The European Commission has unveiled the proposed Industrial Accelerator Act (IAA), aimed at shielding Europe’s key sectors from global uncertainty and unfair foreign competition.

The proposed law includes measures to boost both the production and demand of European-made technologies and products. Through scaling European manufacturing, the aim is to reduce dependence on non-EU suppliers in strategic sectors including steel, cement, aluminium, automotive and clean technologies.

“Facing unprecedented global uncertainty and unfair competition, European industry can count on the provisions of this act to boost demand and guarantee resilient supply chains in strategic sectors,” said EU industry commissioner Stéphane Séjourné when unveiling the IAA at an event in Brussels last week.

In 2024, manufacturing represented 14.3% of EU GDP. The Act sets a goal to increase manufacturing’s share of EU GDP to 20% by 2035.

It plans to do this by introducing ‘Made in the EU’ and low-carbon standards for public procurement. This features a 70% EU-content requirement for electric vehicles (EVs), aimed at bolstering European industry against cheaper imports from Asia.

Under the new rules, countries that have established trusted partnerships with the EU and offer European companies reciprocal access to their markets will receive the same treatment as EU members. This means that the UK, and other like-minded partner countries such as Japan, could gain access to certain subsidies and public procurement benefits in clean technology, heavy industry and car making provided they offer reciprocal access to EU-based manufacturers.

“Public procurement accounts for a significant chunk of the EU’s economy: around 15% of GDP. That’s a huge amount of taxpayers’ money and we want to make sure it’s used to support European businesses manufacturing clean products here in the EU,” said Wopke Hoekstra, European commissioner for climate, net zero and clean growth.

To prevent non-EU companies from building plants in Europe that contribute little to the local economy or create few jobs, the Act outlines certain conditions for major foreign investments in strategic sectors. These conditions apply to investments of €100m or more by non-EU companies that control over 40% of global production in areas such as EVs, batteries, solar and critical raw materials. 

To qualify, such investments must create high-quality jobs, drive innovation and growth, generate real value in the EU through technology and knowledge transfer, and comply with local content requirements. They must also guarantee at least 50% employment of EU workers. 

These safeguards are designed to strengthen EU economic security and reinforce supply chain resilience, while ensuring that businesses and citizens benefit alongside investors from access to the single market.

“The EU is and remains an open economic block, but we can’t ignore the new geopolitical realities. We need to stand up more strongly for our own interests. This new proposal is another step towards building more robust and clean industries, securing our supply chains and protecting our economic security,” said Hoekstra.