On Wednesday (4 March), the European Commission unveiled its long-delayed Industrial Accelerator Act (IAA). Aimed to boost demand for low-carbon, European-made technologies and products, the proposal introduces local-content and low-carbon requirements, alongside new foreign investment restrictions in selected critical sectors – a first step in what is likely to be a broader shift.
The final text is narrower than earlier drafts. The most controversial element – an annex listing “other sectors critical to the Union’s economic security,” including semiconductors, artificial intelligence and biotechnologies, among others – was dropped in the final version.
Instead, the adopted proposal concentrates on selected net-zero technologies and energy-intensive industries such as steel, aluminium, chemicals, cement, refined petroleum products, paper and plastics, alongside related value chains.
That narrowing followed intense internal debate. Long meetings reportedly preceded publication, as member states and commissioners clashed over scope and ambition. Some capitals argued for a hard-edged “buy Europe” approach; others warned that excluding cutting-edge sectors risked fragmenting innovation ecosystems and breaching international commitments.
The most contentious decision was never to be taken anyway: what, precisely, counts as a product “made in the EU.” In the starting text, that decision is to be made by the Commission six months after entry into force, determining which third countries may qualify as “trusted partners.” Separate sector-specific delegated acts will define what constitutes an “EU-based producer,” taking into account things like place of incorporation, location of main manufacturing facilities and number of employees in the EU.
The proposal also amends the foreign investment rules in designated sectors. Acquisitions above €100 million would be subject to limits where an investor’s home country accounts for more than 40% of global manufacturing capacity in the relevant sector, with direct ownership capped at 49%. The notification threshold has been raised, the review period shortened, and the compliance criteria adjusted to simplify implementation while maintaining screening requirements in strategic industries.
The political context explains both the ambition and the caution. Commission president Ursula von der Leyen has framed the initiative as a response to Europe’s industrial dependence and the concentration of clean-tech capacity abroad. Industrial commissioner Stéphane Séjourné, French, has championed a stronger “European preference,” though several northern and pro-market governments have pushed back against overt protectionism. The debate has exposed enduring fault lines over whether Europe should emulate “buy national” regimes elsewhere or pursue a more open “made-with-Europe” model.
Hold tight
The IAA is unlikely to be the final word, but it does mark the start of Europe’s “Made in Europe” era. A wider reform of EU public procurement rules is expected in the second quarter of 2026, which could extend local-content principles into more sectors. At the same time, talks between the European Parliament and the Council on the forthcoming Critical Medicines Act (CMA) have already included proposals for domestic-content requirements in essential pharmaceuticals. If retained, these would carry the same approach into health supply chains. Resistance remains, but the momentum is hard to reverse.
