Revitalising industry in the European Union: The role of Poland and the wider Central and Eastern European region
As the European Union (EU) accelerates efforts to retain a competitive edge under its Clean Industrial Deal, a critical risk is emerging: the uneven pace of progress across regions. Central and Eastern Europe (CEE) is home to a significant share of Europe’s industrial and energy-intensive sectors, and if this region is not meaningfully included in policy design and investment flows, there is a real danger that the broader decarbonisation effort could stall.
On June 25, under the official patronage of the Polish Presidency of the Council of the European Union, key stakeholders gathered in Brussels to address this very challenge during the high-level roundtable “Revitalising Industry in the EU: Insights from Poland and the CEE Region” organised by Clean Air Task Force, in collaboration with Business and Science Poland.
The event included keynote interventions from Irena Banaszyńska, Counsellor-Attaché for Industry, Space and TechHarm, Polish Presidency of the Council of the European Union and Jacek Truszczyński, Acting Head of Unit: Net Zero Industries, DG GROW, European Commission.
The roundtable convened stakeholders from policy, industry, and civil society to exchange views on how CEE can play a more central role in the EU’s climate and industrial agenda. Participating organisations included BASF, Bellona Europa, Carbon Capture and Storage Association (CCSA), Cefic, European Aluminium Association, European Lime Association (EuLA), Euromines, International Copper Association Europe (ICA Europe), nucleareurope, SEV – Hellenic Federation of Enterprises, and Shearwater.
The discussion explored how a broader and more inclusive energy transition is critical not only for reducing emissions but also for ensuring the long-term competitiveness, resilience, and energy security of Europe’s industrial base. Ensuring a just and effective transition means moving beyond inclusion — it requires empowering CEE countries to actively shape and benefit from Europe’s clean industrial future.
Roundtable themes: A focus on the role of carbon capture and storage, clean hydrogen, and nuclear energy
1. CEE-specific opportunities and systemic barriers
While Poland and other CEE countries have made measurable progress in the energy transition such as significantly increasing the share of solar and wind in the energy mix, persistent challenges remain, especially in the industrial sectors. Key obstacles frequently highlighted during the discussion included high energy costs, the slow deployment of clean hydrogen and carbon capture and storage (CCS), and the lack of reinvestment of the Emissions Trading System (ETS) revenues into decarbonisation projects. These challenges are further compounded by global competition, particularly from China, and the uneven adoption of new technologies across EU member states.
The roundtable participants agreed that successful decarbonisation in CEE requires aligning industrial, social, and financial transitions. Communication on the Clean Industrial Deal, published in February 2025, presents opportunities for investment and new markets for clean products.
However, to ensure that future regulations achieve their intended impact, cross-sector initiatives must be comprehensively developed and implemented. The success of these policies will depend on the just and efficient allocation of subsidies, as well as the preservation of a level playing field within the single market. Energy-intensive industries in the region face a combination of rising carbon and energy prices, stricter climate regulations, and evolving investor expectations around ESG. These factors create particular pressure for legacy industries central to CEE economies, such as in Poland. There is also an innovation gap across the region, resulting from historical underinvestment in research and development (R&D), which is a consequence of limited access to risk capital and experience in this area compared to Western Europe.
2. Hydrogen, nuclear energy, and carbon capture and storage: Regional strategic priorities
Carbon capture and storage
Participants agreed that carbon capture and storage remains indispensable for industries with hard-to-abate process emissions, such as the cement industry. However, infrastructure bottlenecks and financial constraints faced by CEE countries slow down CCS deployment. Participants noted that longer transport distances to storage sites, compared to those in Northern Europe, are one of the reasons behind the higher costs of CCS in the region.
Regional cooperation and government leadership, as coordinators of the process, are necessary to overcome these barriers, particularly as Poland and Romania move to implement their CCS strategies, due to legally binding obligations introduced by the Net-Zero Industry Act (NZIA). The European Commission has recently published a long-awaited decision that operationalises Article 23 of the NZIA, assigning individual CO₂ storage obligations to 44 oil and gas producers across the European Union. Each obligation represents a share of the EU-wide target to develop 50 million tonnes of operational CO₂ storage capacity by 2030. Efficient allocation of ETS revenues to CCS projects is crucial to meet the above-mentioned ambitious EU targets, as is the creation of domestic storage networks to reduce costs and reliance on CO₂ exports. The capital costs for a domestic CO₂ storage scenario in the CEE region are estimated to be two to three times lower than those in an export-reliant scenario, with annual operating costs being over three times lower.
