This working paper examines how EU corporate tax policy can support industrial decarbonization amid significant funding challenges. Facing industrial competitiveness decline, supply chain vulnerabilities, and ambitious climate neutrality goals, Europe requires substantial financing mechanisms beyond traditional frameworks constrained by political fragmentation and national fiscal limitations. This paper propose three complementary policy options: greening existing EU corporate tax legislation through climate-aligned incentives and removal of counterproductive restrictions; harmonizing the corporate tax base to coordinate measures advancing an EU industrial agenda while potentially directing revenues to the EU budget; and implementing the FINE-for-EU framework—establishing a Pan-European Climate Fund financed by pan-European businesses to conduct green investments, creating a partnership between corporate and public sectors. These initiatives would strengthen EU fiscal architecture while supporting climate goals, addressing the €520 billion annual green investment gap, and providing an institutional pathway to overcome the "juste retour" dilemma that currently hinders EU-level public goods provision.

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