Background and Urgency
On 4 March 2026, the European Commission proposed the Industrial Accelerator Act (IAA), aiming to lift industrial manufacturing to 20% of EU GDP by 2035 and introducing 'Made in EU' requirements for public support of strategic net-zero technologies. This builds on the Net Zero Industry Act, which mandates that by 2030, the EU's domestic manufacturing capacity of strategic clean technologies should cover at least 40% of the EU's annual deployment needs. The Commission is expected to launch the Electrification Action Plan on July 15th, 2026, as a response to the energy crisis triggered by the war in the Middle East and the closure of the Strait of Hormuz. This plan aims to fast-track electrification of transportation, heat, and industry to reduce Europe's exposure to future energy shocks.
The Commercial Opportunity
The electrification push represents an enormous commercial opportunity to scale the value chains of electrification technologies within Europe. However, this will only materialize if the right type of public support and de-risking tools are in place. An open letter from Transport & Environment (T&E), car manufacturers, project developers, investors, civil society organizations, and industry associations welcomes the initiative but calls on the Commission to amend the Clean Industrial Deal State Aid Framework (CISAF), particularly Article 6.2 on clean technology manufacturing capacity.
Current State Aid Framework Limitations
The undersigned argue that the ambitions of the Clean Industrial Deal, IAA, and Electrification Action Plan cannot be delivered through the current State Aid framework. They emphasize the need to make manufacturing aid genuinely bankable. Bankability allows a company to secure private investment and debt, leveraging public de-risking included in its financial model at the moment of investment. It is a strict precondition for achieving a real incentive effect and crowding in private capital. This requires that subsidy levels are known ex-ante through objective criteria, conditions remain within the recipient's control, and the legal framework is stable. Without these, aid may be disbursed, but its private-to-public money leverage ratio will be heavily diminished.
Need for Operational Support
Moreover, the aid needs to not only support the initial investment but also financially support companies in the first years of operation as they face tough and sometimes unfair competition. The Commission has already delivered bankable aid across several areas, such as two-way Contracts for Difference for renewable energy, but similar mechanisms are needed for cleantech manufacturing.
Call to Action
The signatories urge the Commission to take advantage of the upcoming Electrification Action Plan to amend the CISAF and ensure that state aid for cleantech manufacturing is bankable. This will unlock private investment, scale up production, and help the EU meet its electrification goals while reducing dependence on fossil fuels and enhancing energy security.
This article is based on reporting by CleanTechnica. Read the original article.
Originally published on cleantechnica.com
