The New Clean Industrial Deal State Aid Framework (CISAF): The European Commission Creates a New State Aid Toolbox for the Green Transition

The New Clean Industrial Deal State Aid Framework (CISAF): The European Commission Creates a New State Aid Toolbox for the Green Transition

On 25 June 2025, the European Commission adopted the new framework for State aid supporting the Clean Industrial Deal. This Clean Industrial Deal State Aid Framework (“CISAF”) is intended to enable EU Member States to provide funding worth billions of euros for the development of clean energy, industrial decarbonisation and the production of clean technologies in the future.

What is a State Aid Framework?

For many years, the European Commission has issued guidelines and frameworks setting out – comparable to the principle of administrative self-binding under German law – the conditions under which aid measures falling within the scope of Article 107(1) TFEU may be approved.

Ultimately, as is always the case in EU State aid law, the key question is under which conditions and up to what level EU Member States may financially support companies established within their territory without distorting the European internal market.

Alongside guidelines reflecting typical EU policy objectives – such as the Climate, Environmental Protection and Energy Aid Guidelines or the Rescue and Restructuring Guidelines – the European Commission also publishes so-called Temporary Frameworks in response to unforeseen crises. Following the Temporary Framework introduced during the banking and financial crisis, more recent examples include the Temporary Frameworks adopted in response to the COVID-19 pandemic and Russia’s war of aggression against Ukraine.

As the energy sector in particular – especially with regard to security of supply – was heavily affected by Russia’s war of aggression, the relevant Temporary Framework was transformed into the Temporary Crisis and Transition Framework (“TCTF”). In addition to traditional crisis management measures, the TCTF already included provisions enabling aid for the transition towards clean technologies and clean energy. In practice, this resulted in a hybrid instrument combining elements of a crisis framework with those of policy-driven guidelines promoting the energy transition.

CISAF is now intended to replace the TCTF and specifically facilitate large-scale support for the development of clean energy, industrial decarbonisation and clean technologies.

What is the Clean Industrial Deal?

The Clean Industrial Deal was already published in February 2025 as a roadmap for a competitive and climate-neutral European Union. At that time, concrete objectives were defined, including affordable energy, increasing demand for “clean” products, financing the energy transition, promoting circularity and securing access to raw materials.

In particular, it was already recognised that energy-intensive industries must be supported in their decarbonisation efforts and transition to clean energy in order to remain competitive globally, and that the clean technology sector as a whole requires targeted support.

As part of the publication of the Clean Industrial Deal earlier this year, the European Commission also announced its intention to mobilise up to EUR 100 billion in EU funding, including through EU investment funds and revenues derived from emissions trading. In addition, a new State aid framework was announced in February 2025 in order to facilitate investments and public support measures by the Member States.

CISAF now follows as the concrete implementation of those announcements. Through the framework, the European Commission effectively defines which companies may receive support from Member States, under which conditions and to what extent.

What Does CISAF Provide For?

CISAF simplifies the State aid rules in five key areas:

• the roll-out of renewable energy and low-carbon fuels;
• temporary electricity price relief for energy-intensive users in order to facilitate the transition to affordable clean electricity;
• the decarbonisation of existing production facilities;
• the development of manufacturing capacities for clean technologies within the EU; and
• reducing investment risks relating to clean energy, decarbonisation, clean technologies, energy infrastructure projects and projects supporting the circular economy.

More specifically, the framework provides, inter alia, for a “fast-track” procedure for the deployment of clean energy, support for electricity costs for energy-intensive users, as well as new rules concerning flexibility measures and capacity mechanisms.

Support may be granted in the form of individual aid of up to EUR 200 million per project. The aid intensity is based on the eligible investment costs, i.e. the total investment costs directly linked to achieving greenhouse gas emission reductions or improvements in energy efficiency.

Aid exceeding this threshold may also be granted on the basis of a calculated funding gap or through a competitive bidding procedure.

Furthermore, CISAF provides for support relating to the production and manufacturing of clean technologies.

Ultimately, CISAF is also intended to reduce the risk borne by private investors in projects supporting the Clean Industrial Deal, thereby encouraging increased private investment within the EU. This objective has been clearly articulated both by the European Commission and by former ECB President Mario Draghi in his “Draghi Report on EU Competitiveness”.

CISAF will remain in force until 31 December 2030.

CISAF as a Contemporary Instrument?

Although isolated criticism of CISAF has already emerged – for example, the German Renewable Energy Federation (Bundesverband Erneuerbare Energien) has criticised the fact that “low-carbon” fossil and nuclear energy sources are also eligible for support – CISAF is nevertheless likely to prove a timely instrument for supporting the European economy both in its transformation process and in competition with the United States and China.

In 2022, for example, the United States – under the Biden Administration – introduced the Inflation Reduction Act, establishing a mechanism to provide billions of dollars in support for domestic battery production for electric mobility and the development of hydrogen infrastructure within the United States. At the same time, China is entering the EU internal market with heavily subsidised electric vehicles.

Against this backdrop, it is only logical that the European Commission is now equipping Member States with a toolbox enabling them to strengthen domestic industry and the wider economy financially in order to promote economic growth, safeguard competitiveness and simultaneously accelerate the transition towards clean energy and technologies.

At FPS, we advise both private companies and public sector bodies on all aspects of EU State aid law and are closely following the first European Commission decisions concerning aid measures to be approved under CISAF.