Industrial Accelerator Act: strategic ambition meets familiar political caution

Last week the European Commission presented its proposal for the Industrial Accelerator Act (IAA), aimed at boosting the resilience, competitiveness and decarbonisation of Europe’s industrial base. The initiative arrives at a time when industrial policy has returned to the centre of political debate in the EU, driven by a hardening geopolitical landscape and growing unease over technological dependence and fragile global supply chains.

The proposal has been championed politically by Executive Vice-President Stéphane Séjourné, whose push for a stronger European industrial framework reflects a broader shift in Brussels’ policy discourse toward strategic autonomy, industrial sovereignty and competitiveness.

The increasingly confrontational trade and diplomatic posture of the United States under President Donald Trump, the growing technological and industrial rivalry with China, and Russia’s invasion of Ukraine have reinforced the perception that Europe must reduce its exposure to external dependencies in strategic sectors. 

In response, EU policymakers have increasingly framed industrial policy not only as an economic imperative but as a matter of geopolitical resilience.

Within this broader context, the Industrial Accelerator Act aims to provide tools to boost domestic manufacturing capacity, accelerate industrial decarbonisation and stimulate demand for European-produced goods in strategic sectors.

Yet the path to the proposal’s publication has revealed the enduring fault lines within the EU’s industrial strategy. 

The limits of “Made in Europe”

A central point of controversy has been the introduction of a “Made in EU” or “Union origin” principle, designed to prioritise European production in public procurement and public support schemes. 

While countries such as France strongly advocated for a robust EU preference mechanism, several Member States, including Germany, Sweden, Ireland, Finland and the Czech Republic, warned that strict local-content rules could harm European companies whose supply chains are deeply integrated with global markets.

These divisions quickly surfaced within the Commission itself. 

During the interservice consultation, several DGs raised concerns about both the economic sustainability of the proposed measures and their compatibility with international trade commitments. 

As a result, the final proposal was significantly watered down compared with earlier drafts: the scope of sectors covered was reduced and the “Made in EU” provisions were softened, notably by extending the concept of “Union origin” to products from countries with free trade or procurement agreements with the EU.

The final text therefore reflects a familiar compromise in EU industrial policy: strong rhetoric on strategic autonomy paired with cautious and heavily negotiated regulatory tools.

What the Industrial Accelerator Act brings to the table

At its core, the Industrial Accelerator Act seeks to increase the weight of manufacturing in the European economy and accelerate industrial investment, particularly in energy-intensive and strategic sectors.

One of the central objectives of the regulation is to raise the share of manufacturing in EU GDP to 20% by 2035. To support this goal, the proposal introduces several policy instruments.

First, the Act establishes Union origin and low-carbon requirements in public procurement and public support schemes—particularly in sectors such as steel, cement, aluminium, automotive manufacturing and net-zero technologies. 

These rules aim to stimulate demand for European industrial production while simultaneously supporting decarbonisation objectives.

However, the concept of “Union origin” has been defined relatively broadly. Products originating from countries that have free trade agreements or customs unions with the EU may also be treated as equivalent to EU products. 

The proposal also introduces specific conditions for large foreign direct investments in strategic sectors where global production is heavily concentrated in a single third country. 

Investments exceeding €100 million in sectors—such as batteries, electric vehicles, solar technologies or critical raw materials—may be subject to additional scrutiny and approval procedures, particularly when foreign investors would obtain significant control over EU industrial assets.

Another key component of the Act concerns permitting and industrial project acceleration. 

Member States will be required to establish a single digital permitting system that centralises administrative procedures and accelerates approval timelines for industrial projects, including those related to decarbonisation. 

In parallel, the regulation provides for the creation of industrial manufacturing acceleration areas, designed to cluster strategic industrial activities and streamline regulatory requirements.

Taken together, these measures aim to strengthen European value chains, accelerate industrial deployment and create favourable conditions for manufacturing investment within the Union.

Ambition without follow-through?

The Industrial Accelerator Act is presented as another step in the EU’s emerging industrial strategy. Yet it also reiterates a broader pattern in European policymaking: a widening gap between strategic ambition and political delivery.

Over the past few years, European institutions have repeatedly emphasised the need to strengthen competitiveness and sovereignty, recalling the Draghi and Letta Reports and the Competitiveness Compass.

However, translating these ambitions into coherent and durable policy has proven far more difficult.

The Industrial Accelerator Act itself provides a telling example. After months of political debate about the need for a strong “Made in Europe” approach, the final proposal ultimately adopts a much softer framework, diluted through exemptions, broad definitions and compatibility clauses with international agreements. 

The result is a proposal that signals industrial ambition politically, while leaving its practical impact uncertain.

It is yet another proof of the fragility in the EU’s regulatory agenda. Several major initiatives from the previous mandate are being reconsidered, delayed or scaled back. The most obvious example is the huge downsizing of the sustainability legislative framework of the CSRD and CS3D through the first Omnibus Directive. 

The implementation of landmark digital legislation such as the Digital Services Act and the Digital Markets Act has already raised questions about enforcement capacity and external political pressure. The AI Act, initially presented as a flagship piece of EU digital sovereignty, also fell victim to postponements and softening through the ad hoc Omnibus.

Other major files, however, have encountered significant slowdowns or reversals. 

The revision of the EU chemicals framework under REACH Regulation has been repeatedly postponed, the Cybersecurity Act II will likely face some watering down, and with the IAA a core industrial principle was diluted before the co-legislators even began their examination.

This dynamic risks reinforcing the perception that the Union is strong in setting objectives but weaker in sustaining political consensus around them. The EU frequently launches ambitious strategies framed around competitiveness, sovereignty or strategic autonomy, but struggles to maintain the political alignment required to implement them decisively.

In the end, the Industrial Accelerator Act risks becoming less a turning point for European industrial policy than another Brussels compromise, one that signals ambition while leaving Europe’s deeper industrial competitiveness problems largely unresolved.

The lingering impression is that, faced with political complexity, the institutions are settling for incremental steps rather than defining a clear industrial path for Europe.