On 4 March, the European Commission adopted a legislative proposal to increase demand for low-carbon, European-made technologies and products.
The Industrial Accelerator Act (IAA) will boost manufacturing, grow businesses, and create jobs in the EU, while supporting industry's adoption of cleaner, future-ready technologies.
In line with the recommendations of the Draghi report, the IAA introduces targeted and proportionate ‘Made in EU' and/or low-carbon requirements for public procurement and public support schemes.
These will apply to selected strategic sectors, notably in steel, cement, aluminium, cars and net-zero technologies, while establishing a framework that can be extended, where appropriate, to other energy-intensive sectors such as chemicals.
This will strengthen European production capacities and boost demand for European-made clean technologies and products.
The Act includes a requirement for Member States to set up a single digital permitting process to speed up and simplify manufacturing projects.
The IAA aims to increase value creation in the EU, strengthening its industrial base against the backdrop of growing global competition and increasing dependencies on non-EU suppliers in strategic sectors.
It therefore represents a strategy to support long-term economic growth, prosperity and security.
In 2024, manufacturing represented 14.3 per cent of EU GDP and therefore plays a vital role in Europe's economic resilience, innovation life cycle, and social fabric. The Act sets a goal to increase manufacturing's share of EU GDP to 20 per cent by 2035.
At the same time, the EU remains one of the world's most open markets and is committed to maintaining that openness as a key source of economic strength and resilience.
The proposal encourages greater reciprocity in public procurement, by providing equal treatment to countries that offer EU companies access to their markets.
While remaining open to foreign direct investment, the IAA establishes conditions for major investments in strategic sectors exceeding €100 million where a single third country controls more than 40 per cent of global manufacturing capacity.
Such investments, the Commission says, must create high-quality jobs, drive innovation and growth, and generate real value in the EU through technology and knowledge transfer, as well as compliance with local content requirements.
They must also guarantee a 50 per cent minimum level of European employment, ensuring businesses and citizens benefit alongside investors from access to the Single Market. In doing so, the IAA aims to strengthen EU economic security and reinforce supply chain resilience.
The proposed regulation will be negotiated by the European Parliament and the Council of the European Union before its adoption and entry into force.
Image courtesy of Shutterstock