The European Commission has officially presented the Industrial Accelerator Act (IAA), a legislative initiative designed to strengthen Europe’s industrial base while increasing demand for low-carbon and European-made technologies and products.
The proposal aims to stimulate manufacturing activity, support business growth and job creation, and accelerate the adoption of cleaner industrial technologies across the European Union.
The proposed regulation will now be examined and negotiated by the European Parliament and the Council of the European Union before it can be formally adopted and enter into force.
“Made in EU” and low-carbon criteria for strategic sectors
In line with recommendations from the Draghi report, the legislation introduces targeted “Made in EU” and/or low-carbon requirements in public procurement and public support schemes.
These provisions will initially apply to key strategic sectors including steel, cement, aluminum, automotive and net-zero technologies. The framework may later be expanded to additional energy-intensive industries such as chemicals.
To facilitate industrial investment, the Act also requires EU member states to establish a single digital permitting system aimed at simplifying and accelerating approval procedures for industrial projects.
Strengthening Europe’s industrial competitiveness
The initiative comes as the EU seeks to strengthen its industrial competitiveness amid growing global competition and increasing reliance on non-EU suppliers in strategic sectors.
Manufacturing currently accounts for approximately 14.3 percent of EU GDP, and the European Commission has set a target of increasing this share to 20 percent by 2035.
While promoting stronger domestic production capacity, the EU has reiterated that it remains committed to maintaining open markets as a key driver of economic resilience and growth.
Reciprocity rules in international procurement
The Act also introduces provisions intended to ensure greater reciprocity in international public procurement.
Countries that grant EU companies access to their public markets would receive equal treatment within the EU framework. Products originating from partners that maintain free trade agreements, customs unions or participation in the WTO Government Procurement Agreement with the EU would be treated as having Union origin. For other public support schemes and auctions, additional partner countries may also be included if they maintain trade agreements or customs unions with the EU.
Rules for large foreign investments in strategic sectors
The proposal establishes additional conditions for large foreign direct investments in strategic industries where a single third country controls more than 40 percent of global manufacturing capacity.
Investments exceeding €100 million would be required to contribute to the EU economy through innovation, technology transfer and knowledge sharing while complying with local content rules. Such projects must also guarantee at least 50 percent European employment to ensure that the economic benefits remain within the EU.
Creating lead markets for low-carbon materials
A central objective of the Industrial Accelerator Act is the creation of lead markets for low-carbon products produced in Europe. The legislation introduces preferences for “Made in EU” and low-carbon products in public procurement and public support schemes across sectors including cement, aluminum and net-zero technologies such as batteries, solar panels, wind turbines, heat pumps and nuclear energy. For the steel sector specifically, the proposal includes dedicated low-carbon preferences designed to create predictable demand, strengthen investor confidence and position clean steel as a core element of Europe’s industrial transition.
In addition, the legislation foresees the establishment of Industrial Acceleration Areas intended to promote industrial symbiosis and cluster development for clean manufacturing projects. These zones are expected to facilitate shared infrastructure, streamline permitting and improve access to investment and workforce skills.