Cleantech for Europe‘s Policy Update
July 9, 2025
Welcome to the summer edition of our latest edition of Cleantech for Europe’s Policy Update, your one-stop-shop for EU cleantech policy news and analysis.
On June 27, cleantech and industry leaders, including our Executive Director Jules Besnainou, met with European Commission Executive Vice-President @Teresa Ribera[JB1] [DC2] and EIB President @Nadia Calviño to celebrate new support measures for clean technologies, including State Aid announcements and the EIB’s TechEU Guarantees.
Despite global market growth and opportunities from US sectoral retreats, Europe’s cleantech industry remains at a perilous juncture due to fragmented markets, unclear regulation, and insufficient demand-side support, leading to stalled investments and cancelled projects. Participants agreed on the need for stronger demand-based mechanisms (such as ETS, CBAM, output-based schemes, lead markets, and EU procurement preferences), more de-risking tools (notably scaling EIB guarantees), and mobilizing greater institutional capital through initiatives like the European Tech Champions Initiative and targeted prudential reforms to build a robust Made in Europe cleantech industry.
On 25 June, the European Commission unveiled the Clean Industrial State Aid Framework (CISAF), a long-awaited step to support EU cleantech manufacturing in the face of rising global competition. The proposal creates a number of opportunities for member states to increase their support to clean technologies, while excluding production-based support.
Main takeaways:
🔋CISAF enables Member States to deploy loans and guarantees more easily to cleantech projects—including potential support for advanced payments and PPAs, pending confirmation. It introduces mechanisms to co-finance Innovation Fund projects and “near-misses”, helping promising scale-ups gain traction faster.
🔋The revised framework also reflects cleantech investment realities by adjusting flexibility support duration, notably for LDES projects with higher upfront costs. It further strengthens blended finance by making it easier to combine equity and debt in vehicles attractive to institutional investors.
🔋 Crucially, CISAF shifts aid limits from the company to project level—allowing Member States to back multiple projects by the same firm—and introduces new tools for supporting scale-ups with equity and quasi-equity.
🪫 However, the absence of production-based incentives—similar to the US Inflation Reduction Act—marks a missed opportunity. Unlike equity, which carries loss risks for taxpayers, production-based support rewards actual performance and gives stronger signals to private capital.
Looking ahead, Cleantech for Europe calls for a true European industrial policy, aligned across procurement, competition, and trade, to make Europe a global leader in clean technology manufacturing. More than ever, incoming discussions on the EU Budget will be critical to implement output-based aid at the EU level.
🔗 Read more: Clean Industrial State Aid Framework (CISAF) Communication
On 20 June, the @European Investment Bank (EIB) formally approved its new CleantechEU Guarantee Scheme, part of the first wave of announcements under its new TechEU program. This is a tool Cleantech for Europe and its coalition members have championed.
💡 When selling innovative clean industrial equipment, cleantech companies are often asked to post bank guarantees—tying up capital that could otherwise go into scaling manufacturing. This new facility offers €250 million worth of counter-guarantees to commercial banks, easing collateral requirements and unlocking working capital.
✅ Frees up capital otherwise locked in bank guarantees
✅ Brings in commercial banks alongside public lenders
✅ Fiscally efficient—leverages the public balance sheet for de-risking
✅ Unlocks private capital for growth
Unlike incumbents, cleantech scale-ups don’t have large balance sheets or banking relationships. This facility is tailor-made for Europe’s next generation of industrial leaders—building battery gigafactories, electrolyser lines, long-duration energy storage, and more.
The EIB also launched:
🔹 €500m PPA Counter-Guarantee Pilot – helping scale-ups and industrial players secure long-term clean electricity
🔹 €1.5bn Grid Manufacturing Guarantee – supporting production scale-up of grid infrastructure across Europe
🔹 A €1.5bn extension to the Wind Manufacturing Guarantee
Guarantees are essential to scaling clean technologies. In a highly constrained public budget environment, they are some of the most efficient tools for leveraging private capital.
