Vulcan View: The latest EU developments 24 February – 28 February

EU unveils €100 billion Clean Industrial Deal to boost green competitiveness

On Wednesday, 26 February, the European Commission announced its plan for EU competitiveness and decarbonisation through the Clean Industrial Deal. The strategy comes in response to increased competition from China and the U.S. with EU officials claiming that Europe can win on green technology.

There will be €100 billion in short-term relief to increase green manufacturing in the EU. The goal is to help traditional industries cut carbon emissions and boost the EU’s emerging clean tech industry.

The main elements of the Clean Industrial Deal are:

Affordable energy 

The main focus of this is to lower energy bills for industries, businesses and households while promoting Europe’s transition to a low-carbon economy.

Boosting demand for clean products

The Industrial Decarbonisation Accelerator Act will increase demand for EU-made clean products – introducing sustainability, resilience, and ‘made in Europe’ criteria in public and private procurements.

Financing the clean transition

The Clean Industrial Deal will mobilise over €100 billion to support EU-made clean manufacturing. This will include the adoption of a Clean Industrial Deal State Aid Framework to accelerate the approval of state aid. A strengthened Innovation Fund and Industrial Decarbonisation Bank.

Circularity and access to materials 

The Clean Industrial Deal will aid the EU industry in securing raw materials through an EU Critical Raw Material Centre, allowing industry to purchase raw materials and negotiate better prices and conditions jointly.

A Circular Economy Act will also be introduced in 2026 to accelerate the circular transition and ensure that scarce materials are used and reused efficiently.

In addition to ongoing trade agreements, the EU will launch the first Clean Trade and Investment Partnerships to diversify supply chains. Additionally, the Commission plans to establish a Union of Skills – investing in workers, developing skills, and creating quality jobs.

Overview

The Commission’s Clean Industrial Deal Roadmap provides a detailed plan on how this key initiative will be implemented. The Clean Industrial Deal will be one of the key flagship initiatives announced this year by the European Commission. It represents a bold step in strengthening the EU’s competitiveness while advancing decarbonisation goals. The initiative aims to position Europe as a global leader in green technology by investing in affordable energy, clean manufacturing, and sustainable supply chains. The success of this initiative will be crucial in ensuring the EU increases its global competitiveness.

 

Ireland’s AI future: recommendations from the AI Advisory Council

The AI Advisory Council launched a report on key AI recommendations on 21 February. The Council, established by former Minister of State for Digital Dara Calleary, was tasked with providing expert advice and guidance on AI policy to the government. The report, ‘Ireland’s AI Advisory Council Recommendations – Helping to Shape Ireland’s AI Future’, focused on six key areas.

1. AI and the Future of Skills and Work 

The report recommended the development of an “AI Observatory” to provide data and insights on labour market dynamics, capital flows, skills development or quality of life enhancement. This would assist policymakers with understanding the changes which are occurring in the labour market and various sectors as a result of AI advancements

2. AI Ecosystem 

Secondly, the report recommended prioritising the commercialisation of R&D by establishing an AI-focused start-up ecosystem, speeding up funding reviews, developing a national AI testbed, and setting up an Irish AI office. Ireland’s strong R&D start-up culture and business-friendly environment provide a solid foundation for these initiatives. However, maintaining this momentum and ensuring ongoing progress will require a coordinated ‘whole-of-government’ approach.

3. AI Literacy and Education 

The report emphasised the importance of promoting AI literacy at all levels of education through professional development programmes and access to AI tools. Ireland must cultivate a future workforce capable of supporting and sustaining advancements in the field. By modernising the country’s workforce and building on existing strengths through upskilling, Ireland can ensure long-term competitiveness.

4. AI Sovereignty and Infrastructure

Furthermore, Ireland should build its indigenous AI capabilities. Establishing AI sovereignty is critical for the country, especially as global trends increasingly lean toward protectionism. Building a strong domestic AI ecosystem is vital to reducing dependence on foreign technology and boosting national competitiveness.

To address these challenges, the report proposes creating an “AI Energy Council” to fast-track the expansion of grid network capacity. Currently, grid constraints, delays in installing new generators, and postponed essential maintenance are holding back progress. The council would focus on identifying bottlenecks, developing policies to expand the grid, integrating energy storage solutions, and accelerating renewable energy projects. These steps are vital to ensuring Ireland can support the AI data centres needed to sustain the ongoing advancement of AI technologies.

Additionally, AI is essential for protecting national data assets. With cybersecurity threats increasing, AI plays a crucial role in developing a robust cyber ecosystem that can identify critical public data resources while maintaining privacy and security.

5. Biometrics & the Public Service 

This section discussed the introduction of Facial Recognition Technology into law enforcement, which the report classified as “high-risk”. To integrate FRT, robust legislation is required.

6. AI and Ireland’s Creative Sector 

The report recommended that the government consider Ireland’s copyright laws and licensing regime to determine whether the current legislation can address the challenges posed by AI disruption.

 

EU is seeking new financial strategies to boost its defence industry

The European Union is ramping up efforts to strengthen its defence sector, and a key part of this strategy is improving access to finance. On Wednesday (25 February), Commissioner for Defence and Space Andrius Kubilius hosted a high-level meeting with top financial experts to discuss how to fund Europe’s defence sector. Among the key participants was Robert de Groot, Vice-President of the European Investment Bank (EIB), who shared how the EIB is already playing a crucial role in supporting defence projects.

Commissioner Kubilius stressed that “Europe cannot take peace for granted”. With increasing geopolitical tensions, the EU must ensure it is prepared for any potential military crisis. However, building a strong defence industry requires significant investment. Mr. Kubilius stressed that the financial sector must play a central role in this effort, calling for a “revamped approach” to funding defence projects.

However, one major challenge is the reluctance of many financial institutions to invest in defence. Banks, pension funds, and asset managers often avoid the sector due to concerns over reputational risks and strict sustainability rules. Participants at the meeting agreed that this mindset needs to change. They also highlighted the need for better-defined rules within the EU’s sustainability framework, which currently doesn’t explicitly support defence funding but doesn’t block it.

To attract more investment, participants suggested:

• Long-term contracts: Governments should place joint, long-term orders for defence equipment, giving companies the stability they need to grow.
• Greater transparency: Defence companies should be more open about their operations to build trust with investors.
• Stronger financial markets: Progress on the EU’s Capital Markets Union and Saving and Investment Union could unlock the large sums needed for defence projects.

The EIB’s growing role in Defence

The European Investment Bank, the EU’s key financial institution, is already taking steps to change the landscape. EIB Vice-President Robert de Groot announced that the bank had doubled its support for the defence sector in 2024 and would do so again in 2025. This includes a €1 billion programme for small and medium-sized enterprises (SMEs) in the defence supply chain, marking a significant shift in the EIB’s approach.

What’s next for the EU defence sector? 

The discussion at the Roundtable will help shape the upcoming White Paper on the Future of European Defence, which will outline concrete steps to improve access to finance for the sector. The Commission is also working on a simplification package to make investment in defence more attractive.

This meeting was just one step in a broader effort to boost defence funding. In November 2024, the EU organised a Defence Industrial Investment Forum, which brought together over 200 representatives from banks, insurance companies, and investment funds. The goal was to find ways to overcome the financial sector’s reluctance to fund defence projects and to explore innovative solutions for attracting private investment.

 

Compliments of Vulcan Consulting – a member of the EACCNY