Industrial Accelerator Act: the EU plan to boost low-carbon manufacturing
The European Commission has introduced a legislative proposal designed to increase demand for European low-carbon technologies and products. Known as the Industrial Accelerator Act, the initiative aims to strengthen the continent’s manufacturing base, support business growth and create new jobs while accelerating the adoption of cleaner industrial technologies.
In practical terms, the proposal establishes that when public funds are used to manufacture or purchase strategic technologies such as electric vehicles or wind turbines, a minimum share of those products must be made in Europe.
Local production requirements by technology
The requirements vary depending on the technology and industrial sector.
- For solar panels, the inverter and the cells, or equivalent components, must be produced in Europe within three years.
- Manufacturers of electric vehicles purchased through public procurement will have to ensure the vehicles are assembled in the European Union and that 70% of their components, excluding the battery, are produced in Europe within six months after the law enters into force.
- For aluminum bought through public procurement, at least 25% must be produced in Europe and have low carbon emissions.
- The proposal also introduces a 5% requirement for concrete and mortars with lower emissions.
- For steel, there is no minimum European production quota, but at least 25% must be low-carbon steel.
- An earlier draft of the proposal also included a voluntary emissions label for steel to make low-carbon products more visible, but this provision was removed at the last minute.
In line with the recommendations of the Draghi report, the Industrial Accelerator Act introduces proportional “Made in EU” and low-carbon requirements for public procurement and public funding in selected strategic sectors, including steel, cement, aluminum, automotive manufacturing and net-zero technologies. The framework could later be expanded to other energy-intensive sectors such as chemicals.
The overall goal is to expand European manufacturing capacity and stimulate demand for cleaner technologies produced within the bloc, reducing dependence on Chinese supply chains. The proposal also requires Member States to establish a single digital permitting procedure to speed up approvals for manufacturing projects.
In 2024, manufacturing accounted for 14.3% of the EU’s GDP. The proposal sets a target of increasing that share to 20% by 2035.
What qualifies as “Made in Europe”
The Industrial Accelerator Act also seeks greater reciprocity in public procurement. Countries that allow European companies access to their markets could receive equivalent treatment within EU public tenders.
Products coming from partners with which the European Union has a free trade agreement, customs union, or that are parties to the World Trade Organization’s Government Procurement Agreement, may also be treated as EU-origin for procurement purposes.
This issue delayed the proposal’s release for months because Member States disagreed on how to define “Made in Europe”.
Under the current proposal, products from the 27 EU Member States, along with Iceland, Liechtenstein and Norway, which are part of the single market, are automatically considered European. The EU may also grant equivalent treatment to certain foreign countries under specific conditions.
To participate in EU public procurement, a country must be among the 21 non-EU signatories of the WTO Government Procurement Agreement. For other forms of public spending, the partner country must have a trade agreement with the EU.
Investment conditions for strategic sectors
The Industrial Accelerator Act sets conditions for large investments exceeding €100 million in strategic sectors where a single third country controls more than 40% of global manufacturing capacity.
These investments must create quality jobs, promote innovation and growth, and generate tangible value within the EU through technology transfer and knowledge sharing, while complying with local content requirements.
In addition, such projects must guarantee at least 50% European employment, ensuring that both companies and citizens benefit from access to the EU’s single market.
Wind power’s role in the Industrial Accelerator Act
The Industrial Accelerator Act identifies wind energy as a critical technology for Europe’s economic resilience and energy security.
“The EU has rightly identified wind power as a strategic sector. Industrial leadership in wind energy is in Europe’s strategic interest. We welcome this important political signal. Now it is essential that the new rules are implemented simply and consistently,” said Tinne van der Straeten, CEO of WindEurope.
Europe’s wind industry is already firmly rooted in the region, contributing €54 billion to EU GDP.
The new rules confirm that wind auctions will reward projects that are not only cost-competitive but also aligned with broader social objectives. For example, all wind auctions would include a cybersecurity pre-qualification requirement, a measure intended to strengthen the resilience of Europe’s energy system.
The framework will also consider trusted international partners. “The EU cannot act alone when it comes to producing clean technologies competitively. In the future, it is important to ensure that reliable partners such as the United Kingdom are treated on equal terms with EU countries,” van der Straeten added.
Uncertainty around decarbonization criteria
The Industrial Accelerator Act defines energy-intensive decarbonization projects as initiatives that significantly and permanently reduce CO₂ emissions to the maximum technically feasible extent.
However, the proposal lacks clear and measurable criteria for emissions reductions and the phase-out of fossil fuels aligned with EU climate and zero-pollution targets.
Criticism of the proposal also centers on the lack of clarity needed by companies and Member States to implement the rules effectively. Many industry associations argue that the proposal does not sufficiently define what qualifies as “Made in Europe” content or which technologies fall under mandatory quotas.
Environmental organizations have broadly welcomed the direction of the proposal but warn that the European industry’s transition away from fossil fuels will require stronger rules and clearer standards, without weakening environmental protections.
One criticism is that nearly 45% of EU steel production already comes from lower-emission electric furnaces. A 25% requirement could therefore simply confirm existing production patterns rather than drive deeper decarbonization of primary steelmaking.
Similarly, the 5% requirement for concrete would cover only a small share of low-carbon cement and may not meaningfully accelerate decarbonization in the sector.
Riccardo Nigro, industrial policy and zero-pollution expert at the European Environmental Bureau, said: “This proposal offers the carrot for industrial decarbonization but lacks the stick. Without a strong and predictable carbon price and clear binding timelines for phasing out fossil fuels, it will not work.”
“The EU already has the technologies to end the fossil fuel era in steel, cement and beyond. What it needs are predictable rules, a strong carbon price, clear incentives, binding standards and robust environmental assessments. The Industrial Accelerator Act adds incentives to the existing framework, but on its own it will not trigger the transformation Europe needs,” he added.
Industrial acceleration areas
The proposal introduces industrial acceleration areas, designed to facilitate clusters of sustainable manufacturing projects and encourage investment in energy infrastructure.
Member States would designate national zones for projects considered strategic and of public interest. However, critics warn that such mechanisms could lead to broad exemptions and rushed environmental assessments.
Under the proposal, environmental assessments could be conducted for the entire area rather than for individual projects, through aggregated permitting procedures.
Unlike renewable acceleration areas already included in EU legislation, these zones would not focus on specific technologies. As a result, aggregated assessments may not provide sufficient evidence for thorough project evaluations or appropriate mitigation measures, potentially weakening oversight.
In this context, critics argue that speed should not come at the expense of environmental safeguards.
Green steel and low-carbon cement
The expected voluntary emissions label for steel is not included in the current proposal. Instead, the European Commission plans to address the issue through secondary legislation within the EU’s Ecodesign framework.
According to the European Environmental Bureau, linking labeling for steel and cement to Ecodesign rules makes sense because the framework already works in other sectors and considers environmental impacts beyond greenhouse gas emissions.
However, further delays may not help industry players seeking clear signals.
Environmental organizations are calling for a strong and mandatory label with clear sustainability criteria, arguing that voluntary schemes risk weakening investment and channeling public funding toward projects that maintain existing industrial practices rather than enabling genuine decarbonization.
Next steps for the Industrial Accelerator Act
The Industrial Accelerator Act has been presented by the European Commission, but it must still be debated and approved by both the European Parliament and EU Member States.
As a result, governments may seek to modify or renegotiate several aspects of the proposal before the legislation becomes law.