European Commission unveils Industrial Accelerator Act to boost local markets

The thrust of the proposed Act is to grow EU industry and create jobs by introducing “targeted and proportionate” ‘Made in EU' and/or low-carbon requirements for public procurement and public support schemes.

These would initially apply to a few selected sectors considered the most strategically important, i.e., steel, cement, aluminium, vehicles, and net-zero technologies, including solar PV, wind power, batteries, and heat pumps, with the potential for extension to other energy-intensive sectors such as chemicals.

This is intended to strengthen European production capacities and boost demand for European-made clean technologies and products, while also preserving and creating around 150,000 jobs in these sectors.

For example, low carbon requirements are introduced for steel in the automotive and construction sectors, while ‘Made in EU' and low carbon requirements apply to the cement used in construction and the aluminium used in automotive and construction, when subject to public procurement.

The Industrial Accelerator Act also introduces ‘Made in EU’ requirements for nuclear fission and hydrogen.

“Today marks a major step in the renewal of the European economic doctrine so the Union is fit for the 21st century,” commented Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy.

“Facing unprecedented global uncertainty and unfair competition, European industry can count on the provisions of this Act to boost demand and guarantee resilient supply chains in strategic sectors. It will create jobs by directing taxpayers’ money to European production, decreasing our dependencies and enhancing our economic security and sovereignty.”

European Commissioner for Climate, Net-Zero and Clean Growth, Wopke Hoekstra, emphasised on LinkedIn that the EU is and remains an open economic block. However, he said that "we can’t ignore the new geopolitical realities. We need to stand up more strongly for our own interests. Today’s new proposal is another step towards building more robust and clean industries, securing our supply chains and protecting our economic security."

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The Act, initially mooted in the competitive compass of January 2025 and subsequently the clean industrial deal – although with the later dropped ‘decarbonisation’ in the title – sets the goal to increase manufacturing's share of EU GDP to 20% by 2035, up from 14.3% in 2024.

It proposes requiring member states to set up a ‘European business wallet’ as a single digital process to speed up and simplify permitting procedures for industrial projects.

The Act also sets conditions for major investments exceeding €100 million in batteries, EVs, solar PV and critical raw materials where a single third country controls more than 40% of global manufacturing capacity.

With the intention to add value for the EU economy, these include a minimum 50% level of European employment along with conditions related to local content, ownership, knowledge and technology transfer and R&D activities.

The other main aspect of the proposed Act is the introduction of ‘industrial acceleration areas’ in member states, designed to enable industrial symbiosis and encourage the creation of clean manufacturing project clusters.

The intention is that the creation of such clusters will facilitate essential energy infrastructure investments and promote area-wide permits with the greater investor certainty they should engender.

Industry reaction

Initial reaction to the proposals has been positive with caveats.

Bruce Douglas, CEO of the Global Renewables Alliance, described it as a “political signal” that faster permitting and long-term contracts are needed to incentivise investments in clean technologies and to deliver on its promise must also translate into faster renewable deployment – hand in hand with accelerated grid expansion and flexibility solutions.

“Europe cannot decarbonise its energy-intensive industries and stay competitive without renewable energy.”

WindEurope CEO Tinne van der Straeten highlights the identification of wind energy as a strategic sector, stating that industrial leadership in wind is in Europe’s strategic interest, adding: “Now a simple and harmonised implementation of the new rules is crucial.”

The Electrification Alliance said the Act marks an important milestone in Europe’s industrial and clean energy policy.

“The creation of industrial clusters with streamlined permitting, as well as the emphasis on supporting projects in sectors that boost electrification, such as EVs, solar PV and critical raw materials, will give a direct boost to electrification,” said Alliance director Adrian Hiel.

Hydrogen Europe, in a statement, said that while the measures of the act point in the right direction, they require substantial improvement, as the scope requirements have been significantly reduced compared with earlier drafts.

“As the proposal enters the co-decision phase, we call on co-legislators to strengthen the Act and close the gaps on ambition, scope and clarity,” said Jorgo Chatzimarkakis, CEO of Hydrogen Europe.

Among the several points raised, Hydrogen Europe states that strategic sectors such as hydrogen, its derivatives, fertilisers and e-fuels receive limited direct benefits, mostly confined to permitting, while stronger demand side measures are needed to create lead markets.

The next step for the proposed act is its negotiation by the European Parliament and the Council of the European Union before its adoption and entry into force.