European Commission publishes draft Industrial Accelerator Act

On 4 March 2026, the European Commission published its long-awaited proposal for a regulation establishing a framework of measures for the acceleration of industrial capacity and decarbonisation in strategic sectors (Industrial Accelerator Act or IAA). The press release was also accompanied by a Q&A and a factsheet.

The IAA is deliberately wide-ranging, seeking to cover competitiveness, decarbonisation, supply‑chain resilience, foreign investment and territorial industrial policy within a single framework.

Key takeaways

• Strategic industrial and decarbonisation projects would benefit from a single digital, coordinated and permitting procedure, with the aim to shorten approval timelines.

• EU origin (“Made in Europe” / “Made in EU”) and low‑carbon thresholds would be built into EU public procurement and support schemes for key materials and motor vehicles as well as net zero technologies, with derogations, exclusions of certain third‑country bidders, with the Commission given flexibility to adjust technical criteria, revoke third country access, and adopt demand-side measures for productions from the chemicals industry.

• Value‑added conditions and approval requirements would apply to large foreign direct investments (FDIs) in emerging strategic sectors.

• Member States must designate “industrial manufacturing acceleration areas” where industrial projects in strategic sectors benefit from pre‑cleared, area‑wide environmental and planning approvals via an aggregated baseline permit.

Background

The IAA was first announced by Commission President von der Leyen in her 2025 State of the Union Address (see our previous blog post). Building on the Draghi Report on EU competitiveness, the Commission’s proposal responds to concern that the EU’s strategic dependencies are being “weaponised” in an increasingly contested global economy. Combined with subsidised foreign overcapacity, the Commission believes that this exposes theEU’s’s industrial resilience and economic security. At the same time, the energy transition is seen as a potential engine of industrial growth, provided the EU can scale up its own manufacturing capabilities.

The proposal builds on previous communications from the Commission, including the Clean Industrial Deal and the Competitiveness Compass for the EU (see our previous blog posts here and here), as well as the European Economic Security Strategy. It is also shaped by extensive stakeholder input, which highlighted high energy costs, unfair international competition, high decarbonisation costs, limited willingness of downstream customers to pay a “green premium”, complex and lengthy permitting, and difficulties accessing funding. 

The IAA focuses on energy‑intensive industries (such as steel, cement, chemicals and aluminium), net‑zero technologies (including batteries, solar PV, wind, heat pumps, electrolysers and carbon capture) and the European automotive industry, which the Commission identifies as critical enablers for construction, mobility, energy, defence and space. 

The IAA’s general objective is for manufacturing to reach at least 20% of EU GDP by 2035. 

Its three core aims are: 

• leveraging the Single Market to create demand for EU origin (“Made in Europe”) and low‑carbon industrial products and net‑zero technologies; 

• maximising the quality of FDI in the most strategic sectors; and 

• streamlining permitting and fostering industrial clusters.

The Industrial Accelerator Act: an overview

1. Streamlined and digital permitting for industrial and decarbonisation projects

First, the Commission proposes to create a common, streamlined digital permitting framework for two categories of projects:

• ”industrial manufacturing projects”, i.e. the construction, conversion or extension of an industrial site under NACE Code C (Manufacturing), excluding NACE Code 12 (tobacco products) (for the NACE Rev. 2 classification, see here); 

• “energy‑intensive industry decarbonisation projects”, i.e. the construction or conversion of a commercial facility of an energy-intensive business in the industries listed in point 1 of Annex I that significantly and permanently reduce CO₂-eq emission rates to the extent technically feasible. Covered industries include paper, coke and refined petroleum products, chemicals, rubber and plastic products, other non-metallic minerals, and basic metals. 

For industrial manufacturing projects, each Member State would be required to set up a single national digital access point, using the European Business Wallets and – where appropriate – other existing EU digital infrastructures, through which businesses submit a single application for all permits needed to build, expand, convert or operate such a project. 

The application would be automatically routed to competent authorities, who would share data electronically, re-use existing public data and give applicants real-time status visibility. A designated coordinating authority would manage the single permit‑granting procedure and ensure the adoption of a single “comprehensive decision” at the end of the process, with strict deadlines for initial completeness checks and follow‑up requests. 

