The article examines the concept of green industrial policy in the European Union under the European Green Deal, which aims to achieve climate neutrality by 2050. While the Green Deal emphasizes climate targets, it has not fully addressed economic and social sustainability. The EU has reassessed its approach in light of the US Inflation Reduction Act and China's influence in clean technology value chains. The study explores the historical evolution of European industrial policy, evaluates current proposals by the European Commission, and proposes principles and recommendations for effective green industrial policy. The transition from brown to green economies is a major socio-economic transformation, requiring urgent policy action. The European Green Deal aims to make Europe the first climate-neutral continent by 2050, with a 55% reduction in greenhouse gas emissions by 2030. However, achieving this requires not only climate targets but also economic and social sustainability. Green industrial policy is crucial to ensure a smooth transition that benefits all stakeholders. The COVID-19 pandemic and the war in Ukraine have highlighted the need for energy security and strategic autonomy. The EU's REPowerEU plan aims to transition to clean energy, diversify energy supplies, and improve strategic autonomy. The US Inflation Reduction Act and China's assertiveness in clean technology value chains have prompted the EU to strengthen its green industrial policy through the Net Zero Industry Act. The EU is now in a strong position to lead the global green transition, with COP28 reinforcing the need for climate action. The EU has set ambitious targets for renewable energy and energy efficiency. The article suggests that the EU should lead by example, implementing the Green Deal while preserving its socio-economic model. It outlines principles for green industrial policy and provides recommendations for more effective policy implementation in Europe.The article examines the concept of green industrial policy in the European Union under the European Green Deal, which aims to achieve climate neutrality by 2050. While the Green Deal emphasizes climate targets, it has not fully addressed economic and social sustainability. The EU has reassessed its approach in light of the US Inflation Reduction Act and China's influence in clean technology value chains. The study explores the historical evolution of European industrial policy, evaluates current proposals by the European Commission, and proposes principles and recommendations for effective green industrial policy. The transition from brown to green economies is a major socio-economic transformation, requiring urgent policy action. The European Green Deal aims to make Europe the first climate-neutral continent by 2050, with a 55% reduction in greenhouse gas emissions by 2030. However, achieving this requires not only climate targets but also economic and social sustainability. Green industrial policy is crucial to ensure a smooth transition that benefits all stakeholders. The COVID-19 pandemic and the war in Ukraine have highlighted the need for energy security and strategic autonomy. The EU's REPowerEU plan aims to transition to clean energy, diversify energy supplies, and improve strategic autonomy. The US Inflation Reduction Act and China's assertiveness in clean technology value chains have prompted the EU to strengthen its green industrial policy through the Net Zero Industry Act. The EU is now in a strong position to lead the global green transition, with COP28 reinforcing the need for climate action. The EU has set ambitious targets for renewable energy and energy efficiency. The article suggests that the EU should lead by example, implementing the Green Deal while preserving its socio-economic model. It outlines principles for green industrial policy and provides recommendations for more effective policy implementation in Europe.