EU Industrial Accelerator Act: boosting industry and employment
08/04/26
To boost demand for European industrial products, the European Commission recently presented the legislative proposal Industrial Accelerator Act (IAA). The aim is to stimulate European industrial capacity in specific net-zero technology sectors, thereby enabling EU-based companies in these areas to grow and create jobs within the EU.
The IAA focuses on specific products such as cement, aluminum, automobiles, and net-zero technologies like batteries, solar energy, wind energy, heat pumps, and nuclear energy. The Act supports the adoption of cleaner, future-proof technologies across industries. This includes uniform standards, 'Made in EU' and 'low-carbon' requirements for public procurement, which allow European companies to receive a certain degree of preferential treatment in government contracts and state aid.
What does this mean for your organisation?
The IAA especially creates opportunities for companies operating in the following strategic sectors.
- Energy-intensive industries: Producers of steel, aluminum, concrete, and cement who invest in low-carbon production processes can benefit from preferential treatment in public procurement. Starting in 2029, minimum requirements will apply for low-carbon steel (at least 25%), concrete and mortar (at least 5% low-carbon and of EU origin), and aluminum (at least 25% low-carbon and of EU origin) in civil buildings, infrastructure, and vehicles.
- Net-zero technologies: Manufacturers of batteries, solar panels, solar thermal systems, wind turbines (onshore and offshore), heat pumps, electrolysers, and nuclear technologies with production based in the EU can expect increased demand from government contracts and support schemes due to the Made in EU requirements.
- Automotive sector: Producers of electric vehicles and components whose assembly, parts, batteries, drivetrains, and electronics are of EU origin gain a competitive advantage in public procurement. The proposal also introduces specific definitions for 'small affordable electric vehicles made in the EU' and 'business cars and vans made in the EU'.
- Construction and infrastructure sector: Contractors and suppliers working with low-carbon materials of European origin are favorably positioned for government contracts in the construction and infrastructure sector.
- SMEs in manufacturing: The simplified permitting procedures are widely supported, especially by SMEs who have fewer resources to manage administrative burdens.
The IAA creates both new commercial opportunities and compliance challenges for companies in energy-intensive and strategic sectors. It is advisable to assess now to what extent your organization can benefit from this new regulation and what adjustments are needed to meet the requirements.
By 2035, the EU's own manufacturing sector must account for 20 percent of the EU's gross domestic product, up from 14.3 percent today.
Made in EU-criterium
The 'Made in EU' criterion constitutes a key element of the proposal. Minimum EU-origin requirements are being introduced for energy-intensive products and electric vehicles (see also our Tax News Article 'Relevance of origin and stable supply chains').
The 'Made in EU' criterion in the proposal corresponds with the non-preferential rules of origin as laid down in the Union Customs Code (UCC). However, this criterion will be extended to goods originating from countries outside the EU, provided the EU has concluded a customs union or trade agreement with that country. Additionally, in the context of national procurement, countries that are signatories to the Agreement on Government Procurement are also included.
This results in a peculiar blending of preferential and non-preferential origin. As trade agreements are generally based on preferential rules of origin, this means that goods from these countries will not use the preferential rules from the trade agreement, but instead the non-preferential rules of origin. It should be noted that not all products have a clear non-preferential rule of origin included in the UCC.
For electric vehicles, more specific origin requirements are set for the assembly, components, batteries, drivetrains, and electronics.
The ‘Made in EU’ criterion creates opportunities.
- Benefit from no or reduced import duties if additional products are sourced or produced in a country with which the EU has concluded a free trade agreement.
- Reliable supply chain: countries with which the EU has a free trade agreement are typically those where lengthy negotiations have taken place regarding the flow of goods between the EU and that country. The likelihood of disruptions, such as additional tariffs, is low, which supports the continuity of production.
- Local production: this will help to reduce supply chain disruptions as well as decrease CO₂ emissions, as goods are transported over shorter distances.
As usual, these opportunities are matched by compliance obligations. Because the approach is aligned with existing laws and regulations, these obligations can be anticipated and addressed in advance..
Made in EU requirements for subsidised projects
The Industrial Accelerator Act introduces additional Made in EU requirements for projects receiving subsidies. This applies to net-zero technologies such as battery systems, solar PV technology, heat pumps, wind turbines (both onshore and offshore), nuclear technology, and hydrogen production (electrolysis).
Simplification of Permit Procedures
As part of the Commission’s simplification agenda, the IAA streamlines and digitises certain permitting procedures for industrial projects, including standardised permit deadlines. The streamlined permit procedures feature single points of contact and time limits for all energy-intensive industrial decarbonisation projects. This is expected to result in a one-off net reduction of approximately 240 million euro in administrative burdens for businesses.
Acquisitions and Investments: EU Joint Ventures Required
The proposal also aims to tighten the rules for foreign investments exceeding 100 million euro and acquisitions in selected strategic sectors. The Commission stipulates that, in a joint venture, at least 51 percent of the shares must be in European hands, and half of the employees must come from the EU. These measures are intended to ensure that foreign investments contribute to knowledge development, job creation, and integration into the value chain.
Specific national industrial production regions
Countries are required to designate areas where national industrial production can be concentrated. These regions may receive additional financial and regulatory support. Projects within these 'industrial production acceleration areas' are eligible for extra benefits, such as tacit approval for intermediate stages and priority handling of connection requests.
Next steps
The European Parliament and the Council of the European Union must approve the proposal before it is adopted and enters into force. To that end, the parties will engage in discussions with each other.
As the proposal contains many elements that must be implemented by individual EU Member States before taking effect, it is important for businesses to closely monitor developments. We advise organisations to analyse their exposure to the new requirements and prepare for a more interventionist and economically security-focused industrial policy within the EU. Of course, we are able to support companies with this process.
In preparing for this legislation, it is crucial to take into account the correct origin determination of your products. Robust origin administration is essential in order to take advantage of the benefits offered. At PwC, we have extensive experience supporting companies in assessing their supply chains and origin management. This includes evaluating the origin of your products, your procedures relating to origin, and your supply chains to determine whether, with a few adjustments, preferential origin can be claimed. In addition, we can assist with the implementation of software to support your origin management.
Contact us
Suzanne Bras
Senior Manager Customs & International Trade, PwC Netherlands
Tel: +31 (0)65 395 86 76
Mohammed Azouagh
Senior Manager - Tax, Sustainability and Incentives, PwC Netherlands
Tel: +31 (0)62 380 36 54
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