Clean hydrogen
Clean hydrogen is critical for decarbonising sectors that cannot be easily electrified. Replacing unabated hydrogen generation in sectors like fertilisers and chemical production should come first, followed by using hydrogen in new areas where it helps to reduce the most emissions cost-effectively, such as steel, shipping, and aviation.
According to CATF’s recent data, the CEE region accounts for almost a quarter of EU hydrogen consumption, at 1.6 million tonnes per year. Poland, already the largest hydrogen consumer in CEE and third in the EU, mainly uses hydrogen in refining and ammonia production. This gives Poland a strong position to lead hydrogen development, particularly by promoting realistic demand forecasts, prioritising hydrogen use in sectors that cannot easily switch to electricity (hard to abate sectors). This approach calls for a diversified portfolio of hydrogen production, as relying solely on renewable hydrogen may not be adequate to achieve near-term decarbonisation targets or sustain industrial competitiveness.
Roundtable participants also called for the development of clean hydrogen clusters located close to consumption centres to drive down costs and boost impact.
Nuclear energy
The roundtable emphasised that nuclear energy, which has received comparatively less emphasis in past EU energy debates, should now play a significant role in decarbonisation. Beyond electricity generation, it has the potential to drive industrial decarbonisation in Europe by providing heat and hydrogen. However, unlocking this potential will depend on addressing persistent challenges, including high upfront costs and regulatory barriers. The core issues include the cost gap between first-of-a-kind nuclear projects and fossil incumbents, the risk of industrial decline due to price pressures, and the need for tailored strategies to safeguard EU manufacturing competitiveness.
Addressing these challenges requires more than ambition, it necessitates coordinated and cross-regional action through financial innovation (such as risk-sharing and offtake agreements), enabling policy frameworks, and strong public-private partnerships to derisk early projects and accelerate deployment.
Policy instruments and enablers
Policymakers should create an enabling environment at both the EU and national levels that supports a broad portfolio of decarbonisation technologies. Access to finance (both capital and operational) is crucial. Proposals presented during the roundtable included extending the operation of the Modernisation Fund by 2030, and reducing the geographical imbalance of the Innovation Fund, both of which will be crucial for decarbonisation efforts across industrial sectors.
Streamlining permitting procedures is an urgent priority, which calls for national policymakers to accelerate the deployment of renewable, nuclear energy, and CCS infrastructure. EU carbon pricing under the ETS should be optimised to ensure revenues directly support decarbonisation efforts. Stakeholders emphasised the importance of allocating ETS revenues specifically to decarbonisation projects, rather than to unrelated investments (a recurring issue in recent years, particularly in Poland). Finally, optimising and promoting cluster-based and cross-border cooperation will be essential to ensure a just and competitive energy and industrial transition for the CEE region.
What CEE needs to accelerate the energy transition and stay competitive
In order to ensure that CEE Member States can fully contribute to enhancing the competitiveness of the European economy while simultaneously decarbonising it, stakeholders attending the roundtables stressed that EU policies must address the real needs of transitioning economies to ensure both decarbonisation and competitiveness.
Therefore, the following requests should, according to attendees, be considered when designing the policies that will help achieve this objective:
- Ensure technology neutrality across all EU policies
- Reduce energy costs for industry to maintain global competitiveness
- Improve the private sector’s access to financing
- Accelerate and streamline permitting processes for industrial projects
- Support the creation of lead markets for clean industrial products, including by leveraging Green Public Procurement
- Accelerate infrastructure development for carbon capture and storage projects
- Develop cluster-based industrial decarbonisation strategies
- Ensure full integration of CEE perspectives into EU policy design
- Recognise the socioeconomic dimension of the industrial and energy transition
The roundtable, held in the final days of Poland’s EU Council presidency, brought forward CEE perspectives that should be recognised at the forefront of the EU’s industrial decarbonisation agenda. The Polish presidency renewed focus on the realities faced by energy-intensive sectors in the region and encouraged the development of pragmatic, locally tailored, and technology-neutral solutions in the spirit of competitiveness and security.
With the Danish Presidency now underway, there is a clear opportunity to carry forward and scale the progress initiated under the Polish term. Sustaining a strong, regionally inclusive focus will be critical to ensuring that Europe’s decarbonisation and competitiveness goals are met hand in hand.
