Tax incentives to promote clean technologies
On 10 October, the Council of the European Union approved conclusions on the use of tax incentives to promote clean technologies and industry, supporting the implementation of the Clean Industrial Deal (CID).
➡️ The conclusions is available via this link.
The conclusions respond to the European Commission’s Recommendation of 2 July 2025, which outlined how Member States can use fiscal tools such as targeted tax credits and accelerated depreciation to boost investment in clean technologies and industrial decarbonisation.
✅ Key elements of the Council conclusions:
📌 Welcome the the Commission recommendation on tax incentives to support the Clean Industrial Deal and in light of the Clean Industrial Deal State Aid Framework.
📌 Emphasise that tax incentives should remain simple, effective, and adapted to diverse national tax systems.
📌 Highlight the importance of flexibility and Member State discretion in designing and applying incentives, given budgetary realities.
📌 Encourage evaluation and exchange of best practices across Member States to ensure effective implementation.
☑️ Why this matters:
Tax incentives can become a cornerstone of Europe’s industrial transformation, helping to:
- Stimulate private investment in decarbonisation and clean manufacturing;
- Improve cash flow for businesses investing in energy efficiency and renewables;
- Strengthen the EU’s industrial base while supporting the 2050 climate neutrality goal.
By aligning tax policy with the Clean Industrial Deal and State aid rules, the EU is laying the groundwork for a coherent fiscal framework that empowers industries to lead the clean transition cost-effectively and competitively.