🔗 Read more: Press Release: EIB Group increases 2025 financing ceiling to record €100 billion
We launched a new report last week in the European Parliament, hosted by MEP @Lídia Pereira. The report argues that as global trade fractures and China floods global markets with overcapacity, Europe must urgently scale cleantech manufacturing—or risk losing the economic, security, and political dividends of its early innovation lead.
Furthermore, it shows how Europe’s “invent here, scale elsewhere” model is faltering under pressure from non-market competition, undermining not only manufacturing but also innovation itself. It proposes a Clean Industrial Deal with three imperatives:
💡 Acknowledge reality
🚀 Accelerate action
⚙️ Integrate strategically
Featuring case studies on solar PV, electrolysers, EVs, and batteries, the report lays out a bold, actionable strategy to build clean value chains in Europe and safeguard the resilience and competitiveness we hoped to build as a “first mover” in the race to net-zero.
🔗 Check out our latest report: Scale or Fail: A Trade Strategy for Europe’s Clean Industry
The Commission’s consultation on the Industrial Decarbonisation Accelerator Act (IDAA) is open until 9 July. This initiative aims to support energy-intensive industries in their decarbonisation while remaining globally competitive. It marks a key opportunity to shape a stronger EU demand-side policy that prioritises Made in Europe, creates lead markets for cleantech, and embeds resilience and local content criteria in procurement. In a global race for industrial leadership, the IDAA must deliver clear, long-term signals to investors—especially SMEs—through output-based support and streamlined cooperation across the cleantech value chain.
The Danish Presidency of the Council of the European Union, which started on 1 July, is clear in its program about a focus on decarbonising industry, securing access to raw materials and affordable energy, and maintaining the EU’s climate commitments while strengthening competitiveness. Priorities include advancing the Clean Industrial Deal, starting negotiations on the Industrial Decarbonisation Accelerator Act, and preparing for Single Market legislative proposals post-2027. On energy, the Presidency aims to improve European energy independence and affordability through reinforced infrastructure, increased clean energy generation, and a flexible, integrated system, following up on the Commission’s Affordable Energy Action Plan with discussions on grid development, streamlined approvals, and investment frameworks.
After last April’s Iberian blackout, grids are a hot topic this summer. During June’s plenary, MEPs adopted proposals to modernise the EU’s electricity grid, strengthen its resilience, integrate more renewables, and simplify permitting processes to achieve the EU’s energy objectives. The adopted text calls for the implementation of the EU grid action plan and emphasises the need for major investments and infrastructure upgrades to expand both cross-border and national grid capacity. Meanwhile, Cleantech for Iberia also published their report “No Green Deal without a Grid Deal”. The message is clear: transforming passive infrastructures into dynamic and digital networks is crucial to reduce costs, speed up electrification, and unlock new investment opportunities.
EU co-legislators have swiftly agreed on the CBAM Omnibus, introducing targeted simplifications without weakening ambition. A new 50-tonnes annual threshold per importer will exempt 90% of companies—mostly SMEs—while still covering 99% of emissions in key sectors. Importers may now freely choose between actual emissions and stricter default values, based on the top 10 highest-emitting countries. Parliament also secured an exemption for electricity and hydrogen produced exclusively within an EU Member State’s Exclusive Economic Zone (e.g., offshore wind). With CBAM’s financial obligations starting in 2026, the Commission must now urgently finalise implementing regulations/rules to ensure legal clarity for importers and national authorities.
Three implementing acts under the Net-Zero Industry Act (NZIA) were published in the Official Journal on 18 June: 1) new non-price criteria for renewable energy auctions (sustainability, cybersecurity, responsible conduct), 2) a decision standardising the selection of strategic net-zero projects (e.g., solar, wind, heat pumps), and 3) a regulation listing net-zero technologies and key components to assess EU dependencies. All acts will enter into force 20 days after publication.
On 4 July, the European Commission awarded €852 million from the Innovation Fund to six EV battery cell projects in France, Germany, Sweden, and Poland, including Cleantech Scale-up Coalition member Verkor. These strategic investments aim to scale sustainable manufacturing, cut 91 million tonnes of CO₂ over 10 years, and create 56 GWh of EV battery cells per year. Funded through EU ETS revenues, this first dedicated Battery Call, which closed in April, supports the Clean Industrial Deal and strengthens Europe’s industrial resilience, competitiveness, and cleantech leadership. Grant agreements are expected in Q3 2025.
