The European Commission has adopted a legislative proposal aimed at increasing demand for low-carbon, European-made technologies and products, in a move designed to strengthen the bloc’s industrial base and enhance economic security.
The proposed Industrial Accelerator Act (IAA) introduces targeted “Made in EU” and low-carbon requirements in public procurement and public support schemes across selected strategic sectors, including steel, cement, aluminium, automotive and net-zero technologies. The framework could later be extended to other energy-intensive industries such as chemicals.
Raising manufacturing to 20% of EU GDP
Aligned with the recommendations of the Draghi report, the initiative seeks to stimulate domestic manufacturing, create high-quality jobs and accelerate the adoption of cleaner technologies. In 2024, manufacturing accounted for 14.3% of EU GDP, and the Commission has set a target to raise this share to 20% by 2035.
The Act aims to increase value creation within the EU at a time of growing global competition and rising dependencies on non-EU suppliers in strategic sectors.
New rules for foreign investment
While maintaining openness to foreign direct investment (FDI), the IAA establishes conditions for major investments exceeding €100 million in strategic sectors where a single third country controls more than 40% of global manufacturing capacity.
Such investments must generate tangible value in the EU, including technology transfer, compliance with local content requirements and a minimum of 50% European employment. The Commission argues that these provisions will reinforce supply chain resilience and strengthen economic security.
Boosting demand for low-carbon technologies
The proposal introduces low-carbon preferences in public procurement, particularly in sectors such as steel, to stimulate demand for clean production. Strategic use of public funds is expected to support European-made technologies including batteries, solar, wind, heat pumps and nuclear energy, providing investors with greater predictability.
Simplifying and digitalising permitting
As part of its simplification agenda, the Commission is calling for the creation of a single digital “one-stop-shop” permitting system in each Member State. The regulation also introduces clear time limits and tacit approval mechanisms at intermediate stages of the process for energy-intensive decarbonisation projects.
The IAA also establishes Industrial Acceleration Areas aimed at fostering industrial symbiosis and clustering of clean manufacturing projects. These zones are designed to facilitate infrastructure development, coordinated permitting and investor engagement, while supporting skills development.
Although the EU remains committed to open markets, the proposal promotes reciprocity in public procurement, granting equal treatment to countries that provide EU companies with similar access. Partners with free trade agreements or customs unions with the EU may also fall within the scope of the regulation.
The proposed Regulation will now be negotiated by the European Parliament and the Council before potential adoption and entry into force.