However, where they exist, other EU streamlined permitting regimes for specific industrial manufacturing projects would take precedence over the IAA permitting process.

The Commission also proposes to extend the streamlined permitting processes already established for net‑zero projects under the Net Zero Industry Act (see our previous blog post) to all energy‑intensive industry decarbonisation projects. These projects are also explicitly recognised as “strategic projects” under the forthcoming EU Regulation on speeding up environmental assessments (see our previous blog post on the Environmental Omnibus).

2. Union origin and low-carbon requirements in public procurement and support schemes

Second, the Commission proposes the adoption of Union origin (“Made in Europe”) and low‑carbon requirements in public procurement and public support schemes to drive demand for EU‑made and low‑carbon energy-intensive industrial products and certain motor vehicles.

From 1 January 2029, contracting authorities would need to require minimum percentage shares for all public procurement procedures within the scope of Directives 2014/23/EU, 2014/24/EU and 2014/25/EU that include the procurement of products from energy intensive industries:

• For steel and steel-dependent products intended for use in buildings, infrastructure and motor vehicles for civil purpose, at least 25% of the total volume of steel should be low-carbon; 

• For concrete and mortar and concrete/mortar-dependent products intended for use in buildings and infrastructure for civil purpose: at least 5% of the total volume of concrete and mortar should be low-carbon and of Union origin;

• For aluminium and aluminium-dependent products intended for use in buildings, infrastructure and motor vehicles for civil purpose, at least 25% of the total volume of aluminium should be low-carbon and of Union origin.

“Union origin” refers to “content originating in the Union”, which shall be determined in accordance with the Union Customs Code. Content originating in third countries with which the Union has concluded an agreement establishing a free trade area or a customs union, or that are parties to the Agreement on Government Procurement, where relevant obligations of the Union exist under that agreement, shall be deemed to be of Union origin. 

The Commission must adopt a delegated act to exclude, in whole or in part, third countries where the third country has failed to provide national treatment related to Union products or entities under those agreements in relation to the sectors covered by the IAA, such exclusion is justified to avoid dependencies and any other threat to security of supply of the products in questions, or such exclusion falls within any other exception under the applicable agreement.

The “low‑carbon” status references technical criteria in other EU instruments such as the Construction Products Regulation and the Ecodesign for Sustainable Products Regulation (ESPR; see our previous blog post). 

Operators would be required to submit a self-declaration demonstrating compliance. The Commission is empowered to establish voluntary classification systems based on the greenhouse gas intensity for certain manufactured products when they are placed on the EU market (if those products are not already regulated by a delegated act under the ESPR or included in the working plans adopted in accordance with the latter Regulation). 

Contracting authorities may decide not to apply the Union origin and/or low-carbon requirements in clearly defined circumstances, such as where there no reasonable alternatives exist, no suitable requests to participate were submitted or would have disproportionate costs or result in technical incompatibility. 

Tenders from operators owned or controlled by entities established in third countries without a relevant international agreement with the Union would be excluded.

For other forms of public intervention, Member States must design their public support schemes, so that they contribute to strengthening the EU’s strategic industrial value chains through the Union origin or low-carbon requirements, ensuring again that beneficiaries comply with minimum Union origin and/or low-carbon steel, cement and mortar, and aluminium shares. This requirement applies to public support schemes accounting for at least 45% of the national budget allocated support schemes to energy intensive industries (see definition above) and 100% for electric, hybrid electric and fuel cell vehicles. Content originating in third countries would again be deemed to be of Union origin, provided that the third country has concluded an agreement with the EU establishing a free trade area or a customs union. The Commission is entrusted with the same powers of third country exclusions.

Competent authorities could still implement support schemes that do not meet the requirements if it would lead to significant delays (which is presumed when estimated delays exceed seven months) and would incur disproportionate costs (which is presumed when compliance would increase costs of the final product by more than 30%). It is not apparent from the wording whether these two conditions are cumulative.

