"The urgency could not be greater": The EU's Proposed Industrial Accelerator Act

“The urgency could not be greater,” declared EU Commission President Ursula von der Leyen at the Antwerp European Industry Summit on 11 February 2026, highlighting the profound challenges the European Union faces in an increasingly competitive global market and a rapidly evolving geopolitical landscape. In the light of these challenges, the EU has recognised the need for a more strategic and resilient industrial policy. The goal is explicit: by 2035, the EU aims to reverse the decline in industrial output and raise the manufacturing sector’s share to 20% of EU GDP. To support this transformation, the European Commission presented a draft of the proposed Industrial Accelerator Act (IAA) on 4 March 2026, seeking to translate the industrial policy goals of the Clean Industrial Deal and the security policy principles set out in JOIN/2025/977 into binding legislation. The draft identifies several strategically significant sectors, including energyintensive industries, the production of netzero technologies, and the automotive industry. Across these areas, the EU aims to unlock industrial potential through measures such as minimum EU production share requirements as a condition for accessing public procurement and public support schemes, tighter rules on certain foreign direct investments, and streamlined administrative procedures.

This newsletter provides an overview of the key proposals made by the Commission.

Key provisions of the Industrial Accelerator Act

To unlock EU´s industrial opportunities, the IAA seeks to create a lead market for products in strategic sectors by establishing Union‑origin (“Made-in-EU”) and low‑carbon requirements in the context of public procurement and public support schemes. In addition, the IAA introduces specific conditions on foreign direct investments in emerging strategic sectors to ensure that such investments contribute to the EU’s economic resilience. Moreover, the IAA aims to accelerate industrial development in the European Union by streamlining permit‑granting procedures for industrial manufacturing projects, including decarbonisation projects in energy‑intensive industries.

Union-origin “Made-in-EU” and low carbon requirements in public procurement and public support schemes

The IAA provides that greater consideration must be given, in the context of public procurement and public support schemes, to where products are manufactured and how carbon-intensive their production is. Under the current draft, contracting authorities and awarding entities will, in accordance with the requirements set out in Annex II of the Regulation, be required to ensure that, for example, at least 25% of the steel used in procurement procedures regarding energy intensive industries consist of low‑carbon steel. Similar rules will apply to other basic materials such as concrete, mortar, and aluminium. The aim is to create demand for decarbonised industrial products produced in Europe and to incentivise investment in climate-friendly production processes.

Specific rules are also envisaged for certain vehicle types – battery‑electric (PEV), plug‑in hybrid (OVC‑HEV), and fuel‑cell vehicles (FCV). In order, for example, for an electric or hybrid vehicle to benefit from state support schemes or public procurement, a certain share of the vehicle’s components – determined by value and defined in Annex III – must originate in the EU. In practice, this means, for example, that an electric vehicle manufactured and assembled in China could be ineligible for public subsidies, even if it is sold on the European market. “Made in EU” therefore does not constitute a traditional rule of origin – such as those known from preferential trade agreements – but rather a set of rules designed to favour European production in public procurement and support measures. Exceptions are foreseen for materials originating from certain partner countries, which will be counted as equivalent to EU origin.

Stricter rules on foreign direct investments (FDI)

The IAA also provides for stricter rules on foreign direct investment (FDI) into ‘emerging strategic sectors’ – including battery technologies, electric vehicles, solar PV technologies, and technologies for the extraction, processing or recycling of critical raw materials. The new mechanism would operate in parallel with the existing FDI screening mechanism on national level and the EU FDI Screening Regulation.

Foreign investments (including certain greenfield investments) exceeding €100 million in these sectors, which would result in the acquisition or takeover of control of an EU company (control defined as at least 30 % of share capital/voting rights/ownership) or asset by investors owned or controlled by nationals or companies of a third country – provided that this third country investor holds more than 40% of global production capacity in the sectors concerned – shall require prior authorisation. In such cases, foreign investors are generally subject to a 49% ownership cap in the target company in the EU and are required to establish a joint venture with an EU company. Authorisation will only be granted if the investment creates added value for the EU, including requirements such as technology transfer through the licensing of intellectual property, mandatory exchange of know-how with EU partners, and a majority share of EU workforce. Additionally, at least 1% of the annual turnover must be reinvested in research and development within the EU, and at least 50% of the products placed on the EU market must be manufactured within the Union. The Commission would play a greater role in the new mechanism than within the framework of the existing FDI screening mechanism, even though the EU Member States will ultimately decide on the qualifying investments.

Accelerating permitting procedures for strategic sectors

Finally, the IAA seeks to streamline and accelerate permitting procedures for strategic sectors – including energy-intensive industries, net-zero technologies, and the automotive industry. This covers, in particular, building permits for industrial facilities, environmental authorisations, and permits for renewable energy projects such as wind and solar installations. To achieve this, Member States shall establish a single permit granting procedure based on one unified application covering all permits necessary for industrial manufacturing projects. The proposal also sets out standardised processing timelines: within 45 days of receiving an application, the competent national authority shall either confirm that the application is complete or request any additional information needed to process it. These measures are designed to enhance the EU’s global competitiveness.

What´s next?

The draft represents a proposal by the European Commission and must now undergo negotiations and approval under the ordinary legislative procedure in both the European Parliament and the Council of the EU before it can enter into force. The released official draft of the IAA is more limited in scope than earlier leaks had suggested. Notably, the list of designated “strategic sectors” remains relatively narrow and excludes digital technologies, a field in which the EU continues to rely heavily on third-country capabilities. It remains to be seen how the draft will evolve over the course of the legislative process. It is likely that the proposal will still be subject to significant changes, so developments should be monitored closely.