EU Commission Proposes Long-Awaited Industrial Accelerator Act to Strengthen EU Industry
On March 4, 2026, the EU Commission released the long-anticipated proposal for its Industrial Accelerator Act designed to reinforce the European Union's manufacturing industry in response to recent extensive public support initiatives for domestic industries in China and the United States.
The Industrial Accelerator Act (the "IAA"), which sets the ambitious target of increasing manufacturing's share of EU GDP to 20% by 2035, is presented as a key component of the Clean Industrial Deal, announced in February 2025 to boost EU competitiveness and support decarbonization of energy-intensive industries. In a nutshell, the IAA would:
- Introduce "Made in EU" criteria and/or low-carbon requirements in public procurement and public support schemes for manufacturing industries within the European Union. These requirements target strategic sectors—including steel, aluminum, and cars—as well as certain clean-technology products and components, such as batteries, solar photovoltaic, and wind technologies. They are intended to support EU clean and strategic industrial products by requiring contracting authorities to mandate minimum shares of low-carbon and/or EU-origin materials in public contracts. The IAA would also introduce minimum "Made in EU" and/or low-carbon requirements as a condition for eligibility for certain public support schemes, including those for electric, hybrid electric, and fuel cell vehicles. Additionally, the IAA would introduce cybersecurity prequalification criteria for certain net-zero technology auctions, such as wind auctions, and cybersecurity requirements for certain public procurement. These would come in addition to the cybersecurity high-risk supplier scheme for information and communication technology supply chains proposed in the review of the Cybersecurity Act.
- Establish additional scrutiny for large foreign investments in strategically sensitive manufacturing sectors. Investments exceeding €100 million in strategic sectors—batteries, solar PV, electric vehicles, and critical raw materials—by investors from third-countries controlling more than 40% of global manufacturing capacity in a relevant sector would be subject to a specific foreign direct investment ("FDI") regime. Under this regime, investors would need to obtain prior approval from national authorities, which would require satisfying at least four of six strict conditions, including a 49% cap on foreign ownership, a mandatory requirement that at least 50% of the workforce be EU-based, and obligations to transfer intellectual property and know-how to EU entities. This will add a new layer of mandatory filing for global M&A deals and greenfield investments, in addition to merger control, national FDI reviews, and foreign subsidy regulation.
- Simplify and accelerate the permitting process for industrial manufacturing and decarbonization projects, including through a single digital permitting process at the national level, clear maximum timelines for administrative decisions, and tacit approvals at the intermediary stages of the permitting process.
The IAA will now proceed through the ordinary legislative procedure, with timing not yet specified. Further discussions and amendments are therefore expected. In the meantime, businesses should monitor developments and proactively engage in the legislative process. They should also evaluate how the IAA may affect their operations, including their access to public procurement opportunities, M&A deals, and support schemes.
