The European Commission has unveiled the Industrial Accelerator Act, a proposal designed to boost demand for low-carbon technologies produced in Europe and strengthen the EU’s industrial base.
The Industrial Accelerator Act introduces “Made in Europe” rules for public spending
The European Commission has presented a legislative proposal aimed at increasing demand for European low-carbon technologies and products. The Industrial Accelerator Act (IAA) seeks to strengthen manufacturing, support business growth and create new jobs in the EU while accelerating the adoption of cleaner industrial technologies.
In practice, when public money is spent to manufacture or purchase electric vehicles, wind turbines and other strategic technologies, a minimum share of those products will need to be produced in Europe.
The requirements vary depending on the technology:
- For solar panels, the inverter plus the cells, or equivalent parts, will have to be produced in Europe within three years.
- Electric vehicles purchased through public procurement must be assembled in the EU, and 70% of their components, excluding the battery, must be produced in Europe six months after the law enters into force.
- Aluminium purchased through public procurement must be at least 25% produced in Europe and low-carbon.
- A 5% requirement will apply to concrete and mortars.
- Steel will not have a minimum European production requirement but must be at least 25% low-carbon.
The draft proposal had also included a voluntary emissions label for steel to make low-carbon products more visible, but the measure was removed at the last minute.
In line with the recommendations of the Draghi report, the Industrial Accelerator Act introduces proportionate “Made-in-EU” and/or low-carbon requirements for public procurement and public funding. These rules apply to selected strategic sectors including steel, cement, aluminium, cars and net-zero technologies, with the possibility of extending the framework to other energy-intensive sectors such as chemicals.
The objective is to expand European manufacturing capacity and stimulate demand for cleaner technologies produced in Europe, reducing the continent’s dependence on Chinese supply chains. The proposal also requires Member States to establish a single digital permitting procedure to support manufacturing projects.
In 2024, manufacturing accounted for 14.3% of EU GDP. The proposal sets the target of increasing this share to 20% by 2035.
What counts as “Made in Europe”
The proposal encourages greater reciprocity in public procurement. Countries that provide EU companies access to their markets would receive equal treatment, in line with the Draghi report.
Products originating from countries with which the EU has concluded a free trade agreement or customs union, or that are parties to the WTO Government Procurement Agreement, may also be treated as EU origin in certain cases. For public tenders, non-EU partners may fall within the scope of the IAA if they have a free trade agreement or a customs union with the EU.
This point delayed the presentation of the proposal for months because Member States could not agree on how to define “Made in Europe”. Under the proposal, products originating from the 27 EU Member States, as well as Iceland, Liechtenstein and Norway, which are part of the single market, are automatically considered European. In addition, the EU will grant the same treatment to certain foreign countries under specific conditions.
To be eligible for inclusion in EU public procurement, a country must be among the 21 non-EU signatories of the World Trade Organization’s Government Procurement Agreement. For other types of public spending, the foreign country must have a trade agreement with the EU bloc.
The Industrial Accelerator Act also sets conditions for major investments exceeding €100 million in strategic sectors when a single third country controls more than 40% of global manufacturing capacity.
These investments must:
- create quality jobs,
- promote innovation and growth,
- generate real value in the EU through technology and knowledge transfer,
- comply with local content requirements.
They must also ensure at least 50% European employment, guaranteeing that companies and citizens benefit alongside investors from access to the single market.
Wind energy recognised as a strategic technology
The Industrial Accelerator Act identifies wind energy as a critical technology for Europe’s economic resilience and energy security.
“The EU has rightly identified wind energy as a strategic sector: industrial leadership in wind is in Europe’s strategic interest. We welcome this important political signal. Now it is crucial to ensure simple and harmonised implementation of the new rules,” said WindEurope CEO Tinne van der Straeten.
The wind industry is already strongly rooted in Europe, contributing €54 billion to EU GDP. The Act confirms that wind auctions will reward projects that are cost-competitive while also contributing to broader social objectives.
For example, all wind auctions would include a cybersecurity pre-qualification requirement, an important step to strengthen the resilience of the EU energy system.
The Industrial Accelerator Act will also take into account trusted partners. “The EU cannot act alone when it comes to producing clean technologies competitively. In the future it will be important to ensure that reliable partners such as the United Kingdom are treated on equal terms with EU countries,” added van der Straeten.
Uncertainty over what qualifies as a decarbonisation project
The proposal defines “energy-intensive decarbonisation projects” as those that significantly and permanently reduce CO₂ emissions to the extent technically possible. However, it does not include measurable emissions-reduction criteria or clear requirements for phasing out fossil fuels in line with EU climate and zero-pollution targets.
Other criticisms concern the lack of clarity in the proposal, which companies and Member States need to implement the rules effectively. The legislation does not define in sufficient detail the criteria for “Made in Europe” content or the decarbonisation standards required to ensure real market impact.
Some key elements remain vague, including what qualifies as European production or which products and technologies fall within the mandatory quotas.
Environmental organisations broadly support the direction taken by the Commission but warn that the phase-out of fossil fuels in European industry requires clearer rules and stronger safeguards. At the same time, the transition should not come at the expense of environmental protection.
One example raised by critics is that almost 45% of EU steel production already comes from lower-emission electric furnaces. A 25% low-carbon requirement could therefore simply confirm existing production models rather than drive a deeper decarbonisation of primary steel production.
Similarly, a 5% requirement for concrete would cover only a small share of low-carbon cement and may not significantly accelerate decarbonisation in the sector.
Riccardo Nigro, industry and zero-pollution policy expert at the European Environmental Bureau (EEB), commented: “This proposal offers the carrot for industrial decarbonisation, but lacks the stick. Without a strong and predictable carbon price and clear binding timelines to phase out fossil fuels, it will not work. The EU already has the technologies to end the fossil fuel era in steel, cement and beyond. What it needs are predictable rules: a strong carbon price, clear incentives, binding standards and robust environmental assessments. The IAA complements the existing framework with incentives, but on its own it will not trigger the transformation Europe needs.”
Industrial acceleration areas
The Industrial Accelerator Act introduces Industrial Acceleration Areas aimed at supporting clusters of sustainable manufacturing projects. These hubs are designed to facilitate essential investments in energy infrastructure.
The Commission proposes national industrial acceleration zones for projects considered strategic and of public interest. However, there is concern that broad exemptions could lead to rushed or insufficient environmental assessments.
Environmental assessments would be carried out for the area as a whole rather than for individual projects through aggregated permitting procedures.
Unlike the renewable acceleration areas introduced in EU legislation, these zones are not limited to specific technologies. As a result, aggregated assessments may not provide sufficient evidence for comprehensive evaluations or for project-specific mitigation measures, potentially weakening oversight. Speed should therefore not come at the expense of environmental safeguards.
Green steel and low-carbon concrete
The long-expected voluntary label for steel is not included in the Commission proposal. Instead, the EU executive plans to introduce secondary legislation under the EU Ecodesign framework.
According to the EEB, linking steel and cement labelling to the Ecodesign framework makes sense, as it already operates in other sectors and considers environmental impacts beyond greenhouse gas emissions. However, further delays may slow industrial progress.
NGOs are calling for a strong and mandatory label with clear sustainability criteria rather than voluntary or unclear schemes that risk weakening investment signals. Public funding, they argue, should support genuinely clean production rather than projects that maintain existing practices.
Next steps for the Industrial Accelerator Act
The Industrial Accelerator Act has been presented by the European Commission but must now be debated and approved by the European Parliament and EU Member States. During this process, governments may request amendments or revisions to the conditions proposed by Brussels.
