On July 2, 2025, the European Commission published a recommendation on tax incentives supporting the Clean Industrial Deal. This sends an important signal to industry: the EU not only imposes costs on emissions (CBAM, EU ETS) but also offers concrete benefits to companies investing in clean technologies. We examine what this means for Polish businesses.
Clean Industrial Deal – context for new incentives
In February 2025, the European Commission published the Clean Industrial Deal (CID), which sets out a common path for decarbonization and competitiveness for European industry. The main premise is that decarbonization should be a source of growth, not a burden.
However, the EU needs massive investment – an estimated €480 billion more per year than in the previous decade. Where will this money come from? The Commission is focusing on mobilising private capital through appropriate tax incentives.
Two pillars of the recommendation
The Commission Recommendation focuses on two main instruments: tax credits for investments in clean technologies and decarbonization of industry and accelerated depreciation for clean-tech equipment, including the possibility of immediate 100% write-off.
Tax breaks for clean technologies – specific amounts
The Commission recommends introducing tax breaks for projects creating production capacity in the area of clean technologies – the production of net-zero final products, key components and critical raw materials.
How much money is involved? According to the Clean Industrial Deal State Aid Framework (CISAF):
- Outside supported areas: Max. EUR 150 million on the project, intensity to 15% eligible costs
- In supported areas: Max. 200-350 million EUR on the project, intensity 20-35%
- For SMEs: the intensity can be further increased
These are significant sums that can truly influence investment decisions. For comparison, a typical photovoltaic panel production line requires an investment of €50-150 million. A tax credit covering 15-35% of these costs can significantly impact the project's profitability.
Reliefs for industrial decarbonization
A separate category of relief applies to investments that reduce greenhouse gas emissions or improve energy efficiency. The maximum aid is EUR 200 million per project, and the aid intensity may be 20-60% depending on the type of investment. The Commission particularly encourages support for companies implementing corporate transformation plans in line with European Climate Law.
What to do with unused relief?
A company investing in clean technologies may not have sufficient income to fully utilize the tax relief. The solution: the ability to transfer unused tax relief to 4 yearsIf after this time the relief is still not used, the Commission recommends its cash refund.
Additionally, the Commission suggests the possibility of deducting relief not only from CIT, but also from other national taxes.
Accelerated depreciation – up to 100% in the year of purchase
Standard depreciation spreads the purchase cost over many years. For example, a production machine worth PLN 10 million depreciated over 10 years yields an annual depreciation of PLN 1 million. At a 19% corporate income tax rate, this translates to a tax savings of PLN 190 annually.
Accelerated depreciation allows for a larger write-off earlier, resulting in lower taxes in the initial years and improved financial liquidity. This is crucial for companies making capital-intensive investments.
The Commission recommends the most advantageous form: immediate full write-off (immediate expensing) – 100% of the cost in the year of investment. The same machine, costing PLN 10 million, would result in a one-time write-off and "savings" of PLN 1,9 million in the year of purchase, instead of spreading it over a decade.
If a full immediate write-off is not possible in a given tax system, the Commission recommends a minimum: the possibility of writing off at least 30% of costs in the year of acquisition. The remainder would be subject to standard depreciation.
Depreciation flexibility
The Commission recommends flexibility – the company can choose its own depreciation schedule: standard depreciation, accelerated depreciation for the entire value of the asset, or accelerated depreciation for only part of the value.
This flexibility is particularly valuable for companies that don't have enough income in a given year to fully benefit from the immediate deduction. They can spread the benefit over several years, optimizing their tax burden.
Zero-emission vehicles in company fleets
The recommendation also covers zero-emission vehicles in company fleetsThe Commission suggests subjecting them to accelerated depreciation.
Why are corporate fleets crucial? In March 2025, the Commission published the Automotive Action Plan, indicating that corporate fleets account for approximately 60% of new car registrations in the EU. Corporate purchasing decisions are more sensitive to fiscal incentives than those of individual consumers. Accelerating EV adoption in fleets could therefore significantly impact the entire automotive market.
Additional benefits for contributing to immunity
The Commission is introducing the concept of increased incentives for projects that contribute to the resilience of European industry – i.e. reducing dependence on single suppliers outside the EU.
Higher tax relief or more favorable depreciation may apply to projects that meet certain criteria:
- Reducing dependencies – projects leading to the production of net-zero products or key components for which the EU has a high dependency on one third country
- NZIA Strategic Projects – projects recognized as strategic in accordance with the Net-Zero Industry Act
- Valleys of acceleration – projects located in designated net-zero technology acceleration valleys
- Sovereignty Seal – projects with a positive assessment by the Innovation Fund and awarded the sovereignty seal
- Critical raw materials – strategic projects in accordance with the Critical Raw Materials Act
This is a clear signal: the EU wants not only decarbonization, but also reindustrialization in strategic sectors.
What does this mean for Polish companies?
The Recommendation is not a legally binding act – it is a recommendation for Member States. The key question is: will Poland implement it, and if so, when? Member States are to inform the Commission by December 31, 2025 about measures introduced or announced.
Companies planning to invest in clean technologies should monitor developments and consider potential incentives in project profitability analyses.
CBAM and tax incentives – the carrot and the stick
It's worth considering the recommendation in the context of the CBAM. The border adjustment mechanism imposes costs on the import of high-emission goods—it's the "stick" in EU climate policy. Tax incentives for decarbonization are the "carrot." Together, they create a coherent system of incentives: the costs of high-emission production increase, while the costs of transformation decrease.
For companies covered by the CBAM (importers of steel, aluminum, cement, fertilizers, hydrogen), this context is crucial. CBAM costs will steadily increase as free EU ETS allowances decrease – free allowances will be phased out completely by 2034.
At the same time, new opportunities are emerging to support investments that reduce emissions. A company that currently incurs CBAM costs for importing high-emission steel may tomorrow benefit from relief for investing in low-emission production or technologies that increase energy efficiency.
Summary
The European Commission's July 2025 Recommendation shows that the EU does not limit itself to imposing costs on emissions, but actively creates incentives for investments in clean technologies.
Key instruments:
- Tax reliefs up to EUR 150-350 million per project (15-35% of costs)
- Accelerated depreciation up to 100% in the year of purchase
- Transfer of reliefs for 4 years + refund of the unused portion
- Additional benefits for projects that increase EU resilience
This is good news for companies planning decarbonization investments. It's worth monitoring the implementation of recommendations in Poland and considering potential incentives in cost-effectiveness analyses.
Are you planning decarbonization investments and want to understand how CBAM will impact your business? Contact Green Reporting – we'll help you prepare for the changing regulatory environment: office@greenreporting.eu
