OPEN LETTER: A CLEAN INDUSTRIAL STATE AID FRAMEWORK (CISAF) TO DELIVER ON THE CLEAN INDUSTRIAL DEAL
May 6, 2025
To:
Executive Vice-President and Commissioner for a Clean, Just & Competitive Transition, Mrs. Ribera;
Cc:
European Commission President Ursula Von der Leyen; Executive Vice-President and Commissioner for Prosperity and Industrial Policy, Mr. Séjourné; and Commissioner responsible for Climate, Net-Zero and Clean Growth, Mr. Hoekstra
Dear Executive Vice-President Ribera,
We, the undersigned organisations representing European cleantech start-ups, scaleups and investors from across Europe, are writing to express the urgent need for a revised EU State Aid framework that fully aligns with the objectives of the Clean Industrial Deal in a time of growing global competition to attract and scale-up the cleantech manufacturing industries of the future amidst growing economic uncertainty. Attracting these industries is vital for the long-term competitiveness and resilience of the EU and critical to ensure affordability and sustained societal support for climate policies.
The starting point for the CISAF should be to focus on what it would take to scale cleantech manufacturing in Europe on a level to be able to compete internationally. Depending on technology, that may require between several tens of millions and a few billion euros in capital expenditure per project. Through that prism, the current draft CISAF falls short of that mark.
While State Aid is only one of the many policy tools to foster cleantech manufacturing capacity in the EU, with the current EU budget nearly spent and the new EU budget not starting before 2028, up until then national support schemes are realistically the only additional pool of public funding at scale available in the near future to crowd in private capital. Looking beyond, the next EU budget must complement State Aid by delivering strong, coordinated European instruments to de-risk cleantech manufacturing that preserve a level playing field. Ensuring access to financing across all regions will help accelerate clean investment and deliver a more resilient clean transition across Europe.
The CISAF proposal seems focussed on limiting distortion in the EU Single Market between Member States. But it seems to miss the point that competition for cleantech manufacturing is global rather than between EU Member States, with the EU’s competitors not concerned by the amount and intensity of aid distorting competition. It also maintains a project-by-project approach, limited to upfront capital expenditure, with lengthy decision-making processes, a lack of clarity and visibility and very complex cumulation rules with EU funding instruments that results in a lengthy process – time that smaller companies do not have. As a result, mostly large companies with sufficient resources and ample existing funding can afford to navigate the State Aid rules while waiting for public support.
Uncertain times require fast and bold actions and a ‘whatever it takes’ mindset to ensure the EU scale-ups its cleantech manufacturing capacity. Therefore, we call on the Commission to include in the CISAF draft the possibility for Member States to design transparent, predictable, ex-ante production-based schemes for cleantech manufacturing – such as the booster for battery manufacturing in the Automotive Sector Action Plan – targeted at supporting specific cleantech manufacturing.
Upfront production support provides predictability for companies, lowers the marginal cost of production versus international competitors, and can be more easily factored into business case decisions, both by companies and financiers. It can be simpler to design and administer for smaller companies and smaller Member States. Finally, it offers Member States a more straightforward way than ad hoc project-based support to tie aid to specific sustainability, resilience, and European content criteria. Such criteria, coordinated at EU level where appropriate, can help ensure that public support strengthens Europe’s clean industrial base while maintaining open, fair competition within the Single Market.
These schemes could be time limited and gradually degressive to limit its distortive effect and mitigate the risk of misallocation of public funding, while enabling the ramping up of production at scale rapidly. Moreover, cleantech manufacturing tends to generate positive spillover effects across downstream and upstream value chains across Member States. Such schemes could also be managed via a coordinated approach between Member States through the Competitiveness Coordination Tool or through clear incentives to deploy national funding through European mechanisms, such as the Hydrogen Bank auctions, Invest EU national compartments or the future Industrial Decarbonisation Bank.
Additionally, we call on the European Commission to ensure that CISAF acts as a strong enabler of the EU’s net-zero, energy resilience, and technology sovereignty objectives. Aligning EU funding rules strictly with these goals is vital to build certainty, risk appetite, and investment in Europe’s cleantech sector. Member States should also be mandated – where appropriate – to apply resilience criteria in their national support schemes as set out in the Net Zero Industry Act and mechanisms like the second European Hydrogen Bank auction and the Industrial Decarbonisation Bank’s pilot auction.
Finally, a very significant enhancement is the recognition of loans and guarantees as public support schemes that can have a significant de-risking effect for companies and financiers. Our recommendation would be to expand the scope of guarantees from loans guarantees to explicitly cover manufacturing guarantees, technology performance guarantees and guarantees for power purchase agreements, as well as in very specific cases some minimum off-take guarantees. It is interesting to see the idea of blended finance investment vehicles also being included, although we believe the draft rules are likely to make these vehicles unappealing to institutional investors.
We provided further detailed feedback on the CISAF in the Annex.
The geopolitical and economic uncertainty of 2024 that have spilled over in 2025 saw a slowdown in the volume of cleantech investments in the EU. So, the urgent need for decisive and bold actions cannot be understated. We have European successes, proving the EU is able to scale up the new industries of tomorrow. But we need many more. At stake is nothing less than the future prosperity of European citizens. We stand ready to partner with you in delivering this ambitious plan for Europe.
Your sincerely,
