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Financing the Industrial Transition

In brief 

The decarbonisation of Europe’s cement sector requires large-scale industrial transformation. This includes the deployment of breakthrough technologies such as carbon capture, as well as investments in energy systems, circular processes and infrastructure.

These projects are capital-intensive, energy-intensive and long-term in nature. While the technologies needed to decarbonise the sector are increasingly available, scaling them across Europe depends on access to adequate and predictable funding, as well as investment conditions that reduce risk and provide visibility.

At EU level, several instruments support industrial decarbonisation, including the Innovation Fund, which is financed through the EU Emissions Trading System (EU ETS). However, current funding mechanisms remain limited in scale compared to the investment needs of energy-intensive industries.

As the EU advances its industrial policy through initiatives such as the Clean Industrial Deal and the future Industrial Decarbonisation Bank, the focus is increasingly shifting from supporting innovation to enabling deployment at scale.

Our view 

Cement Europe considers that the key challenge is no longer technological readiness, but the ability to bring projects to final investment decision and deploy them at scale in Europe.

The current funding framework does not yet match the scale, complexity and risk profile of industrial decarbonisation projects. Instruments such as the Innovation Fund play an important role, but need to evolve to support large-scale deployment rather than a limited number of projects.

In this context, Cement Europe calls for a stronger and more targeted use of EU and national funding tools. In particular, revenues generated through the EU ETS should be channelled back into energy-intensive industries to support their transition. This would help bridge the gap between climate ambition and investment reality.

In addition, dedicated de-risking mechanisms are needed to support capital-intensive projects, including those involving carbon capture. This includes tools that improve project bankability, provide long-term visibility and reduce exposure to market and regulatory uncertainty.

A more coordinated approach between EU and national funding instruments is also essential. Simplifying access to funding and ensuring alignment between different schemes will help accelerate project deployment across Member States.

Ensuring the right financing conditions is critical to maintaining industrial competitiveness in Europe. It will determine whether decarbonisation investments are realised within the EU, or delayed or relocated elsewhere.