Against a backdrop of geopolitical uncertainty and increasing global competitive pressure, particularly from China, the IAA represents a European response to these developments. Key themes of the IAA include “Made in EU” regulations, stricter foreign investment controls and faster approval procedures. The European Commission aims to increase industry’s share of European GDP from around 14 % to 20 % by 2035. The proposed legislative act is a high political priority. Negotiations are expected to be concluded by the end of 2026.

Made in Europe and low-carbon products

The main tool for strengthening European industry are ‘Made in EU' and low-carbon requirements, whereby its focus is on public procurement policy and public support schemes. When governments purchase or subsidises goods or services, public funds should be used to support European value creation and employment. To prevent costs from rising excessively, the proposal includes a so-called ‘escape clause.’ If ‘Made in EU’ products exceed the most economically advantageous tender by more than 25 %, the contracting authority may also award the contract to a tenderer from a non-EU country. However, “Made in EU” encompasses not only the 27 EU Member States, but also those countries with which the EU has concluded trade agreements. The focus is primarily on strategic sectors and net-zero technologies, identified in the IAA as being particularly relevant to European competitiveness. The proposal identifies the steel, cement, aluminium and automotive industries as strategically relevant sectors, and highlights key technologies such as batteries, solar and wind energy, heat pumps and nuclear energy.

Faster approval procedures and restrictions on foreign investment

The IAA is aimed at speeding up approval procedures for industrial projects by streamlining and digitising them. This will be supported by a central digital point of contact for businesses. To regulate foreign direct investment, the IAA imposes certain conditions on investments of 100 million euros or more in specific sectors, such as batteries, electric cars, photovoltaics or critical raw materials. Foreign investments above €100 million by companies originating in countries that hold more than 40% of global production capacities in these sectors will only be approved if four out of six conditions are met, for example, the obligation to share knowhow with European companies. It is also stipulated that at least half of the jobs created by the investment must be filled by workers from the EU.

AK calls for improvements

In principle, AK welcomes Europe’s clear stance on industrial policy but still sees considerable room for improvement. For instance, a problem with the current structure of ‘Made in EU’ is that social conditionalities are not sufficiently embedded in public procurement. In addition, insufficient attention is given to training skilled workers, leaving the social dimension in a secondary role overall. Faster approval procedures for industrial projects are generally a positive development, provided that this acceleration is achieved through adequate staffing and resources within the relevant authorities, rather than by eroding public participation rights and protection standards. Whilst the planned safeguard against problematic foreign direct investment is urgently needed, the proposed threshold of 100 million euros appears too high given the corporate structure in many growth sectors.

Moreover, with regard to both the ‘Made in EU’ initiative and the handling of foreign direct investment, European infrastructure, industrial capacity, technologies and expertise should not be limited solely to the sectors identified by the European Commission. Instead, other strategically important sectors such as the rail industry, hydropower, semiconductors and digital infrastructure should also be included.

Further information

EU Commission: Commission proposes Industrial Accelerator Act to strengthen industry and create jobs in Europe
AK EUROPA: Made in Europe. Opportunities and challenges for the Single Market
AK EUROPA: Industrial policy in the European Union – Towards a forward-looking agenda
AK EUROPA: Progressive industrial policy for the twin transformation
A&W-Blog: Beschleunigen, Beschaffen, Beschützen – Chancen und Widersprüche des EU-Industrial Accelerator Act (German only)
The AK position paper on the Industrial Accelerator Act will be available here shortly