EU Industrial Accelerator Act: Boosting Clean Industry and Resilient Supply Chains

The Commission has adopted a new legislative proposal, the Industrial Accelerator Act. It introduces new criteria for public procurement: not just price, but also emissions, supply chain resilience, and production origin. The aim is to support European clean technologies and prevent decarbonization from translating into deindustrialization.

Part of the Clean Industrial Deal, the Industrial Accelerator Act supports Europe’s transition to a carbon-neutral economy

New public procurement criteria and industrial aid to support the production of clean technologies: the European Commission has adopted the long-awaited legislative proposal to strengthen the Union’s industrial capacity in sectors strategic to the transition.

This is the Industrial Accelerator Act, which is part of the Clean Industrial Deal, the Commission’s strategy to strengthen the competitiveness of European businesses in the transition to a carbon-neutral economy. It will apply to selected sectors, including steel, cement, aluminum, automobiles, and net-zero emission technologies. However, the framework may be extended, if necessary, to other energy-intensive sectors such as chemicals.

The goal is to prevent decarbonization from leading to deindustrialization or production relocation —that is, from pushing production and investment out of Europe—and to transform the climate transition into a driver of new industrialization. To do this, the Commission proposes a change in the way European public authorities select suppliers for major industrial and infrastructure projects.

Price will no longer be the sole decision-making criterion: emissions, supply chain resilience, and product origin will all play a role , benefiting European or partner country industrial chains.

What limits European industrial development in strategic sectors of transition according to the EU Commission?

The Commission identifies three structural problems that currently limit European industrial development in strategic sectors of transition:

Vulnerabilities of supply chains in strategic sectors and technologies for the energy transition.
Demand for European low-carbon industrial products remains limited, making it more difficult to sustain investments in decarbonisation.

Difficulties in the large-scale diffusion of clean industrial technologies, mainly due to lengthy, fragmented and uncertain authorization procedures.

These critical issues stem from a broader context in which several European industrial sectors are facing strong competitive and structural pressures, with declining production and slower investment in decarbonization compared to other parts of the world.

At the same time, some key technologies for the energy transition are now predominantly produced outside Europe, often in markets characterized by strong public support policies , as in the case of China, which concentrates much of the global production capacity in areas such as batteries and photovoltaics.

Public procurement, emissions and “Made in Europe ” requirements

The core of the Industrial Accelerator Act proposal concerns the way European public authorities select suppliers for large industrial and infrastructure projects.

The Commission proposes to introduce new evaluation criteria into public procurement processes and public support schemes that take into account not only economic data, but also factors related to environmental sustainability, industrial resilience and the security of supply chains.

In particular, the Industrial Accelerator Act introduces:

preference criteria for low-emission products , with the aim of favoring technologies and materials produced with less carbon-intensive industrial processes;

industrial resilience requirements , which aim to reduce the Union’s dependence on suppliers concentrated in a limited number of countries;

production origin criteria, often summarised in public debate as “Made in Europe” requirements.

According to the European Commission’s proposal, price will no longer be the sole deciding factor in public procurement for certain strategic energy transition technologies. Administrations will also have to consider the origin and resilience of production chains, favoring products made in the European Union or in partner countries with which the EU maintains close economic ties.

In this regard, the Commission’s definition of “Made in Europe ”, adopted in the text, is not limited to products manufactured within the Union, but also includes those coming from third countries that have concluded agreements with the EU establishing a free trade area or a customs union.

The Industrial Accelerator Act defines specific rules for large investments in strategic sectors

The concept proposed by the European legislator is therefore not strictly territorial, but rather reflects a logic of economic integration and reliability of production chains . In this way, the Commission seeks to strengthen European industrial production without closing the market, keeping supply chains open with strategic trading partners.

However, while remaining open to foreign direct investment, the Industrial Accelerator Act defines specific rules for large investments in strategic sectors exceeding €100 million, especially when a single third country controls more than 40% of global production capacity. In these cases, investments must make a tangible contribution to the European economy: creating high-quality jobs, stimulating innovation and growth, transferring technologies and skills, and complying with local content requirements.

They must also ensure that at least half of the jobs generated remain in Europe, ensuring that businesses and citizens derive tangible benefits from access to the single market. In this way, the IAA strengthens the EU’s economic security and increases the resilience of supply chains.

The regulatory effect on global value chains

The proposal also introduces another element that is increasingly characterising recent European legislation: the ability to indirectly impact global value chains .

Although this legislation is formally intended for the internal market, the approach adopted by the Commission has implications that extend beyond the Union’s borders. The criteria of origin, sustainability, and resilience of supply chains tend to guide the behavior of companies along the entire production chain, including those located in third countries.

In this respect, the Industrial Accelerator Act fits into a broader trend in European regulation, already evident in instruments such as the Corporate Sustainability Due Diligence Directive (CSDDD) . Here too, the European legislator has adopted an approach that transcends the formal boundaries of legal subjectivity and territoriality, extending due diligence and liability obligations to activities carried out along global value chains and also to companies established in third countries but economically integrated into the European market.

The result is a form of regulatory projection of the European legal system , in which access to the Union market becomes the instrument through which the legislator exercises normative moral suasion on global supply chains.

In this sense, the Industrial Accelerator Act also seems to confirm a now consolidated trend: the European Union’s ability to use its economic and regulatory weight to progressively shape industrial, environmental, and production standards well beyond its borders.

From profit maximization to industrial responsibility

When economist Milton Friedman wrote in the New York Times in the autumn of 1970 that “the social responsibility of business is to increase its profits,” it was difficult to imagine the regulatory framework that characterizes the European economy today.

In recent years, in fact, the European legislator has progressively overcome a strictly shareholder-centric vision of business , recognizing that the great contemporary challenges, from the climate crisis to geopolitical insecurity, require the integration of the logic of profit with environmental, social and governance objectives.

This is not about modifying the economic function of business, nor assigning it tasks traditionally reserved for the state, thus risking a politicization of corporate law. On the contrary, it is necessary to recognize that the great challenges of our time require shared responsibility and structured cooperation between the state and business, aimed at achieving the objectives of ecological transition and protecting widespread interests.

It is precisely in light of these considerations that the Commission’s proposal defines specific rules for large investments in strategic sectors proposal for the Industrial Accelerator can be better understood: an attempt to create regulatory tools capable of strengthening European industrial competitiveness without compromising climate objectives.

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(Featured image by Tetiana SHYSHkina via Unsplash)

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