The European Commission wants to strengthen European industry with a new legislative proposal. The Industrial Accelerator Act (IAA) mandates the use of products from Europe in public tenders.
Whereas the manufacturing industry still accounted for 14.3% of European GDP in 2024, this should rise to 20% by 2035. The IAA should enable this growth, focusing on three pillars: public tenders, faster permits and conditions to foreign investors.
Public tenders
From now on, governments will have to prioritise European products with low carbon emissions in procurement. Think of steel for cars and construction projects, cement, aluminium, but also solar panels, batteries and hydrogen technology. In this way, the European Commission wants to ensure that taxpayers' money supports European jobs and businesses.
Faster permits for industrial projects
Slow authorisation procedures are a well-known stumbling block in industrial projects. The IAA wants to speed up procedures by focusing on digitalisation. There will also be a maximum lead time of 18 months for crucial projects, such as the greening of steel plants. So-called Industrial Acceleration Areas are also designated to develop into strategic industrial clusters. These areas will also be subject to accelerated procedures.
Conditions to foreign investors
Non-European companies that want to invest more than €100 million and come from countries with more than 40% market share in the global production of electric vehicles (EVs), batteries, solar panels and critical raw materials will have to meet new requirements under the IAA. These relate to European majority ownership, technology transfer and local employment.
Three core sectors
The Industrial Accelerator Act (IAA) focuses on three core sectors, which will receive extra protection and incentives for different reasons. Through targeted investments and protection measures, the EU hopes to strengthen its position in these key areas.
Heavy industry, including steel, cement and aluminium, is an initial focus area. These sectors are not only energy-intensive, but also under pressure from competition from countries such as China and the United States. By protecting heavy industry, the EU aims to preserve 85,000 jobs and generate €600 million in additional economic value by 2030.
Another core sector is the automotive industry. Europe is heavily dependent on Asian batteries and components, with the risk of knowledge and jobs shifting abroad. With measures, the EU aims to strengthen Europe's supply chain, leading to €10.5 billion in additional value and 58,000 new jobs in battery production.
Finally, the focus is on green technology, such as solar panels, wind turbines, heat pumps and hydrogen technology. Europe lags behind other global players in these areas, and the IAA should ensure that production of these strategic technologies is scaled up more quickly. This should make Europe less dependent on imports and accelerate the energy transition.
'EU remains one of the most open markets in the world'
The European Commission stresses that the European Union remains one of the most open markets in the world and wants to continue using openness as a source of economic strength and resilience. "The proposal encourages greater reciprocity by offering equal treatment in public procurement and other forms of government support to countries that give European companies access to their markets through trade agreements. Companies from those countries thereby benefit from the same conditions as products made in the EU," the European Commission wrote in a note.
"Made in EU" requirements thus do not unduly restrict market access or consumer choice, but ensure that taxpayers' money benefits European companies and workers. The measures are targeted and proportionately designed to create demand in strategic European value chains, giving investors certainty and avoiding critical dependencies. At the same time, this keeps the EU in line with its international obligations and open to fair international trade and investment."
Limitations
The drafting of the Act has been fraught with difficulty and has led to much debate. For instance, France was strongly opposed to the Made in Europe obligation, while other countries such as Germany feared criticism from partner countries.
There are also concerns about the impact of the plans on the cost of products. To prevent this, it is stipulated that if products become too expensive, the Made in Europe obligation will lapse.
