The European Commission has introduced the proposed Industrial Accelerator Act (IAA), a policy package designed to strengthen Europe’s industrial base while accelerating the deployment of low-carbon technologies across key sectors.

The proposal introduces “made-in-EU” and low-carbon requirements for strategic technologies including batteries, solar panels, wind turbines, heat pumps and nuclear equipment. The initiative aims to expand domestic manufacturing capacity for technologies critical to the energy transition while reducing Europe’s reliance on imports.

The Commission estimates that the Industrial Accelerator Act could help cut more than 30 million tonnes of carbon dioxide emissions in energy-intensive industries, while generating up to €10.5 billion in value across the automotive supply chain and more than €600 million across the steel, aluminum and cement sectors.

 

Strengthening Europe’s Industrial Competitiveness

 

The Industrial Accelerator Act forms part of the EU’s broader clean industrial strategy that began with the launch of the Clean Industrial Deal. The proposal also reflects recommendations from the influential competitiveness review led by former European Central Bank president Mario Draghi, which called for stronger industrial policy tools to support Europe’s clean technology industries.

According to the Commission, the policy focuses on sectors that are both strategically important to Europe’s economy and central to decarbonization efforts. These sectors include technologies used across construction, energy systems, transport and defense supply chains.

At the same time, European industry faces mounting competitive pressure as global manufacturing capacity for clean technologies becomes increasingly concentrated outside the EU. In particular, the Commission noted that China currently controls more than 80 percent of global manufacturing capacity for technologies such as batteries and solar photovoltaic components.

 

Read more: China’s New Five-Year Plan Will Shape The Pace Of Global Climate Action

 

“Made-in-EU” Rules For Clean Technologies

 

A key element of the proposal introduces “made-in-EU” requirements in public procurement for a wide range of clean technologies. These include battery systems, battery energy storage systems, solar panels, wind technologies, heat pumps, electrolyzers, nuclear equipment, electric vehicles and related components.

The rules are intended to create stronger domestic demand for European-manufactured technologies and help scale up local supply chains.

Under the proposed framework, products manufactured in countries that have free trade agreements or customs unions with the EU would also qualify under the “made-in-EU” definition.

The proposal also introduces low-carbon requirements for industrial materials. Steel used in automotive and construction sectors would need to meet specific emissions thresholds, while both aluminum and cement would face combined “made-in-EU” and low-carbon criteria.

 

Addressing Supply Chain Risks And Market Barriers

 

The Commission said the Industrial Accelerator Act addresses several structural challenges currently facing Europe’s industrial transition. These include supply chain vulnerabilities in critical technologies, limited market demand for low-carbon industrial products, and slow permitting processes that delay industrial decarbonization projects.

To address these barriers, the package proposes new rules requiring member states to establish a single digital permitting system to accelerate approvals for industrial decarbonization projects.

The proposal also introduces the concept of Industrial Acceleration Areas, which would create regional clusters for clean manufacturing projects. These zones would help streamline permitting while enabling coordinated investments in energy infrastructure and industrial facilities.

In addition, the plan introduces new screening conditions for foreign investments exceeding €100 million in strategic sectors such as electric vehicles, batteries, solar manufacturing and critical raw materials. The measures would apply to companies headquartered in countries controlling more than 40 percent of global manufacturing capacity in those industries.

 

Explore OneStop ESG Marketplace: Regulation and Compliance

 

Next Steps For The Proposal

 

The Industrial Accelerator Act will now be submitted to the European Parliament and the Council of the European Union for negotiation before it can be formally adopted.

European Commissioner for Climate, Net-Zero and Clean Growth Wopke Hoekstra said the initiative reflects the EU’s response to a changing geopolitical environment and growing competition in clean technology manufacturing.

He added that strengthening domestic clean industries and securing supply chains will be essential for maintaining Europe’s economic resilience while achieving its long-term climate goals.