The European Commission has adopted last March 4th a legislative proposal to increase demand for European low-carbon technologies and products. TheIndustrial Acceleration Act(IAA)will boost manufacturing, drive business growth and create jobs in the EU, while supporting industry’s adoption of cleaner, future-proof technologies.
In line with the recommendations ofthe Draghi report, the Industrial Acceleration Act (IAA) introduces specific and proportionate ‘Made in the EU’ or low-carbon requirements for public procurement and public support programmes. These requirements will apply to selected strategic sectors, in particular steel, cement, aluminium, automotive 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 capacity and boost demand for clean technologies and products manufactured in Europe. The Act includes an obligation for Member States to establish a single digital authorisation process to streamline and simplify manufacturing projects.
The Industrial Partnerships Act (IPA) aims to increase value creation in the EU by strengthening our industrial base in a context of growing unfair global competition and increasing dependence on non-EU suppliers in strategic sectors. It therefore represents a strategy to boost economic growth, prosperity and long-term security. In 2024, the manufacturing sector accounted for 14.3% of the EU’s GDP and therefore plays a vital role in Europe’s economic resilience, innovation cycle and social fabric. The Act sets the target of increasing the manufacturing sector’s share of EU GDP to 20%by 2035.
At the same time, the EU remains one of the most open markets in the world and is committed to maintaining this openness as a key source of economic strength and resilience. The proposal encourages greater reciprocity in public procurement, granting equal treatment to countries that offer EU companies access to their markets, in line with the Draghi report. The content of partners with whom the Union has concluded an agreement establishing a free trade area or a customs union, or who are party to the Agreement on Government Procurement, and where there are relevant obligations on the Union under that agreement, shall be considered as originating in the Union. In the case of other public interventions, in particular public programmes and auctions, partners may be included in the scope of the Agreement on Government Procurement if they have a free trade agreement or a customs union with the EU.
While remaining open to foreign direct investment, the Interinstitutional Agreement (IIA) sets conditions for significant investments in strategic sectors exceeding EUR 100 million, where a single third country controls more than 40% of global manufacturing capacity. Such investments 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 minimum level of50%European employment, ensuring that businesses and citizens benefit, alongside investors,from access to the Single Market. In this way, the IAA strengthensthe EU’s economic security and supply chain resilience.
The Industrial Acceleration Act builds on the strengths of the Single Market by:
Supporting leading markets for ‘Made in EU’ and low-carbon products
The Steel Partnership Act (IAA) introduces ‘Made in the EU’ and low-carbon preferences in public procurement and public support programmes to boost demand for European industrial products, from cement and aluminium to net-zero technologies such as batteries, solar, wind, heat pumps and nuclear. For steel, the Act proposes specific low-carbon preferences to generate demand in the market. This measure will provide confidence and predictability to investors, driving innovation and making clean steel a key component of the EU’s industrial future. The strategic use of public funds will support investments in the EU, thereby strengthening access to low-carbon products and protecting competitiveness.
Ensuring that foreign direct investment brings value to the EU
The EU remains an important destination for foreign direct investment (FDI), hosting almost a quarter of global FDI stock in 2024. To ensure that FDI strengthens EU supply chains, promotes technology transfer and supports the creation of quality jobs, the IAA introduces conditions for investments exceeding €100 million in emerging sectors such as batteries, electric vehicles, photovoltaics and critical raw materials.
Simplifying permits
As part of the Commission’s simplification programme, the IAA streamlines and digitises permit granting procedures for industrial projects. This includes the introduction of a digital one-stop shop with clear deadlines, as well as the principle of tacit approval at intermediate stages of the permit granting process for energy-intensive decarbonisation projects.
Boosting sustainable manufacturing
The IAA is introducing Industrial Acceleration Areas designed to facilitate industrial symbiosis and encourage the creation of clusters of clean manufacturing projects. The creation of these clusters will facilitate investment in essential energy infrastructure and promote area-level permitting. Projects in these areas will benefit from profiling with investors and skills development support.
Next steps
The proposed Regulation will be negotiated by the European Parliament and the Council of the European Union before its adoption and entry into force.
Background
This initiative is a proposal for a Regulation. It was announcedinlast year’sClean Industrial PactandJoint Communication on strengthening the EU’s economic security. It also follows up on theDraghi reportby generating EU demand for clean, EU-made products and key technologies through public procurement and support programmes.
Further information: European Commission
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