Press release
Commission’s State aid framework for Clean Industrial Deal misses climate goals – lawyers warn
23 June 2025
ClientEarth warns that the leaked draft of the Clean Industrial Deal State Aid Framework (CISAF), due for adoption and public unveiling on 25 June, now risks entrenching support for fossil gas and fossil based low-carbon gases, further diluting the EU’s climate ambitions.
ClientEarth lawyers say the current draft fails to include sufficient environmental safeguards and leaves an open door for projects that rely on fossil fuels. Using fossil gas and so-called low-carbon fuels as temporary solutions will slow down progress towards the EU’s climate goals.
While the updated draft replaces the vague condition for a gas project to be "hydrogen-ready” with somewhat clearer criteria, these are still too weak or unclear. One key rule is to phase out fossil gas by 2040, which is far too late. To stay on track with the Paris Agreement, the EU should move this deadline to 2035 and require regular monitoring of credible phase out plans. Moreover, the draft CISAF does not require Member States to consult the public before submitting draft aid schemes for fossil gas projects to the Commission.
ClientEarth lawyer Stéphanie Nieuwbourg commented:
“This should have been the moment to put climate commitments into action. Instead, the Commission is offering rules that allow tax payers’ money to keep flowing into fossil fuels.”
“The draft also risks disadvantaging companies investing in truly clean technologies. Without clear rules to exclude fossil-based solutions, it could distort competition and divert funding from the areas where it’s needed most.”
“This State aid framework must back real change, and not keep supporting outdated fossil-based models” concluded Nieuwbourg. “Even if support for fossil gas is supposed to be limited to exceptional cases, it still risks diverting public funds from cleaner solutions like electrification, locking industry into higher long-term costs and stranded assets. Without strong, clear criteria, the CISAF could end up weakening – rather than advancing – the EU’s decarbonisation goals.”
ClientEarth is urging the Commission to remove support for fossil gas and low-carbon fuels, strengthen renewable hydrogen standards, embed robust environmental protections and public involvement, and shift aid towards electrification and genuinely clean technologies.
With the final text due 25 June, ClientEarth calls on the European Commission to act swiftly to close these loopholes.
ENDS
Notes to editors:
About State aid
State aid refers to financial support – such as subsidies, tax breaks, or interest-free loans – provided by EU Member States to companies. Such aid can distort competition within the EU's internal market. Therefore, the European Commission oversees and regulates state aid to ensure it does not unnecessarily distort the EU internal market and aligns with EU objectives, including environmental and climate goals.
The CISAF is meant to simplify public funding for clean technologies and industrial decarbonisation.
In April, ClientEarth lawyers expressed concerns that the EU Commission’s proposal for a new Clean Industrial Deal State Aid Framework (CISAF) would enable fossil gas subsidies while failing to provide the necessary environmental safeguards to ensure that public funding drives a truly sustainable industrial transition.
Previous state aid rules allowed subsidies for fossil gas projects labeled as "hydrogen-ready" - a concept we strongly criticised for lacking clear timelines or criteria for switching to renewable hydrogen. This loophole has been removed in the updated CISAF draft after the public consultation. However, the new conditions meant to replace it remain insufficient, still leaving room for fossil gas to be supported under weak climate safeguards.
ClientEarth has also published a policy briefing on environmental mainstreaming in State aid control, with concrete recommendations for a consistent integration of environmental considerations in State aid policy.
About low-carbon fuels:
So-called “low carbon fuels”, such as low carbon hydrogen, are most often produced from fossil fuels with emissions mitigated through carbon capture and storage (CCS). Using CCS to capture emissions from hydrogen production is still a nascent approach, with only a handful of 'blue hydrogen' production sites in operation globally. ClientEarth opposes public support for these fuels, as it prolongs the financing of the fossil fuel industry and supports high-risk approaches to decarbonisation.
About ClientEarth
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.