Industrial Accelerator Act – framework for industrial development in the EU
The European Commission has presented the Industrial Accelerator Act (IAA), a regulation aimed at creating a framework for rebuilding Europe’s industrial base, accelerating investment, and strengthening the resilience of supply chains. The objective of the Act is to reverse the long‑standing decline in industry’s share of GDP and ensure that, by 2035, the manufacturing sector accounts for at least 20% of the EU’s GDP.
What does the Industrial Accelerator Act mean for businesses?
Once adopted, the IAA will have several practical implications for the industrial sector:
- industrial investments will be carried out faster and with greater procedural certainty,
- participation in public procurement procedures will require substantiating the carbon footprint of materials and the origin of components,
- projects involving foreign investors from outside the EU will require alignment of legal structures and cooperation models with new requirements on control, technology transfer and local contribution,
- companies may gain an advantage by locating investments in Industrial Manufacturing Acceleration Areas (areas designated for accelerated industrial development).
Why was the IAA created?
In the explanatory memorandum to the proposal, the Commission emphasises that although in 2024 industry accounted for 18.3% of employment in the EU business economy and 14.3% of the EU’s total GDP (while generating 26.2% of the EU’s greenhouse gas emissions), the sector’s share of GDP has declined over recent decades from 17.4% in 2000 to its current level of 14.3%.
At the same time, the events of recent years – the pandemic, the war in Ukraine, rising geopolitical tensions and supply chain disruptions – have exposed the vulnerabilities of the European economy and its excessive dependence on supplies from outside the EU.
The key industries covered by the proposal – including energy‑intensive industries, net‑zero technology manufacturing and the automotive industry – represent around 15% of EU industrial output. At the same time they are of strategic importance for the functioning of other parts of economy, including the energy, construction and mobility sectors.
The proposal will now undergo negotiations between the European Parliament and the Council of the EU before it can be adopted and enter into force.
The regulatory initiative clearly signals the direction of EU industrial policy. Considering the dynamic economic environment and last year’s swift adoption of CISAF, a similarly rapid approval of the IAA should be expected.
What are the key solutions proposed in the Industrial Accelerator Act?
The legislation introduces numerous procedural improvements as well as new obligations for businesses. Which elements will be crucial for implementing industrial projects once the IAA enters into force?
Streamlining and digitalising investment procedures for industrial manufacturing projects
The proposal introduces a harmonised, fully digital permitting procedure for industrial manufacturing projects. Every Member State will establish a single access point through which investors submit a complete permit application for their industrial manufacturing projects. The competent authorities will be required to coordinate all necessary permits and issue one comprehensive decision within harmonised deadlines.
For companies, this means greater predictability, shorter timelines and lower administrative risk.
Creating European “lead markets” – preferences for low‑carbon and EU‑made products
The Industrial Accelerator Act introduces new requirements on low‑carbon performance and product origin (Union origin) for products used in public procurement and certain public support schemes. The aim is to create a stable market for strategically important European technologies and industrial materials.
These rules apply in particular to selected energy‑intensive industries, net-zero technologies and the automotive industry.
Minimum thresholds for EU-origin content
Public procurement procedures will need to include minimum thresholds of Union origin content for products such as:
- batteries,
- PV modules,
- heat pumps,
- wind‑energy components,
- electrolysers,
- selected nuclear technologies.
Origin will be determined in line with rules indicated by Union, and in certain cases content originating in countries with EU trade agreements will be considered equivalent.
Obligation to use low‑emission materials
A requirement to use low‑emission materials will also be introduced, in particular steel, aluminium, as well as concrete and mortar. The aim is to ensure that projects financed with public funds use materials with the lowest possible carbon footprint.
Economic operators will submit declarations confirming compliance with the requirements, with the possibility of subsequent verification by contracting authorities.
The requirements are intended to serve as the rule, from which the regulation provides precisely defined exceptions – including cases of excessive cost increases or a lack of available products meeting the criteria.
New rules foreign direct investments in strategic sectors
Additional obligations include limiting the level of control held by non‑EU entities and the requirement to cooperate with a European partner.
The Industrial Accelerator Act introduces detailed rules for foreign direct investment exceeding EUR 100 million in strategic sectors, in particular where the investor’s country accounts for more than 40% of global production capacity in a given technology.
A foreign entity will be required to meet several conditions, including:
- an appropriate ownership structure and a limitation on control (maximum 49% shareholding),
- cooperation with a European partner in the form of a joint venture,
- ensuring technology transfer or the licensing of intellectual property rights,
- conducting research and development activities,
- employing workers from the EU,
- using EU‑origin components in production.
Industrial Manufacturing Acceleration Areas Special with simplified procedures
Member states will be able to designate Industrial Manufacturing Acceleration Areas, where administrative procedures will be significantly simplified. These areas will be selected based on their potential to support the development of production capacity in strategic sectors, including energy‑intensive industries, clean technologies, and the automotive sector.
Within these areas, the use of baseline integrated permits will be possible, as well as early planning of energy demand. This is intended to ensure faster grid connections and more efficient infrastructure coordination. Projects implemented in these zones will also benefit from joint purchases of critical raw materials and measures supporting workforce development.
In addition, Member states may undertake actions aimed at:
• facilitating project financing,
• supporting investments in research and innovation,
• conducting regular assessments of energy demand and infrastructure needs.
These areas are also expected to strengthen coordination across critical raw material supply chains and support skills development through training programmes and the exchange of best practices.
We will continue to monitor the progress of the IAA’s implementation and provide updates on an ongoing basis. Should you have any questions on this topic, please feel free to contact us.
