Legislative proposal

2026/0068 (COD) – Proposal for a Regulation of the European Parliament and of the Council establishing a framework of measures for the acceleration of industrial capacity and decarbonisation in strategic sectors and amending Regulations (EU) 2018/1724, (EU) 2024/1735 and (EU) 2024/3110

Next steps in the European Parliament

For the latest developments in this legislative procedure, see the Legislative Train Schedule: 2026/0068(COD)

Issue

The global market for net-zero technologies¹ is projected to almost treble by 2035, while the EU's capacity is lagging behind. Overall manufacturing as a share of EU GDP fell from 17 % in 2000 to 14 % in 2024. According to the Commission's analysis, the demand for European low-carbon industrial products remains low, industrial decarbonisation technologies are not yet deployed at scale and supply chain vulnerabilities in strategic sectors persist. The initiative is thus aimed at increasing the demand for low-carbon technologies and products made in the EU in order to boost resilience and decarbonised domestic industrial production. This is in line with the recommendations of the 2024 Draghi report on European competitiveness regarding energy-intensive industries and clean technologies. The proposal was also presented as one of the initiatives to be adopted under the Clean Industrial Deal, under the name Industrial Decarbonisation Accelerator Act (the name was later shortened to Industrial Accelerator Act). The recent joint 'One Europe, one market' roadmap, agreed on 24 April 2026, sets the end of 2026 as the target date for reaching an agreement on the IAA.

Main points of the proposal

On 4 March 2026, the European Commission tabled a legislative proposal on the Industrial Accelerator Act to strengthen the competitiveness of EU industry in the light of increased international pressure. It establishes a framework to support the development, competitiveness and resilience of the EU manufacturing sector, with a focus on selected strategic sectors, while contributing to EU climate objectives, economic security and high-quality jobs. The proposed act sets a target to ensure that industrial manufacturing would account for at least 20 % of EU GDP by 2035.

Specific measures to achieve the regulation's objectives include faster permit-granting procedures for industrial manufacturing projects, including energy-intensive industry decarbonisation projects. Member States would be required to set up a single access point at national level for project promoters to submit a single application for industrial manufacturing projects. They would also need to establish a single permit-granting procedure based on one application covering all permits required for industrial manufacturing projects, and designate a competent authority to coordinate it.

The proposed Industrial Accelerator Act would stipulate the minimum share of low ‑ carbon products to be used from 2029 in both public procurement and other public support schemes for buildings, infrastructure and civil motor vehicles. Annex II sets out the minimum percentages for steel, concrete and mortar, and aluminium.

Furthermore, the act would link financial support, public procurement and CO₂ super‑credits ² for electric and other zero‑emission vehicles to strict Union origin ('Made in EU') rules, requiring that eligible corporate and publicly procured zero-emission vehicles (and small zero‑emission vehicles earning super‑credits) be assembled in the Union and meet detailed minimum EU‑content thresholds for components, batteries, e‑powertrains and electronics.

The IAA would establish conditions for foreign direct investment over €100 million in emerging strategic sectors where more than 40 % of the global manufacturing capacity is held by the third country of which the foreign investor is a national or undertaking. This would apply to FDIs in the manufacture of batteries, electric vehicles and solar photovoltaics, and the extraction, processing and recycling of critical raw materials. Some investments are excluded (Article 17), for instance portfolio investments and investments covered by economic partnership and free trade agreements in force or provisionally applied. Article 18 would set out six requirements for FDI, including having ownership interests below 49 % of the share capital; concluding agreements on licensing intellectual property rights; research and development spending of at least 1 % of the company's gross annual revenue; EU workers accounting for at least 50 % of the workforce³; and a strategy – to be published on the investor's website – for enhancing EU value chains and ensuring that at least 30 % of inputs used for the products placed on the EU market are sourced from the EU.

