A green industrial policy for Spain in the European framework 

Decarbonization, inevitable in the current context, presents an opportunity to develop technologies that drive the energy transition. While Spain has experienced a decline in its industrial sector, the shift to a decarbonized economy opens a window to reverse this trend. The goal is not just reindustrialization but doing so in high-value-added sectors that promote quality employment and sustainability.

The European Commission has implemented ambitious policies for decarbonization and industrial autonomy, such as the Fit for 55 program and the Net Zero Industry Act, recently reinforced by the new Clean Industrial Deal introduced in February 2025. These measures partially address previous shortcomings, introducing a new framework specifically for clean industry, simplifying administrative processes, and channeling up to €100 billion to support investments. However, uncertainties remain regarding the novelty and actual scale of this initiative, as well as doubts about the overall effectiveness of the regulations.

To overcome these limitations, the authors propose a European-level approach focused on two pillars: financing and innovation.

Financing:

• Promote private investment across all industrial sectors capable of decarbonization in a homogeneous, privately-funded manner to avoid market distortions.
• Use green public procurement and contracts for difference to boost demand, secure competitive clean energy, and stabilize revenue flows.
• Ensure these mechanisms are uniformly designed across Europe to prevent fiscal-capacity imbalances.

Public Financing:

• Allocate a larger share of ETS and CBAM revenues to emission-reduction technologies in energy-intensive industries.
• Create specific clean-tech funds with a single entry point in the next Multiannual Financial Framework.

Innovation:

1. Encourage private R&D investment via tax incentives, a consolidated Banking and Capital Markets Union, and an expanded EIB mandate.
2. Establish a European Advanced Research Projects Agency (E-ARPA) to promote disruptive clean and strategic technologies.
3. Strengthen the European Research Council with more resources and direct funding schemes for institutions.

These European efforts must be complemented at the national level by improving the institutional environment, aligning energy, industrial, and innovation policies, and reinforcing talent-attraction measures, as well as by refining Spain’s draft Law on Industry and Strategic Autonomy to deepen market development and intersectoral coordination.