The European Commission has introduced the Industrial Accelerator Act (IAA), which seeks to strengthen the competitiveness of the EU’s manufacturing sector, support decarbonization efforts and reduce dependency on low-cost imports. The proposed rules would establish local content and low-carbon requirements for public procurement and subsidies covering traditional materials — such as aluminium, cement and steel — alongside clean-tech products like wind turbines, electrolysers and electric vehicles.
Under the IAA, member states would have to ensure that by 2035 manufacturing accounts for 20% of the EU’s gross domestic output, up from around 14% today. The Commission projects that achieving this target could avert the loss of up to 600,000 automotive jobs over the next decade and secure or create an estimated 150,000 roles in other industries. Together, these sectors currently represent roughly 15% of EU manufacturing.
Commission Executive Vice-President Stephane Sejourne underscored the urgency of the plan: “If we do nothing, then it’s quite clear that very soon, 100% of clean-tech technology will be produced in China.…It’s quite possible that our cement, steel industries will be offshored completely in the next few years.” Critics warn that stringent local-content rules could prompt trading partners to retaliate, but backers note that major economies including the United States, China, Brazil and India already enforce similar measures.
The IAA would leverage more than €2 trillion in annual public procurement — roughly 14% of EU output — to strengthen domestic producers and stimulate growth in emerging sectors.
A key debate centers on which non-EU states will qualify as “trusted partners,” allowing their exports to count toward local-content thresholds. The Commission’s preliminary list includes countries with free-trade agreements or participation in the WTO Government Procurement Agreement, such as the United Kingdom, Canada and the United States, but excludes China.
The final version of the Act will be shaped by negotiations between the European Parliament and member-state governments. The proposal also includes tighter foreign direct investment rules for transactions exceeding €100 million from high-production nations, requiring at least 50% EU staffing, capping foreign ownership at 49% and mandating technology-transfer safeguards.
Source: Reuters, EU Commission
