"This is the first scheme under the State Aid Guidelines of the Clean Industry Pact authorised for a small member state. A budget of €500m is available for additional clean technology manufacturing capacity in Luxembourg. Direct subsidies under this scheme will help companies to make key investments in the years to come," said Teresa Ribera, executive vice-president in charge of a clean, fair and competitive transition.

The European Commission has authorised a €500m State aid scheme notified by Luxembourg to support investment in clean technology manufacturing capacity. This decision is part of the Clean Industrial Deal State Aid Framework (Cisaf), adopted on 25 June 2025 to enable Member States to support strategic sectors linked to the transition to a net zero emissions economy.

The Luxembourg scheme provides for direct subsidies to companies operating throughout the country, with aid that can be granted until 31 December 2030, and this ceiling will come solely from public finances. In particular, it targets investments aimed at increasing production capacity in key industrial segments, such as solar and wind technologies, heat pumps and batteries, as well as the associated essential components. The scheme also covers the production of critical raw materials, whether new or derived from recycling and reuse processes, needed to manufacture these technologies. This dimension is in line with the European desire to secure industrial supply chains and reduce dependence on imports.

For Luxembourg, this scheme is a strategic lever for attracting technology-intensive industrial projects against a backdrop of increased competition between member states to capture investments linked to the energy transition. It also marks a shift in the country's economic positioning, historically centred on services, towards more assertive support for targeted, high added-value industrial capacity.