The Industrial Accelerator Act (IAA) seeks to boost manufacturing, grow businesses, and create jobs in the EU, while supporting industry’s adoption of cleaner, future-ready technologies. It introduces targeted and proportionate ‘made in EU’ and/or low-carbon requirements for public procurement and public support schemes. These will apply to selected strategic sectors, notably in steel, cement, aluminium, cars, and net-zero technologies, while establishing a framework that can be extended to other energy-intensive sectors such as chemicals.

The EU hopes that it will strengthen European production capacities and boost demand for European-made clean technologies and products. The Act includes a requirement for Member States to set up a single digital permitting process to speed up and simplify manufacturing projects.

The IAA aims to increase value creation in the EU, strengthening its industrial base against the backdrop of growing ‘unfair’ global competition and increasing dependencies on non-EU suppliers in strategic sectors. It therefore represents a strategy to support long-term economic growth, prosperity, and security.

It introduces ‘made in EU’ and low-carbon preferences in public procurement and public support schemes to boost demand for European industrial products including cement, aluminium, and net-zero technologies such as batteries, solar, wind, heat pumps, and nuclear. For steel, the Act proposes specific low-carbon preferences to create market demand. It aims to give investors confidence and predictability, boosting innovation and making clean steel a core part of the EU’s industrial future. Strategic use of public funds will support investments in the EU, thereby strengthening access to low-carbon products and safeguarding competitiveness.

The proposed regulation will be negotiated by the European Parliament and the Council of the European Union before its adoption and entry into force.

Aniruddha Sharma, Chair and CEO of Carbon Clean, commenting on the draft legislation, noted that “working in tandem with other European initiatives, such as the Innovation Fund and Horizon Europe, the IAA can support Europe in becoming a leader in the manufacturing and deployment of low carbon technology, including carbon capture systems”.

Publication of the IAA has been welcomed by organisations such as the CCSA, although they note that Europe risks creating stranded demand if key gaps are not addressed. While the Act establishes demand quotas for low-carbon products, the CCSA warns that it does not yet ensure:

•       The development of CO₂ transport and storage infrastructure needed to physically enable industrial decarbonisation.
•       Robust EU-level financial de-risking mechanisms across the value chain, including dedicated funding instruments and revenue support schemes.
•       Regulatory certainty for carbon accounting, which is essential to unlock long-term investment decisions.

The CCSA notes that without alignment between demand creation, infrastructure deployment, and investment support, large-scale industrial decarbonisation will remain at risk.