Annex III to the IAA contains specific rules for electric, hybrid electric and fuel cell vehicles, including a framework through which small zero‑emission vehicles “made in the EU” can earn “super credits” under EU vehicle CO₂ emission performance standards. A certification framework through which manufacturers show that vehicles meet Union origin thresholds is also foreseen.

The Commission could also adopt delegated acts to update product scope and technical thresholds, and lay down Union-level demand‑side measures for products from the chemicals industry in order to promote the production, sales, and use in products of substances and mixtures of Union origin derived from sustainable carbon sources (i.e. sustainable biomass, waste and carbon from capturing CO2 emissions).

3.   FDI in emerging strategic sectors

Third, the IAA would introduce a dedicated approval regime for FDIs in “emerging strategic sectors” (batteries / BESS, electric, hybrid and fuel cell vehicles, solar PV and critical raw materials) exceeding EUR 100 million and where more than 40% of global manufacturing capacity is held by the investor’s home (third) country. 

For a detailed analysis of the FDI pillar of the Commission’s proposal, see our separate deep-dive blog post.

In a nutshell, such investments would require prior approval by a national Investment Authority (or, in some cases, by the Commission), could only be cleared if prescribed “value‑added” conditions are met, and would be subject to a harmonised notification, review and enforcement framework, including penalties for non-compliance. 

The scope of sectors and some technical elements could later be adjusted by the Commission through delegated acts, and certain investments (including portfolio investments, services‑focused projects and some treaty‑protected investments) would fall outside this regime.

4. Industrial manufacturing acceleration areas

Fourth, the Commission proposes the creation of “industrial manufacturing acceleration areas” designed to cluster strategic industrial activities in locations where infrastructure, permitting and support conditions are optimised. This regime follows the model of the net zero accelerations valleys under the Net Zero Industry Act. 

Each Member State would need to designate at least one such area in its territory based on objective criteria – including existing or potential industrial specialisation, energy and infrastructure availability, access to critical raw materials, and skilled workforce potential.

Priority should be given to locations outside nature and biodiversity conservation areas and that are not expected to have a significant environmental impact – favouring instead artificial and built surfaces, industrial sites, brownfield sites, etc.

Member States would need to take all necessary measures to develop these areas, including facilitating financing, promoting R&D, conducting reviews of energy and infrastructure needs in the areas (which then need to be fed into network development plans of transmission and distribution system operators), etc. 

With each area, Member States must also establish an “aggregated baseline permit” that covers the permits and administrative authorisations common to the industrial activities planned there, carry out all necessary environmental and planning assessments at area level before issuing that permit, and then limit project‑specific permitting to residual, installation‑specific authorisations (such as those under the Industrial Emissions Directive) and any additional environmental assessments required for particularly sensitive sites. 

All industrial manufacturing projects located in acceleration areas would be treated as strategic projects for the purposes of the new environmental assessment framework, enabling use of further acceleration tools. 

5. Other amendments to existing legislation

Importantly, the IAA would also make similar changes to existing instruments, including the Net Zero Industry Act (and therefore in-scope net zero technologies), the Single Digital Gateway Regulation, and the Construction Products Regulation.

These amendments tighten Union origin requirements in public procurement, auctions and support schemes for net‑zero technologies (such as BESS, solar PV, heat pumps, wind, nuclear fission, hydrogen, electrolysers, etc.), align digital permitting and data re‑use rules, and expand the Commission’s powers to adopt and update origin, low‑carbon and labelling requirements.

In addition, for certain auctions of certain net-zero technologies, Member States would need to apply a pre-qualification criterion on cybersecurity.

Next steps

The proposal is subject to the “ordinary legislative procedure”. The European Parliament and Council will first need to develop their own negotiating positions on the Commission’s draft, after which the three institutions will enter trilogue negotiations to agree a common final text.

Given the IAA’s political sensitivity and technical complexity, this process is likely to encounter obstacles along the way and take some time to be completed, with negotiations expected to focus on the balance between industrial policy and wider geopolitical considerations, including the EU’s relationship with the United States.

If you would like to discuss any aspect of this proposal, please reach out to the contacts on this post, or to your usual Linklaters contact.