The Impact on Dealmakers of The Commission’s Clean Industrial Deal: Boosting Growth With Re-Industrialisation of The EU Economy

• The Clean Industrial Deal strategy confirms a more geostrategic approach by the Commission, using its enforcement levers to protect and grow EU industry while accelerating decarbonisation and promoting the clean tech sector.
• Merger guidelines will be revised to ensure that both the impact of mergers on clean innovation and the investment intensity of competition in certain strategic sectors are better integrated in the competition analysis.
• Foreign subsidy controls and trade instruments will be used to prevent distortions in EU markets from extra-EU cost advantages (such as low energy costs) or over-supply (including because of tariffs restricting access to non-EU markets).
• The EU expects to make available up to EUR 100 billion to ensure investments in innovation and technology through the creation of an Industrial Decarbonisation Bank.
• EU Member States will be given further leeway under EU state aid rules to subsidise the roll-out of renewable energy, to green manufacturing processes and to ramp up production capacity in clean tech.

Introduction

On February 26, 2025, the European Commission (the “Commission”) unveiled its flagship initiative to enhance the competitiveness of European industries – the Clean Industrial Deal. The Commission’s new agenda is defined as Europe’s transformational business plan for a thriving new industrial ecosystem of growth and prosperity. It covers a wide range of measures and initiatives, including a number with potential impact on the antitrust treatment of agreements, transactions and funding.

State Aid rules

Clean Industrial State Aid framework

The Commission will give EU Member States further leeway under EU state aid rules to support renewable energy, to subsidise the greening of companies’ manufacturing processes (including steel, cement, textiles, chemicals and pharma) and to provide investment aid to ensure sufficient clean tech capacity in the EU (notably in relation to battery manufacturing, sustainable materials production and electric vehicles).

Simplified State Aid framework

These new aid measures will be included in a new simplified state aid framework to be adopted by June 2025, in particular to facilitate the roll out of innovative clean tech industrial investments and projects to accelerate decarbonisation and enhance economic security.

General Block Exemption Regulation (GBER) Review

To facilitate the roll-out of these support measures without prior approval by the European Commission, a safe harbour will be established for some of these measures in a new General Block Exemption Regulation

Important Projects of Common European Interest (IPCEIs)

The Commission will work with Member States to speed up the launch of new IPCEIs which facilitate large-scale state-backed investment across the EU in areas of strategic significance and priority.

Competition Policy – Antitrust

Guidance on Antitrust Compatibility

The Commission will provide informal guidance to companies on the antitrust compatibility of cooperation projects contributing to the achievement of EU priorities under the Clean Industrial Deal.

Merger guidelines – a new approach to competition policy

The Commission will update its guidelines for evaluating mergers to better incorporate the effects of the merger on the affordability of sustainable products, clean innovation, and the creation of efficiencies that yield sustainable benefits. Additionally, the revised guidelines will consider the impact on innovation, resilience, and the investment intensity of competition in specific strategic sectors.

Foreign Subsidies Regulation (“FSR”) Guidelines

The Commission will adopt Guidelines by January 2026 to clarify key concepts under the Foreign Subsidies Regulation, such as assessing the distortive effects of foreign subsidies. The Commission will also make use of FSR ex officio investigations in strategic sectors, and will offer guidance on the circumstances under which it may call in a below-threshold merger that poses a risk to the level playing field in the EU.

Trade Defence Instruments (TDIs)

The Commission will make fast, efficient, and systematic use of trade defence instruments (TDIs), such as anti-dumping or anti-subsidy duties, to protect EU industries from unfair competition and ensure that “the EU market does not serve as an export destination for state-induced excess global capacity”. The communication flags that the increase of trade protectionist measures around the globe may make the EU a target destination for global overcapacities

Resilience Requirements for Foreign Direct Investment

The Commission will explore, in consultation with industry stakeholders and Member States, how to ensure that foreign investments into the EU feed into the long-term competitiveness of EU industry. This might include resilience conditions such as preserving EU ownership of equipment, EU-sourced inputs, EU-based staff recruitment, joint ventures, or intellectual property transfers. The Commission clearly wishes to ensure that EU economic sovereignty is boosted, not diminished, by foreign investment.

Conclusion

The Commission’s Clean Industrial Deal sets out the steps it plans to take in the coming years to accelerate reindustrialisation and economic growth. It calls for a significant revision of EU state aid rules to enable the funding of decarbonisation and the development of European strategically important clean tech sectors. It also calls for further guidance and a change in the way the European Commission deals with mergers and antitrust, and foreign direct investment. It remains to be seen whether this will touch on the fundamental principles for assessing individual transactions. It appears very likely, however, that, as a minimum, this will impact the detailed assessment of and considerations weighed in relation to deals.

Dealmakers and investors active in clean energy and in decarbonising traditional industries should take due note – it is an invitation to invest in the EU. By contrast, suppliers into the EU from low cost countries may see stronger and potentially faster action being taken to level the EU’s internal market playing field.

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