The Clean Industrial Deal: Towards a Democratic and Socially Just Industrial Transition

In 2019, Commission President Ursula von der Leyen unveiled the European Green Deal, which promised to make Europe the first climate-neutral continent. Six years later, the EU’s industrial sector is in a deep crisis. A cost-of-living squeeze reduced domestic demand, while soaring energy prices undermined Europe’s global industrial competitiveness. If shutting down Europe’s industrial sector was the goal of the Green Deal, we’d be on our way – though clearly, that was never the intention. But even if I believe deindustrialisation was not the intention, our stubbornness in failing to understand the root causes of the crisis and identify real solutions is pushing us in that direction.

Why the Green Deal was and still is the solution

The goal and rationale behind the Green Deal still make sense. Europe rightly aims to contribute to global climate action and reduce the economic damage caused by climate change. Numerous studies confirm that the costs of inaction far outweigh those of the energy transition.

We should also not forget that Europe largely depends on fossil fuel imports to meet its energy needs. Phasing out fossil fuels would free Europe from volatile fossil fuel prices and help ensure lower, stable energy prices for industry and consumers.

Rather than rolling back the Green Deal, as some conservatives suggest, we should focus on why it is failing—and what must change to help European industry transition effectively.

Learning from the Green Deal’s Shortcomings

While the Green Deal rightly raised the level of ambition, it failed to recognise the need for sustained financial support to help industry transition.

The Just Transition Fund was a step in the right direction, but it was too small and too narrow in scope. The Recovery and Resilience Facility provided temporary—often ineffective—relief, not a long-term funding framework.

This forced Member States to scramble together national subsidy programmes, leading to fragmentation, unequal competition, and growing tensions over state aid. Meanwhile, the US moved ahead with the Inflation Reduction Act, a massive programme of public support for clean industry, and China had already implemented long-term plans to scale up the manufacturing of clean technologies – which is why they now hold a strong position in global industrial competition.

Europe, instead, relied on a patchwork of short-term national plans that lacked sufficient financial support, hoping that the industry would make the necessary long-term investments. However, they perceived that the risks were too high—especially with major elections approaching and far-right parties gaining in the polls, casting doubt on the long-term stability of EU decarbonisation policies.

Instead of addressing these shortcomings, the EU appears to be shifting direction. The industrial crisis triggered a dangerous U-turn: rather than reinforcing the Green Deal, policymakers are supporting the defence industry as a driver of economic recovery.

Defence spending is now being rebranded as a strategic investment. This shift risks diverting limited public funds away from the climate and social priorities of the Green Deal.

The consequences are becoming clear. Industries are delaying green investments, regions are losing jobs and missing out on new ones, citizens are growing increasingly sceptical. Europe risks not only worsening the industrial crisis, but also triggering a broader social one, putting the future of the European Union into question.

The Case for a Clean Industrial Deal

A Clean Industrial Deal should build on the Green Deal’s foundation while correcting its most critical flaw: the lack of strategic public investment. It must maintain the climate and energy objectives, while treating industrial decarbonisation not just as an environmental necessity, but as a social and democratic project.

This means:

• A long-term EU-level fund dedicated to clean industrial transformation
  
• Public procurement strategies that prioritise green and local production
  
• Support for workers and communities to manage the transition
  
• Stronger democratic governance over industrial policy
  
• No downward revision of Europe’s energy and climate ambition
  

We need to invest in European industrial sovereignty by ensuring that green industries have the infrastructure, the workforce, and the support they need.

But we also need to invest in people. Without targeted social policies, the green transition risks leaving workers and communities behind. Training programmes and instruments ensuring decent wages for workers must become core pillars of industrial policy.

No Transition Without Support

Public investment is not just a financial issue. It is a question of legitimacy.

People will not support a transition that they perceive as unjust, imposed from above, or driven by corporate profit. They will support a transition that offers them good jobs, affordable energy, and thriving communities.

The Clean Industrial Deal must ensure that decarbonisation becomes a source of prosperity—not a trigger for economic anxiety or social backlash. This is not just a matter of economics, but of democracy.

The 2024 EU elections sent a clear message: citizens are worried about the economy and their way of life and fear that the energy transition will damage both. To rebuild public trust in the green transition, Europe must prove that it can deliver economic prosperity—and that it can work for everyone, not just investors or large corporations such as the weapons industry.