Lead Markets for Clean-tech
JRC Working Paper Series For a Fair, Innovative and Sustainable Economy, 11/2025
At the beginning of 2025, the European Commission initiated the Clean Industrial Deal, aiming to simultaneously drive decarbonisation and reinforce industrial competitiveness. A key pillar of this strategy is the creation of lead markets for clean technologies, supported by a mix of demand- and supply-side policies. This paper examines the theoretical foundations and practical challenges of deploying demand-side innovation instruments, notably in addressing market failures such as information asymmetry and network externalities. The concept of lead markets is explored in depth, highlighting their role in shaping global standards and fostering early adoption. Drawing on the EU’s prior Lead Market Initiative, the analysis identifies critical success factors, including the importance of agile regulation, sector-specific tailoring, and integrated supply-side support. Attention is given to the risks of technological lock-in, international regulatory competition, and supply-side displacement. The paper concludes that while the EU’s regulatory influence and public procurement capacity provide significant leverage, success depends on coherent, coordinated, and sector-sensitive implementation. Clean technologies, especially in B2B sectors, present a strategic opportunity, provided that policy agility and international dynamics are carefully managed.
GEORGHIOU Luke;
2025-09-03
European Commission
JRC142628
https://publications.jrc.ec.europa.eu/repository/handle/JRC142628,
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