Ecosystem spotlight: Visiting strategic clean industry sites
This June, Cleantech for Europe visited two Germany-based members of our Cleantech Scale-up Coalition that illustrate how clean technologies are becoming central to Europe’s industrial resilience and security.
In Frankfurt, we joined @INERATEC to inaugurate Europe’s largest Power-to-Liquid plant. Synthetic fuels can help decarbonise aviation — but also strengthen Europe’s defence readiness by enabling decentralised, domestic fuel production from electricity and CO₂. Unlike fossil fuels, they reduce reliance on chokepoints and hostile suppliers. Scaling synthetic fuels is essential to align Europe’s energy transition with operational and industrial security.
In Aachen, we toured @CYLIB’s battery recycling and refining pilot plant — a glimpse of circular industry in action. Their patented hydrometallurgical process recovers seven critical raw materials from end-of-life batteries, including lithium and graphite, and delivers battery-grade purities. Most recyclers don’t recover these materials — or only downcycle them. As CRM security becomes a mainstream topic in the US, the EU must also recognise critical materials access as a defence priority.
Europe needs to rethink security not just in terms of weapons, but as a question of access — to materials, supply chains, talent, and technology. That means scaling dual-use cleantech here in Europe — fast.
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Cleantech for Italy organizes the first edition of the 𝗦𝘁𝗮𝘁𝗲𝘀-𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗼𝗳 𝗖𝗹𝗲𝗮𝗻𝘁𝗲𝗰𝗵 at the Italian Chamber of Deputies
On 26 June, @Cleantech for Italy organised the States-General of Cleantech, a strategic dialogue uniting key actors across sectors to strengthen Italy’s clean technology leadership, focusing on technology transfer, access to capital for scaling innovations, and strategies to boost domestic industrial demand. The event reaffirmed cleantech as an industrial priority vital for competitiveness, jobs, and security, highlighted the need for demand-driven innovation to enable adoption, and recognised Italy’s strengths in chemicals and energy as strategic assets. It also emphasised that Italian research excellence must better translate into market-ready solutions and called for faster, simplified, risk-sharing public-private capital instruments to support growth.
The @IEA’s World Energy Investment 2025 report forecasts global energy investment reaching USD 3.3 trillion (+2% vs. 2024), with USD 2.2 trillion directed toward clean energy—twice that for fossil fuels. Solar leads low-emissions power, with USD 450 billion expected in 2025. Nuclear investment surpasses USD 70 billion, while grid investment (USD 400B/year) struggles to keep pace with rising electricity demand. End-use electrification and efficiency investments, boosted by EVs and building retrofits, approach USD 800 billion. Oil investment is set to decline by 6%—the first drop since 2020—while gas, especially LNG, is growing. However, the IEA warns current investment levels remain insufficient to meet COP28 goals. China is the top energy investor; the EU plans to spend USD 390B on clean energy versus USD 32B on fossil fuels.
The @OECD’s “The State of Play of Industrial Subsidies as of 2023” paper shows industrial subsidies have hit their highest level since 2009—over USD 108 billion—driven by a sharp rise in support for solar, semiconductors, aluminium, shipbuilding, and steel. China-based firms receive far higher subsidies relative to revenue, notably through below-market borrowing, deepening global imbalances. This growing concentration of subsidies in key sectors and countries threatens fair competition and reinforces the urgency for Europe to strengthen its own industrial policy to protect and scale its cleantech ecosystem.
The @Institut Montaigne’s “Cleantech: reducing our strategic dependence on China” paper drawing inspiration from Japanese and Korean strategies, puts forward nine recommendations to make Europe a sovereign player in cleantech. China dominates many cleantech value chains, from the extraction of raw materials to the manufacturing of finished products. At the same time, the EU is aiming to cover 40% of its annual needs in net-zero technologies by 2030 through developing production on its own territory. However, it is still struggling to establish itself due to structural weaknesses: insufficient production capacity, an unsuitable regulatory framework and incomplete technological expertise.
