- December is a decisive moment for the von der Leyen II Commission. We will see a series of proposals intended to deliver on the vision that the Commission set out when taking office a year ago — to make Europe more competitive, secure and affordable through simplification, smarter regulation and accelerated decarbonisation. After a year of limited implementation of this agenda, December will be a litmus test of the Commission’s commitment to deliver on this vision.
- 10 December will be key, with the publication of both the Clean Industrial Deal (CID) implementation package and the European Grids Package — central to translating the EU’s competitiveness, affordability and decarbonisation objectives into reality.
- The CID package will include the launch of the Industrial Accelerator Act (IAA), the flagship proposal under the CID. It is intended to support and modernise Europe’s industrial base, by improving conditions for clean investment, creating lead markets for low-carbon products and helping industry manage global pressures through trade tools. This package will also include a proposal to strengthen the Carbon Border Adjustment Mechanism (CBAM) will aim to address concerns around resource shuffling and the competitiveness of downstream sectors.
- The European Grids Package is expected to include measures which accelerate the modernisation and expansion of European grids, via streamlined permitting and planning, improving regional coordination and tackling bottlenecks. Europe needs a Grids Package with proposals that are bold, ambitious and enhance the resilience of the energy union. The Commission’s Grid Package should include targeted measures that help overcome grid congestion; enhance foresight and holistic planning; increase the flow of finance, and boost interconnection and regional cooperation.
Story
What do we need to see in the CID and grids packages to deliver a competitive, secure and affordable European future?
A moment to show progress
Nearly a year after the Commission set out the Clean Industrial Deal as the centrepiece of its competitiveness strategy, the gap between ambition and delivery is wide and becoming harder to ignore. Europe’s cost pressures, global competition and reinvestment needs have only intensified. Leading voices, from Mario Draghi to Christine Lagarde and major European industrial players, have issued urgent warnings that Europe is running out of time to secure its economic future. Therefore, the Commission’s December proposals land at a critical moment for Europe and they are an opportunity to shift from diagnosis to delivery and demonstrate that the EU is able to meet the challenge and act at the scale and speed required.
Tackling the challenges
Europe’s industrial base faces intensifying pressures: high input costs, fierce and sometimes unfair competition and major reinvestment needs. While there is growing consensus that the long-term competitiveness of European industry hinges on its ability to transform, companies remain hesitant to commit capital without clearer signals, stronger markets and more predictable support.
European grids, essential to powering this transformation, are struggling with capacity constraints, supply-chain bottlenecks and fragmented governance. Delivering timely and affordable electrification will require a decisive political push to unlock investment, accelerate planning and strengthen system coordination.
Delivering action
The Clean Industrial Deal implementation package must translate political ambition into a clear, predictable and investable pathway for industry. The Industrial Accelerator Act will need to strengthen the business case for clean manufacturing, including through establishing predictable lead markets.
The Grids Package must strengthen the delivery of an efficient, interconnected European electricity grid that enables renewables-based electrification, cost-effective infrastructure investments and sets Europe up to build a secure resilient energy system. Targeted measures to overcome grid congestion, improve governance and regional coordination, as well as provide a clear direction for investment, are needed to prepare Europe’s energy system for the future.
What does this mean for Europe’s long-term trajectory?
Modern grids and a future-proof industrial base are not only climate necessities; they underpin Europe’s energy security, industrial sovereignty and ability to compete globally. The measures expected next week are a decisive moment for Europe to translate its strategic ambitions into delivery.
Delivering a competitive future for industry: Expectations for an ambitious Clean Industrial Deal implementation package
A more assertive use of trade measures – from EU preference to new FDI conditions tied to skills and technology transfer – marks a step-change and more concerted attempt in Europe’s industrial policy approach. However, dropping “decarbonisation” from the title must not dilute the IAA’s core purpose: providing the tailored support needed to make low-carbon investment viable, including in Europe’s energy-intensive industries. Trade policy alone will not deliver this; without targeted measures to accelerate decarbonisation, heavy industry remains locked into fossil exposure and risks being structurally outcompeted.
Lead markets are essential to generate predictable demand and unlock private investment for low-carbon production. The IAA should set out a comprehensive framework with tailored approaches across value chains – from clean technologies to low-carbon metals, chemicals and cement. The package must go beyond labels and public procurement alone, introducing stronger tools, like mandatory or phased-in product requirements, whilst pairing EU preference with pragmatic cooperation with strategic partners to build larger, mutually beneficial value chains.
