The European Commission has launched a public consultation to allow all interested parties to provide feedback on its proposal for the State Aid Framework in support of the Clean Industry Pact (CISAF). This new framework aims to accelerate decarbonization and the development of clean technologies in the European Union, providing member states with a clear system for granting financial aid to strategic projects without distorting competition in the single market.
A Key Step for Sustainable Industrial Transition
The Clean Industry Pact, announced on February 26, 2025, sets out a roadmap to strengthen European competitiveness and achieve decarbonization in the industrial sector. As part of this plan, the Commission has proposed CISAF, which will replace the current Temporary Crisis and Transition Framework (TCTF) and remain in effect until December 31, 2030.
The new framework offers greater predictability for businesses and enables member states to plan more effective incentives. Additionally, it introduces more streamlined processes for the allocation of aid, such as the requirement to use standardized bidding procedures and specific impact assessment mechanisms.
The Commission has recognized the urgency of establishing more agile and ambitious mechanisms to compete with international initiatives such as massive subsidies from third countries, particularly the U.S. Inflation Reduction Act (IRA) and China’s aggressive industrial policies supporting renewable energies. Without a solid aid framework, Europe risks losing competitiveness in the development of clean technologies.
Main Areas of Support in CISAF
CISAF sets clear criteria on how member states can structure their state aid to support clean industry. The main areas of focus include:
- Boosting Renewable Energy: Bidding procedures for solar, wind, energy storage, and renewable hydrogen projects will be streamlined. Member states will be allowed to establish specific aid schemes and grant direct support to less mature technologies while ensuring project completion within set timelines.
- Industrial Decarbonization: Investments in emission-reducing technologies, carbon capture and storage (CCS/CCU), and renewable hydrogen will be encouraged, with emission limits set for accessing aid.
- Clean Technology Manufacturing Capacity: The production of batteries, solar panels, wind turbines, electrolyzers, and carbon capture and storage equipment, as well as essential components and raw materials, will be incentivized. Projects in assisted regions or those needed to counteract third-country subsidies may receive higher aid levels.
- Reducing Risk in Private Investments: Aid will be activated to mitigate risks associated with financing energy infrastructure, industrial decarbonization, and clean technology manufacturing, promoting private co-financing and applying fiscal incentives under strict competition criteria.
The consultation also addresses technical aspects such as the appropriateness of project timelines, the classification of priority technologies, and the balance between public and private investment. Furthermore, it opens the debate on whether the list of eligible technologies should align with other European regulations, such as the Net Zero Industry Act.
While these measures provide significant support for the ecological transition, there are also concerns about their real scope and long-term impact. Will this support be enough to prevent clean technology investments from moving outside of Europe, or will a more ambitious and coordinated approach be necessary?
A Balance Between Sustainability and Competitiveness
One critical aspect of CISAF is how it will ensure that state aid not only drives decarbonization but also strengthens European industry competitiveness. In a context where economic giants like the United States and China are allocating billions of euros to the green industry with local production criteria, Europe faces the challenge of designing a framework that encourages investment without making aid a bureaucratic obstacle or insufficient to retain strategic projects.
Another point of debate is the impact of regulation on private investment. Is enough being done to attract private capital to the energy transition, or will excessive requirements end up discouraging investment in certain sectors? The public consultation is an opportunity for the industry and other stakeholders to express their concerns and push for a more flexible and competitive approach.
Consultation open until April 25
The European Commission invites all interested parties — businesses, industry associations, governments, and citizens — to submit their comments on CISAF before April 25, 2025.
To access the full document and submit your feedback: here.
