Decarbonisation will be made achievable and profitable for the European industry, the European Commission said on Wednesday as it unveiled its Clean Industrial Deal.

The “business plan” seeks to address three challenges for industrial players in the bloc: climate change, competitiveness and dependency on critical raw materials. It commits to accelerating decarbonisation, promoting a circular economy and supporting re-industrialisation, Kallanish reports.

Amid worries that the EU decarbonisation plan will result in de-industrialisation, Brussels vows it will deliver “long-term predictability” on its climate ambitions, so that manufacturing companies can minimise investment risks. The bloc remains committed to a decarbonised economy by 2050, and will “stay the course” on the European Green Deal targets, including a 55% net greenhouse gas emissions cut by 2030 and 90% by 2040.

The Clean Industrial Deal primarily focus on energy-intensive industries and the clean tech sector. The first requires urgent support to face high energy costs, unfair global competition and complex regulations. The second will drive industrial transformation and competitiveness, the EC explains.

To tackle the major issue of access to clean and affordable energy, the EU will enforce measures to accelerate permitting process and state aid approvals. It believes the roll-out of renewable energy projects and an internal energy market with physical interconnections, will help reduce dependence on imported fossil fuels and enable electrification.

Without saying if the bloc will subsidise energy for intensive users, a spokesperson says the upcoming Industrial Decarbonisation Accelerator Act will propose “concrete measures” to ensure shorter deadlines for energy infrastructure, which should lower energy costs. In some EU countries, a transmission grid project can take up to 17 years. Additionally, new financing instruments will be launched by the European Investment Bank to provide counter-guarantees and other de-risking support to manufacturers of grid components.

In the short term, the deal will seek to mobilise over €100 billion ($104.8 billion) to support EU-made clean manufacturing. This will be done through the existing Innovation Fund and a proposed Industrial Decarbonisation Bank, to be partially funded by the ETS and the InvestEU. The latter will also be amended to increase risk-bearing capacity, targeting up to €50 billion in additional private and public investment covering areas such as clean tech and clean mobility.

This year, the EC will launch a pilot for a €1 billion auction on the decarbonisation of key industrial processes across various sectors, using a combination of existing resources under the Innovation Fund and auction-as-a-service.

In addition to renewable electricity, green hydrogen is set to play an important role in the decarbonisation of some manufacturing processes, including steelmaking. However, its high cost and restricted supply are preventing steelmakers and other end-users from committing to investments that will unlock its large-scale application.

The EC says its delegated act on low-carbon hydrogen will set out conditions to produce the fuel in a “pragmatic way.” It claims to offer a “comprehensive” regulatory framework on hydrogen, “enhancing certainty and predictability for industry, which are key preconditions for companies to invest.”