From Strategy to Scale: Europe’s CleanTech Industrial Challenge

Europe’s competitive position in clean technology will be determined less by its research strength than by its ability to industrialize at scale. 

That was the central thread running through a CleanTech for Iberia coalition session hosted at IE School of Science & Technology (IE Sci-Tech), where coalition members and partners—from government, finance, and manufacturing—gathered to discuss the EU’s forthcoming approach to "Made in Europe", widely associated in the room with a draft Industrial Accelerator Act (IAA), which at the time of discussion had not yet been formally published.  

The conversation took place against a backdrop of heightened European attention to competitiveness and security. Clean technologies that were once treated primarily as an energy transition agenda, are now being framed as strategic infrastructure. This matters because it changes the parameters of "success"; not announcements, but factories; not pilots, but repeatable deployment; not innovation for its own sake, but industrial capacity that can survive global trade shocks. 

A shift in posture: conditional openness 

If adopted in its current form, the draft IAA could signal a move from a default assumption of reciprocal openness to a more conditional logic: access to European demand should come with durable industrial contribution inside Europe. 

The detail that stood out in discussion is that "Made in Europe" appears to be defined increasingly at component level, not merely at the level of a final product. In practice, that could mean rules and incentives tied to specific parts of value chains - cells, inverters, electrolyser components, and other industrial building blocks - linked to public procurement, auctions, and support schemes. The strategic intent, as interpreted by participants, appears to be clear: to convert Europe’s market size into leverage for rebuilding manufacturing depth. 

The strategic risk is equally clear: if the rules are not calibrated to supply-chain reality, they will either be waived in practice or slow deployment - both outcomes erode credibility. 

Prioritization as industrial discipline 

Several interventions argued that the credibility of a "Made in Europe" approach will depend on selectivity as much as ambition. A broad-brush localization agenda can quickly become economically incoherent. For policymakers and industry leaders alike, prioritization is a matter of strategic discipline. Concentrating resources on components where Europe can realistically build scale and resilience strengthens their overall industrial position. 

The most consistent view in the room was that Europe should focus on components where there is a realistic pathway to scale, resilience, and comparative advantage—rather than attempting to localise every element of complex global value chains. In transport and other industrial sectors, this translates into targeting strategic sub-systems (batteries, power electronics, control and computational components) rather than low-value or commoditised parts where localization would create cost without resilience. 

Hydrogen: bankability begins with demand and execution 

Hydrogen sector voices brought the discussion down to the operational constraints that shape investment decisions. 

First, they raised the issue of visibility. If hydrogen is to serve hard-to-abate sectors - steel, chemicals, refineries, fertilisers - then the policy environment must make long-term offtake credible. Without that, manufacturing ambitions remain structurally underwritten by hope rather than contracts. 

Second, they emphasised execution capacity: one-stop shops, binding timelines, and faster permitting for industrial projects and infrastructure. The point is not administrative tidiness; it is financial viability. A project can be technically sound and still unfinanceable if permitting and grid or network approvals have no predictable schedule. 

Third, the component-level logic of the IAA prompted a specific warning: if Europe defines priority components too narrowly, it risks creating an incomplete industrial picture. For hydrogen, a functioning value chain extends well beyond electrolysis. Compression, storage, purification, and separation are core enabling systems that determine whether projects reach operational viability. Component lists that omit them may inadvertently push manufacturing activity into narrow categories while leaving dependencies intact. 

Critical raw materials: resilience without bottlenecks 

The discussion also surfaced an unavoidable constraint: critical raw materials. Participants generally supported stronger European capability in recycling, refining, and processing. But there was a parallel concern that localization rules could produce unintended choke points if they restrict access to essential materials before European alternatives exist at meaningful scale. 

For policy design, this is a sequencing question. Europe can set direction, but it must avoid creating compliance requirements that outpace industrial reality. Resilience is not achieved by narrowing inputs; it is achieved by building optionality. 

Demand-side policy returns as the decisive lever 

Several participants suggested that the conventional European toolbox of grants, state aid, and subsidies is reaching political and fiscal limits. That makes demand-side instruments more central: auctions, procurement criteria, mandates, and standards that create durable markets. 

A recurrent point was that de-risking mechanisms only work when there is something to de-risk. Without a functioning market, finance becomes an exercise in postponement. This is why some voices pushed for mandates and enforceable downstream requirements, particularly in sectors where voluntary uptake has been slow and where first deployments carry a persistent premium. 

In policy terms, the argument is that industrial strategy cannot be confined to the supply side. If Europe wants manufacturing capacity, it must shape the conditions of demand with the same seriousness it applies to production. 

Finance perspective: what makes industrial projects investable 

From a financing standpoint, the discussion coalesced around a set of practical conditions for bankability: 

• Market clarity: credible demand signals and long-term contractability 
• Permitting and implementation speed: administrative predictability and shorter timelines 
• Industrial clustering: shared infrastructure, coordinated ecosystems, and reduced project complexity 
• Risk-sharing instruments: mechanisms suited to first-of-a-kind deployments 

The clustering point carried particular weight: when offtakers, suppliers, infrastructure, and local institutions are coordinated geographically and operationally, projects become easier to execute and finance. In effect, clustering reduces complexity, and complexity is often the hidden cost in industrial deployment. 

The credibility test: enforcement and execution 

One intervention from established manufacturing highlighted the political economy of the moment: Europe often has well-designed policy instruments, but uneven enforcement and slow implementation can leave European producers exposed to imports produced under different cost and regulatory conditions. The example cited involved projects awarded to non-European suppliers at lower cost, with European producers facing margin pressure and redirecting investment toward jurisdictions offering clearer rules and faster administrative processes. 

This goes to the heart of the IAA debate: the question is not whether Europe can write industrial rules, but whether it can execute them in a way that changes outcomes for real firms within real investment cycles. 

Cross-Sector Alignment at a Critical Juncture 

The exchange at IE Sci-Tech illustrated the value of structured, cross-sector dialogue at a moment when European industrial policy is entering a more assertive phase. CleanTech for Iberia brings together policymakers, NGOs, technology developers, investors, and financial institutions to examine proposals not only in strategic terms, but through the lens of implementation. That alignment of perspectives—regulatory, financial, and industrial—is increasingly necessary as the EU moves from positioning to binding instruments. 

The session was chaired by Bianca Dragomir, Director of CleanTech for Iberia, and Geoffroy Gérard, Director General of IE Foundation and Chief Development Officer of IE School of Science & Technology. The discussion underscored a recurring theme: Europe’s “Made in Europe” direction will ultimately be judged on execution. Selective localization, credible demand creation, faster permitting, aligned financial instruments, and secure access to critical materials are investment conditions. When they are coherent, manufacturing decisions follow. When they are fragmented, projects slow down or relocate. 

Holding the consortium’s second convening at IE Sci-Tech placed the conversation within an academic setting closely connected to industry and policy practice. In the current European context, such exchanges help narrow the distance between legislative design and industrial reality—an increasingly decisive variable in Europe’s competitiveness equation. 

The Industrial Accelerator Act was, at the time of the session, still in draft form and expected to move toward formal proposal. The real test will begin thereafter, in the way Member States interpret, finance, and operationalize it. Conversations such as this one help narrow the distance between legislative design and industrial reality.