Strategic Sectors for a Clean Industrial Future: The Foundational Role of Steel, Automotive and Chemical Industries in Europe’s Clean Industrial Deal

The Clean Industrial Deal is the pledge of the von der Leyen II Commission. A pledge to  stay on course with our climate objectives. while ensuring growth. It is a structural transformation of our industrial base — a roadmap to make Europe’s industry both globally competitive and climate neutral. For these two must go hand in hand.  

In fact with this Deal, we affirm a fundamental truth: our environmental and economic goals are not at odds, they are mutually reinforcing. Industrial decarbonisation, driven by innovation and investment, is an engine for resilience, sovereignty and prosperity in the 21st century. 

But to succeed, the Clean Industrial Deal must be rooted in the strength of our industrial pillars. It must begin with the sectors that are both the most emissions-intensive and the most foundational: steel and metals, automotive, and chemicals. These sectors are not only essential for Europe’s economic performance; they also anchor entire value chains, millions of jobs and strategic capacities. 

From Challenge to Transformation 

Today, these sectors face immense challenges. Europe’s chemical industry, for example, is the fourth largest manufacturing sector in the EU, employing 1.2 million people directly and contributing indirectly to 19 million jobs across the continent.

Yet, it is under pressure from high energy prices, ageing infrastructure, and a loss of competitiveness driven by unfair global competition.  Since 2003, the EU’s global market share in chemicals has halved. Basic chemicals are particularly at risk, with over 11 million tonnes of production capacity announced for closure in the past two years. 

The steel and metals sector, once the very foundation of the European project, faces similar stress. With global overcapacity reaching four and a half times the EU’s annual consumption, market distortions and high energy prices have led to reduced output and postponed decarbonisation projects. The aluminium sector’s performance sends  a warning sign: half of its primary production capacity has been curtailed since 2021. 

The automotive sector, meanwhile, represents €1 trillion of EU GDP and employs 13 million Europeans. It is undergoing an unprecedented transformation — from combustion engines to electric drivetrains, from mechanical design to software engineering. For Europe to lead in the 21st century of zero-emission, connected, and autonomous mobility like it did in the 20th century, it needs to regain competitiveness in critical technologies like batteries, AI, and next-generation manufacturing.  

These sectors are not relics of the past. They are the test beds for Europe’s industrial future. 

Their successful decarbonisation will send ripple effects through every supply chain — from raw materials to advanced manufacturing, from defence to pharmaceuticals, from mobility to energy storage.

That is why the Clean Industrial Deal puts them at its core – Europe has the know how and innovative capacities in these areas and a strong competitive advantage in many of the clean tech sectors 

Emergency Plans for Industrial Resilience 

To avoid irreversible damage to our industrial base, the Commission has launched a series of emergency actions, building on extensive dialogue with industry stakeholders. 

For steel and metals, we presented a European Steel and Metals Action Plan, focused on lowering energy costs, preventing carbon leakage, and investing in clean technologies like hydrogen-based and circular production. We are also working on modernising trade defence instruments and accelerating grid connections for electrification. 

For the chemical industry, we are moving at full speed to prepare an action plan that will  enable Europe’s   industry of industries” to rebound, transform, invest and drive growth in Europe. 

For the automotive sector, our Industrial Action Plan lays out five key pillars: innovation and digitalisation, clean mobility, supply chain resilience, skills development, and a level playing field. We are investing €1 billion through Horizon Europe from 2025–2027, accelerating battery innovation and vehicle software platforms, and removing bottlenecks to zero-emission vehicle uptake, including through the Clean Transport Corridors initiative. We want to create a European battery value chain.  

Strategic Dialogue and Policy Certainty 

These actions are not ad hoc. They are part of a new, more strategic industrial governance for Europe. The Clean Industrial Deal must be implemented through permanent strategic dialogues with industry, social partners, and Member States. 

They are designed to identify bottlenecks,  align (and often accelerate) regulatory timelines, map investment needs and mobilise public support tools. In parallel, the new Clean Industrial Deal State Aid Framework, to be adopted in June, will give Member States more flexibility to accelerate decarbonisation investments, acknowledging that while maintaining fair competition in the Single Market is important, today’s competition is global. 

In addition, our upcoming guidance on Contracts for Difference, the use of Power Purchase Agreements, and anticipatory grid investments will provide the policy certainty needed to unlock private capital and derisk first-of-a-kind projects. 

Industrial Sovereignty Through Clean Transition 

The success of the Clean Industrial Deal depends on whether our foundational industries — steel, automotive, and chemicals — can lead the clean transition and stay globally competitive next to maintaining and enhancing the competitive edge of the clean tech industries. These sectors are not only among the most emissions-intensive; they are also deeply interconnected and central to Europe sovereignty and a condition of our prosperity.  

Losing these capacities would not only undermine our climate objectives — it would risk hollowing out Europe’s industrial sovereignty. That is why the emergency plans and strategic dialogues are more than crisis management. They are the conditions for the success of the Clean Industrial Deal. 

With bold leadership, close collaboration, and an unshakable commitment to our industrial future, Europe can turn this transition into an opportunity. It is not only about reducing emissions — it is about renewing the promise of European industry. Giving confidence back to industrial actors, workers, and their families, thereby also cementing support for Europe and for political action.