The Industrial Accelerator Act and the new European industrial architecture

The European Commission has once again postponed, to 4 March, the presentation of the Industrial Accelerator Act (IAA), one of the most significant initiatives of the current European political cycle. More than a sectoral regulation, the IAA constitutes a structural pillar of the EU’s new industrial architecture, directly linked to the Clean Industrial Deal and the European Economic Security Strategy. It is not merely about accelerating decarbonisation, but about doing so while strengthening Europe’s productive capacity, reducing strategic dependencies and using the regulatory and financial power of the 27 as an instrument of industrial sovereignty.

The leaked draft reported by several European media outlets reflects a diagnosis that runs through Brussels’ recent communications: European industry has lost relative weight in recent decades, while the green and digital transition is unfolding amid growing geoeconomic rivalry. Europe’s share of global industrial value added has declined significantly since the beginning of the century. At the same time, more than 80% of certain key manufacturing capacities, such as battery and solar component production, are concentrated in third countries, according to a report by the International Energy Agency. In this context, the IAA sets an explicit and politically ambitious target: manufacturing should account for at least 20% of EU GDP by 2035.

This approach marks a shift from the original European Green Deal. The Clean Industrial Deal does not abandon climate objectives but adds a further dimension: the green transition must consolidate Europe’s industrial base rather than erode it. The IAA translates this ambition into concrete regulatory instruments affecting public procurement, national support schemes, foreign investment and the territorial organisation of industrial activity.

The Made in Europe clause as value chain reinforcement

One of the central pillars of the draft IAA is the European preference, known as Made in Europe. This clause is also behind the delay in negotiations. Brussels proposes introducing European content requirements in strategic areas, particularly in public procurement, net-zero technology auctions and certain support schemes. In sectors identified as critical – batteries, solar photovoltaic systems, wind technologies, heat pumps, components for transport electrification, nuclear energy and energy storage – progressive targets are set for European manufacturing and origin of key components.

For battery storage systems, for example, the draft foresees that in an initial phase they must be assembled within the EU and incorporate specific critical components of European origin. In later phases, elements such as cells, cathode active materials or battery management systems would increasingly need to be manufactured in Europe. In solar photovoltaics, specific requirements are established for inverters and other core components. In wind technologies, certain structural or control components would need to originate within the EU in rising proportions. In nuclear energy, requirements are envisaged for several critical components in new installations. This logic also extends to grid technologies and electrification.

In practical terms, the Made in Europe clause does not simply mean final assembly within EU territory. It implies strengthening entire segments of the value chain, from the production of materials and intermediate components to final assembly and deployment. The Commission links this approach to the need to prevent European public investment from reinforcing highly concentrated external supply chains. Access to certain markets financed or supported with EU public resources would therefore be conditional on meeting content and origin requirements.

A key debate for the next EU Multiannual Financial Framework

This approach has triggered intense debate. Several business organisations and interest groups have called for a rigorous assessment of the economic consequences of Made in Europe requirements, warning of potential cost increases, distortions in integrated value chains and risks to the global competitiveness of European firms. Targets for critical components could also affect jobs in factories located within the EU itself.

As a result, the IAA has become one of the most sensitive elements in negotiations on the next Multiannual Financial Framework (MFF) and the architecture of the future European Competitiveness Fund (ECF). The Executive Vice-President for Prosperity and Industrial Strategy, Stéphane Séjourné, has sent a letter to companies and industrial stakeholders seeking explicit support for an approach that strengthens European industrial and technological sovereignty at a crucial moment for defining the new financial framework.

The debate, however, goes beyond an ideological discussion about openness versus strategic autonomy. It has concrete implications for Europe’s industrial structure, investment location decisions, the design of financial instruments and the configuration of technological consortia within major EU programmes.

Moreover, the geopolitical context – shaped by the US Inflation Reduction Act (IRA) and China’s active industrial policies – strengthens the position of those Member States and industrial sectors advocating a more strategic use of the Single Market and financial instruments capable of securing key productive capacities within Europe.

Public procurement and production scaling

Public procurement emerges as one of the most powerful instruments in this framework. The IAA not only introduces origin requirements but also consolidates procurement as a tool of industrial and technological policy. Innovation procurement and clean technology auctions are conceived as levers to create European lead markets. This means that public authorities at European, national and regional level will need to integrate European content and resilience criteria into their purchasing procedures, particularly in strategic sectors. The scale of public procurement in the EU – around 14% of GDP, approximately €2 trillion annually according to the latest Commission data – makes it a decisive vector for industrial scaling.

Scaling up investment is another core pillar of the IAA. The regulation is not limited to stimulating research and development. It is designed to accelerate the transition from demonstration to large-scale production. The Commission explicitly links the text to the need to increase the number of final investment decisions in strategic sectors. The draft provides mechanisms to shorten administrative timelines, streamline permitting and concentrate industrial activity in specific areas.

In this context, so-called Industrial Acceleration Zones take on relevance. Member States will be required to designate areas where strategic manufacturing activities are concentrated and where authorisation procedures are simplified through aggregated permits and digital one-stop shops. These zones must include dedicated energy planning, priority access to infrastructure and synergies with other European initiatives such as the Net-Zero Industry Act and the Critical Raw Materials Act. The logic is territorial and cluster-based: creating industrial ecosystems capable of attracting investment, reducing transaction costs and integrating complete value chains.

A new financial architecture and investment control

The regulation also incorporates a broader financial dimension. It foresees alignment with the European Competitiveness Fund, still under definition but intended to concentrate support on strategic sectors. The draft also refers to interaction with the STEP label, designed to identify and give visibility to strategic projects in critical technologies. This label could function as a signalling mechanism for investors and public authorities, facilitating access to blended finance instruments and reinforcing coherence between regulation, state aid and EU funds.

In the field of foreign investment, the IAA introduces a specific regime for investments exceeding €100 million in emerging strategic sectors. A 49% cap is set on foreign participation, alongside an obligation to establish joint ventures with European partners, technology transfer commitments and local R&D investment requirements equivalent to a minimum percentage of revenues generated within the Union. At least half of the workforce must be European, and a significant share of inputs used in final products must be manufactured in the EU. These conditions redefine the balance between market openness and the creation of European added value.

Impact on Horizon Europe and other EU funding programmes

The impact of the IAA on European funding is expected to be substantial. Future Horizon Europe calls, particularly within Clusters 4 and 5, are likely to place greater emphasis on projects with clear industrial scaling strategies and European production capacity. Technological excellence will remain essential, but the industrial criterion will gain weight. The Innovation Fund and other instruments focused on demonstration and deployment are also expected to align with this logic, prioritising projects that strengthen European value chains and reduce critical dependencies.

For industrial companies, technology centres and public administrations, the message is that the green and digital transition will no longer be assessed solely in terms of emissions reduction or technological progress, but also in terms of industrial resilience, European productive capacity and contribution to strategic autonomy.

The IAA is not merely a technical regulation. It represents the regulatory expression of a new phase in European industrial policy, where innovation procurement, investment scaling, European content requirements and strategic funding converge within a coherent architecture. Anticipating this logic will be decisive for those seeking to position themselves successfully within the new framework of the Clean Industrial Deal.