- The European Commission proposes the Industrial Accelerator Act to expand demand for low carbon and European made industrial technologies across sectors including steel, cement, aluminium, vehicles and clean energy equipment.
- New procurement rules introduce targeted “Made in EU” and low carbon requirements designed to stimulate domestic manufacturing and strengthen supply chains.
- The EU aims to increase manufacturing’s share of GDP from 14.3% today to 20% by 2035 while accelerating permitting and tightening conditions on foreign investment in strategic sectors.
The European Commission has unveiled the Industrial Accelerator Act, a sweeping legislative proposal designed to boost demand for low carbon technologies produced in Europe while reinforcing the region’s industrial base amid rising global competition.
The initiative combines procurement policy, industrial investment rules and regulatory reforms to encourage companies to manufacture key clean technologies inside the European Union. The proposal also seeks to accelerate industrial decarbonisation and strengthen economic security across sectors critical to the energy transition.
Manufacturing currently represents 14.3% of EU GDP. Under the new proposal, Brussels aims to increase that share to 20% by 2035 as part of a broader strategy to safeguard economic resilience, innovation capacity and employment across the bloc.
Driving Demand For European Low Carbon Technologies
At the center of the Industrial Accelerator Act is a new framework for public procurement and public support schemes that prioritizes low carbon and “Made in EU” industrial products.
These requirements will initially apply to strategic sectors including steel, cement, aluminium, automotive manufacturing and a range of net zero technologies. The scope also covers energy transition equipment such as batteries, solar panels, wind turbines, heat pumps and nuclear technologies.
The Commission argues that public procurement can serve as a powerful industrial policy tool. By steering government spending toward low carbon European products, the policy is intended to create predictable demand and provide long term investment certainty for manufacturers.
For steel in particular, the legislation introduces dedicated low carbon procurement preferences designed to stimulate the market for clean steel production. Officials say the measure should support innovation and encourage companies to scale new decarbonised production methods.
Strengthening Supply Chains And Industrial Capacity
The proposal arrives as European policymakers increasingly focus on industrial competitiveness and supply chain security. Global manufacturing capacity for many strategic technologies remains heavily concentrated outside Europe, raising concerns about dependencies in sectors tied to energy transition and critical infrastructure.
The Industrial Accelerator Act responds by promoting domestic manufacturing while maintaining the EU’s longstanding commitment to open markets.
The legislation includes provisions encouraging reciprocal access to procurement markets. Countries that offer European companies similar opportunities will receive equal treatment in EU procurement frameworks. Partners with free trade agreements or customs unions with the EU will be considered as providing products of Union origin in relevant cases.
New Conditions On Foreign Investment
Foreign direct investment remains central to Europe’s industrial economy. The EU hosted nearly one quarter of global FDI stock in 2024, making it one of the world’s most attractive destinations for international capital.
However, the new legislation introduces conditions for large investments in strategic sectors where global production capacity is dominated by a single third country.
Under the proposal, investments exceeding €100 million in areas such as batteries, electric vehicles, photovoltaics and critical raw materials will face additional requirements if a single non EU country controls more than 40% of global manufacturing capacity.
These investments must demonstrate clear economic value for the EU through technology transfer, innovation and job creation. They must also comply with local content requirements and guarantee that at least 50% of employment generated by the project takes place within Europe.
Officials argue the measures will help ensure foreign capital strengthens domestic industrial ecosystems rather than reinforcing external dependencies.
Faster Permitting For Industrial Projects
Beyond investment rules and procurement policies, the Industrial Accelerator Act also focuses on regulatory efficiency.
The Commission proposes a single digital permitting system for industrial projects designed to reduce administrative delays and improve transparency for investors. Member states would implement a one stop shop permitting process supported by digital platforms and clear time limits.
The framework includes tacit approval provisions at intermediate stages of permitting for certain decarbonisation projects in energy intensive sectors. The aim is to accelerate industrial upgrades and encourage companies to deploy cleaner technologies more quickly.
RELATED ARTICLE: EU Narrows Corporate Sustainability Due Diligence Rules After Industry Pressure
Industrial Acceleration Areas And Clean Manufacturing Clusters
Another element of the legislation is the creation of Industrial Acceleration Areas. These designated zones would allow companies to cluster manufacturing projects in locations where infrastructure, permitting and investment support are aligned.
The concept is intended to encourage industrial symbiosis, where companies share resources, infrastructure and energy systems to reduce emissions and improve efficiency.
Clusters in these areas would receive support for workforce development and could benefit from coordinated energy infrastructure planning, making it easier to deploy clean manufacturing at scale.
What Comes Next
The Industrial Accelerator Act now enters the EU legislative process. The proposed regulation will be negotiated by the European Parliament and the Council of the European Union before it can be formally adopted and implemented.
For business leaders and investors, the proposal reflects a broader shift in European policy. Climate goals remain central, but industrial competitiveness and economic security are increasingly shaping how the EU approaches the energy transition.
If approved, the legislation could reshape procurement rules, industrial investment patterns and supply chains across multiple sectors. The outcome will influence how quickly Europe scales domestic clean manufacturing and how the region positions itself within the rapidly evolving global market for low carbon technologies.
Follow ESG News on LinkedIn
The post EU Proposes Industrial Accelerator Act To Boost Low Carbon Manufacturing appeared first on ESG News.
