard-to-abate industries in achieving the decarbonization goals of the Clean Industrial Deal.
Moreover, member states will now offer electricity cost support for companies that operate in industries exposed to global competition and rely heavily on electricity, allowing the reduction of the electricity costs of energy-intensive users that face higher costs than competitors in regions with less ambitious climate policies. In exchange, recipient companies will be required to invest in decarbonization efforts.
Furthermore, CISAF will offer flexible funding options for a broad range of decarbonization or energy efficiency technologies, including electrification, hydrogen, biomass, and carbon capture, utilization and storage (CCUS).
The framework will also provide public support for the investments in the production of clean technologies covered by the Net-Zero Industry Act. Aid will be provided on an individual basis when needed to avoid such investments from moving outside the EU. It will provide support for the investments in the production and processing of critical raw materials necessary for clean technologies. Additionally, the framework will encourage demand for clean technologies by offering tax incentives, such as accelerated tax deductions, to companies that invest in clean technologies.
Ultimately, CISAF will allow member states to reduce the financial risks of private investments by offering equity, loans, or guarantees, specifically for initiatives in energy infrastructure, the circular economy, and other clean industry areas.
EUROFER: European steel industry and manufacturing at existential risk
The latest developments in the steel sector and across critical value chains are worrying signs of a steady deterioration, endangering the survival and the transition of steelmakers and their key manufacturing customers in Europe, such as automotive. A Clean Industrial Deal including swift and radical measures in EU industrial, energy and trade policies, is the last chance to ensure Europe’s prosperity and shield European industry from cheap imports driven by third countries’ unfair trade practices, overcapacity and lower climate ambition, urges the European Steel Association.
“The risk of de-industrialisation in Europe has never been more evident than today. The latest news coming from Germany and Eastern and Central Europe are only the tip of the iceberg we have been warning about since a decade, and which is now impacting not only steel but also key value chains such as automotive and wind. The situation is explosive; both industry and decarbonisation are at risk”, said Axel Eggert, Director General of the European Steel Association (EUROFER). “Either we get a robust Clean Industrial Deal, or Europe will inevitably become an industrial museum powered by Chinese and American clean technologies”, he warned, adding that: “The key requirements for the EU steel industry to remain in Europe are, firstly, immediate and comprehensive trade action stopping unfair trade practices and global overcapacity being offloaded onto, and destroying, the EU steel market. Secondly, a waterproof Carbon Border Adjustment Mechanism (CBAM) that will not allow steel imports from countries that circumvent climate protection by exporting to the EU from a few ‘clean’ installations and selling their dirty steel in their domestic and non-EU markets. Furthermore, we need affordable clean energy and lead markets for EU-made green products to support the transition”.
“The European steel sector is a litmus test for the entire EU industry’s health. We rang the alarm bell several years ago. Now the symptoms of deindustrialisation have spread to the value chain. We need, as Mario Draghi said, radical change in EU policies to reboot our competitiveness. This is the last train for Europe’s decarbonisation and prosperity”, concluded Mr. Eggert.
EUROFER Press release – EU steel industry at existential risk
