State aid can be the key driver for industrial decarbonisation

• Overall, it is a positive development that strong climate conditionalities and guardrails have been attached to the relief of lowering electricity bills for industry within the framework.

• While it is a major concern that fossil gas and low carbon fuels are eligible for state aid, the mention of a 2040 gas phase out objective is a positive step, but this needs to be enforced by Member States to ensure beneficiaries are held accountable.

Brussels, 25th June 2025 – Overall, CAN Europe welcomes the guidelines outlined in the Clean Industrial State Aid Framework (CISAF), especially those supporting investments in the deployment of renewables, battery storage, the electrification of industry practices and measures to improve energy savings. Going forward, it will be crucial to strictly enforce the provisions obliging beneficiaries of state aid to make the necessary investment for decarbonisation.

It is a positive development that strong climate and environmental conditionalities and guardrails have been attached to the relief of lowering electricity bills for industry, such as firms having to reinvest half of the aid into decarbonising their installations. This gives Member States the opportunity to end the payments of billions of tax payers money to energy-intensive industries like steel without obliging them to invest in decarbonisation processes. Investments in false solutions such as gas, carbon capture and nuclear at least receive strict conditions, limiting the damage.

‘With this new framework to support their work, there can be no more ‘buts’ from energy-intensive industries to do swiftly what they omitted so far: urgently investing in decarbonising their polluting activities. Industries like steel and cement have received billions of euros in free allocations, indirect cost compensations and other subsidies, leaving tax payers without any result when it comes to substantially reducing their emissions’ – Greg Van Elsen, Senior Industrial Policy Expert at CAN Europe

While we deeply regret that fossil gas and low carbon fuels are eligible for state aid under this proposal, we welcome the obligation for beneficiaries to produce and implement detailed gas phase out plans for 2040, as a step in the right direction. This can be seen as the European Commission’s first attempt to put a phase out date for fossil gas into perspective, which we strongly support. We encourage the Commission to pursue this path by putting forward a fully fledged gas phase out framework across sectors of the economy, including meaningful enforcement mechanisms.

While not making them binding, the new Framework strongly encourages Member States to include social and tax conditionalities in their state aid scheme, and to support projects that contribute to a circular economy. The proof will now be in the pie: it is up to Member States to have the political will to ensure tax payers money brings benefits for all.

ENDS

For more information and media requests:

James O’Connor, Senior Communications Officer: james.oconnor@caneurope.org