The IAA should prioritise support for sectors and projects where Europe has strategic interests or comparative advantages – illustrating that effective industrial policy is as much about deciding what not to support as what to prioritise. This strategic focus should be embedded in emerging coordination and funding instruments help steer investment towards genuinely European priorities.
Proposals to improve the effectiveness of the CBAM, such as anti-circumvention measures and downstream scope expansion, are important steps to delivering a watertight mechanism which will drive industrial decarbonisation in Europe – however, the Commission must also ensure that the CBAM is politically resilient to external pressures, such as mounting criticism from trade partners.
Better grid planning to deliver a resilient Energy Union: Benchmarks for an ambitious European Grid Package
The Package should avoid a narrow focus on permitting processes (much of which has been captured in previous legislation). Instead, it should focus on tackling more significant bottlenecks that lead to inefficient outcomes, such as connection queues and a lack of clear alignment of mandates and objectives between governments, regulators and Transmission System Operators (TSOs).
The Package should show political ambition on strengthening the independence of planning processes, including measures for better oversight and data transparency, reform of existing institutions to ensure independence and transparency of scenario development, and proposals for holistic energy system planning by independent bodies with EU oversight.
The Package should include measures to harmonise and improve the functioning of regional cooperation structures by providing stronger leadership and facilitating political cooperation, and unlocking faster agreements on key decisions, including on cross-border cost allocation.
Establish formal mechanisms to promote the rollout of innovative grid technologies and support the standardisation and speedy delivery of distribution network development plans, including targeted instruments to support smaller Distributed System Operators (DSOs) and harmonising flexibility market development across member states.
Concrete measures for public capital should include re-directing unused public funds to support existing projects, providing additional EU funding for domestic infrastructure with EU relevance. The development of instruments to attract private investment to boost financial support from the private sector will be essential.
Quotes
Manon Dufour, Executive Director, Brussels said
“Europe is running out of room for delay. The urgency is real, and the cautions from Draghi and Lagarde about the risks of inaction should not be ignored. Companies stand ready to commit capital and support reform, but the pace of delivery has yet to match the scale of the ambition. The upcoming proposals will be a decisive test of whether Europe is serious about turning strategy into results.”
Luke O’Callaghan-White, Programme Lead, EU Energy Transition said
”Efficient and clean electrification of the EU’s economy is an opportunity for security, competitiveness, affordability and climate benefits. To seize this opportunity, Europe needs a functional, interconnected and modern electricity grid. The European Grids Package is a critical moment to address key bottlenecks, like connection queues, inefficient planning or regional disparities and capture the potential of an electrified renewables-based energy system.”
Domien Vangenechten, Programme Lead, EU Industry said
“Rumoured elements of the CID package suggest the EU may finally be shifting towards a more active industrial-policy approach, including on trade tools. That would be a real and welcome step change, but these measures alone won’t create the investment case Europe’s energy-intensive industries need. The Industrial Accelerator Act needs to bring concerted action on lead markets, faster infrastructure delivery and targeted support to help a €100 billion pipeline of low-carbon industrial projects reach investment stage.”
Rheanna Johnston, Senior Policy Advisor, EU Energy Transition said
“Current grid planning processes are not set up to deliver an electrified future affordably or quickly. Europe needs independent decision-making processes and coordinated European planning structures to make sure citizens and industry can plug into the benefits of the future energy system.”
Elina Pihlajamӓki, Policy Advisor, EU Industry said
“Europe’s competitiveness depends on a credible strategy to create predictable, scalable lead markets for clean materials and technologies. The Industrial Accelerator Act is an opportunity for the Commission to deliver on this by setting out a comprehensive package of lead market measures and moving beyond the limits of voluntary initiatives to measures that truly shift markets.”
Available for comment
Domien Vangenechten – E3G Programme Lead (EN, NL) – Industry; Clean Industrial Deal
domien.vangenechten@e3g.org | + 32 (0) 474 871 827
Luke O’Callaghan-White – E3G Programme Lead (EN) – Energy; Grids
luke.ocallaghanwhite@e3g.org | +32 (0) 49 52 94 331
Ellie Belton – Senior Policy Advisor (EN) – Trade; CBAM
ellie.belton@e3g.org | +44 (0) 7712 537878
Rheanna Johnston – Senior Policy Advisor (EN, DE) – Energy; Grids
Rheanna.johnston@e3g.org | +32 492 97 8250
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E3G’s latest publications on grids and the benefits of the EU’s electrification; The future of the EU’s energy intensive industries; and how to build lead markets in the EU for clean materials and decarbonising steel, cement, aluminium and ammonia industries.
