The EU executive body has revealed plans to help Europe’s most polluting industries achieve a green transition, while simultaneously reducing environmental reporting demands on companies. It insists that it will maintain its course on climate goals.

On Wednesday, the European Commission released the “clean industry deal,” outlining a plan to assist polluting industries, such as steel and cement, in transitioning to a net-zero emissions future. The plan also aims to support “clean technology” companies, like those producing electric vehicle charging points.

The Commission highlights four primary goals: stimulating industrial innovation through investment, reducing regulatory burdens, lowering high energy prices, and striving to enhance global competitiveness through new trade agreements.

The Commission also released a plan aimed at lowering energy bills for businesses and consumers, along with controversial proposals to ease environmental reporting requirements for small and medium-sized enterprises.

The clean industry deal reaffirms the EU’s goal to reduce emissions by 90% by 2040 and outlines 40 distinct measures to accelerate the “green transition.” These include faster permits for wind farms and other infrastructure, as well as changes to public procurement rules to support clean technology manufactured in Europe.

Teresa Ribera, the European Commission’s vice president responsible for the green transition, stated, “We believe that the clean industry deal is a business plan for Europe to tackle the climate crisis.”

Ribera dismissed criticisms that the EU is reversing course on the green transition, asserting, “We are not deregulating. On the contrary, we are moving into the implementation phase.”

The Commission announced it would create a new industrial decarbonization bank with €100 billion in new and repurposed public funds, which could indirectly leverage €400 billion from the private sector.

Ursula von der Leyen stated that this simplification is key to restoring competitiveness, promising European firms approximately €6 billion in annual savings.

A more significant role was also outlined for the European Investment Bank (EIB), including providing guarantees to grid component manufacturers, enabling them to increase production. Experts say that hundreds of billions in global investment are needed to build extensive electricity grid networks to meet climate goals.

Ribera, who also leads on competition policy, pledged to amend the EU’s state aid rules by June to accelerate renewable energy and industrial decarbonization.

The new European Commission, which began its term in December with a focus on reducing bureaucracy, simultaneously released details on easing environmental reporting and due diligence rules for small companies and broadly reviewing laws adopted in just 2023 and 2024.

Commission members presenting the proposals argued that they were not weakening Europe’s green transition. Instead, they claimed to be encouraging businesses to participate in the transformation and adapt to a new geopolitical reality.

Stéphane Séjourné, the commissioner responsible for industrial strategy, said, “Europe knows how to reform itself.” Referring to an electric tool that Argentinian President Javier Milei recently gave to Elon Musk as a symbol of reducing bureaucracy, the commissioner added, “We don’t have an electric saw. But we have competent people who are leading this effort.”

The Commission proposed freezing the corporate sustainability reporting directive, set to take effect in 2023, for two years and continuing detailed consultations on exempting small businesses.

Similarly, authorities indicated that the corporate sustainability due diligence directive, which requires companies with over 1,000 employees to assess the impact of their products on the environment and human rights, would also be delayed by a year as the commission seeks to alleviate the burden on small companies.

Although SMEs are already exempt from the directive’s requirements, many say they will be caught up in burdensome rules because they supply to larger companies.

Christian Ehler, the energy and industry spokesperson for the center-right European People’s Party (EPP), the largest group in the European Parliament (EP), said that further simplification of environmental legislation “should not be a taboo” and that “we need to think about whether some [other] environmental legislation from the past legislative term is adequate.”

The bureaucracy reduction agenda has also been extended to the EU’s carbon border adjustment mechanism. This mechanism requires companies importing steel, iron, aluminum, and other “polluting” products into the bloc to pay a carbon tariff, offsetting price differences with EU manufacturers.

The Commission stated it would exempt the smallest importers from the tax, a measure that would affect 90% of importers, or approximately 190,000 companies, while still covering 99% of emissions.

The clean industry deal was released alongside an “affordable energy action plan” aimed at delivering €260 billion in savings annually by 2040.

While environmental advocates welcomed initiatives to reduce bills and accelerate electrification, they expressed concern over the proposal to fund the construction of liquefied natural gas export facilities abroad.

Addressing the business community in Antwerp, European Commission President Ursula von der Leyen said, “I know that there are too many obstacles in front of you. High energy prices and overregulation have increased production costs. We need to reverse this situation; that is the core objective of the Clean Industry Deal.”

On the other hand, Chinese and US industry groups condemned the European Commission’s proposal in the new clean industry plan to favor EU companies bidding for public contracts, arguing that it would be discriminatory and hinder the bloc’s efforts to decarbonize its economy.

The Clean Industry Deal states that “European preference criteria” in strategic sectors will be included in the revision of the bloc’s Public Procurement Framework next year.

A spokesperson from the China Chamber of Commerce to the EU (CCCEU) told Euractiv that Brussels’ proposal risks violating World Trade Organization (WTO) rules, which prohibit discrimination against foreign firms.

They also warned that it could further strain already tense trade relations between Brussels and Beijing.

The spokesperson said, “As China is a key player in many strategic sectors, these preferences may disadvantage Chinese firms, escalate trade tensions, and potentially contravene WTO principles.”

The American Chamber of Commerce to the EU (AmCham EU) similarly stated it was “concerned” by the Commission’s proposal.

“Restricting access for reliable partners will slow down industrial decarbonization, increase costs, and reduce the efficiency of the clean transition,” said AmCham EU, while adding that the Deal was nonetheless a “significant contribution” to the EU’s decarbonization efforts.

The revision of the Public Procurement Framework is not the only legislative change proposed by the Commission that will favor EU firms in the coming years.

Although not included in the Deal itself, a Commission press release issued on Wednesday stated that “made in Europe criteria” will be included in the upcoming Industrial Decarbonization Accelerator Act for both private and public procurement.

The law, which aims to boost domestic demand for EU green technologies, is expected to be formally proposed in the last three months of this year.

Referring to the law, an EU official told Euractiv, “Where the product is made will matter.”