Member States would have to designate at least one industrial manufacturing acceleration area on their territory (within 12 months following the entry into force of this regulation) to cluster industrial manufacturing projects in one or several of the strategic sectors listed in Annex I (see Table 1). Elements to take into account for the designation decision relate to the impact on EU supply security in the strategic sectors, the potential of the area to support the deployment of production capacity, the number of SMEs (small and medium-sized enterprises) and SMCs (small mid-caps) that would benefit and the regional level of development. Article 25 outlines the procedure for how Member States would have to designate the area. This includes defining a clear geographic scope, prioritising locations where industrial projects would not have significant environmental impacts and outside Natura 2000 sites, while also taking into account climate risks and prioritising built surfaces and industrial sites. The industrial needs of the area, financing requirements, supply chains, feasibility of connection to low-carbon energy supply, and workforce skills must also be factored in. Furthermore, Member States would need to ensure a number of enabling conditions (Article 26) to facilitate the development of the industrial manufacturing areas. They would also be required to prepare and issue an aggregated baseline permit authorising industrial activities located in the area.

Lead markets for certain products in strategic sectors would be supported through EU origin requirements and low-carbon requirements in the context of public procurement and public support schemes. In addition to the 'content of Union origin' (Article 7), the act would also establish the concept of 'content equivalent to Union origin'. In terms of public procurement, this means content originating in third countries with which the EU has concluded an agreement establishing a free trade area or a customs union, or that are parties to the World Trade Organization Agreement on Government Procurement, where relevant Union obligations exist under that agreement (Article 8). For public intervention other than public procurement, 'content equivalent to Union origin' would mean content originating in third countries with which the Union has concluded an agreement establishing a free trade area or customs union (Article 9). A third country may be excluded in whole or in part by a Commission delegated act under certain conditions (such as avoiding dependencies or threats to supply security, or if a country fails to provide national treatment to EU products or entities under relevant agreements).

Parliament's prior position

In its resolution of 3 April 2025 on energy-intensive industries, Parliament urged quicker permitting and licensing processes for clean energy projects. It also called for 'the creation of lead markets for clean and circular European products, via non-price criteria in EU public procurement, such as sustainability and resilience and a European preference for strategic sectors, as well as by creating voluntary labelling schemes and minimum EU content requirements in a cost-effective way'. In its resolution of 19 June 2025 on the Clean Industrial Deal, Parliament called on the Commission to 'further address permitting bottlenecks for industrial access to energy and industrial decarbonisation in the Industrial Decarbonisation Accelerator Act, including through the adoption of measures to accelerate judicial and administrative procedures'. The resolution of 9 September 2025 on public procurement emphasised public procurement's role as a major strategic lever to enhance industrial resilience and sustainability of supply chains. It also encouraged the Commission to examine ways to prioritise the 'European preference' principle in procurement, and highlighted the need to anchor lead markets in public tenders to strengthen Europe's strategic independence in key sectors.

Prior positions of other EU institutions

The European Council conclusions of 20 March 2025 underlined the urgent need to strengthen Europe's competitiveness, welcoming the Clean Industrial Deal and the competitiveness compass. It called on the Commission to follow up with simplification initiatives, including on industrial decarbonisation, and highlighted the need 'to secure Europe's industrial innovation, renewal and decarbonisation', while paying particular attention to traditional industries in transition, such as energy-intensive industries.

At the Council of the EU meeting on 29 September 2025 (Competitiveness Council), the joint trilateral non-paper by Germany, France and Italy on the upcoming Industrial Decarbonisation Accelerator Act was discussed. The non-paper emphasised the following key aspects: an appropriate framework for incentivising investments, sufficient demand, effective protection against carbon leakage, competitive energy prices, and a level playing field for EU industries.

The Competitiveness Council of 8‑9 December 2025 discussed the joint declaration of the Ministerial Alliance for Energy-Intensive Industries signed by 10 Member States, which focused on the following priorities: European carbon markets (a stable ETS carbon price and CBAM revision), competitive energy prices and a genuine energy Union, countering the risks of trade diversion and achieving a balanced approach to decarbonisation efforts.

Preparation of the proposal

The Commission carried out a public consultation between 16 April and 9 July 2025. The stakeholders pointed out a range of challenges faced by energy-intensive industry, mainly around access to affordable renewable energy, unfair competition, the high capital and operational costs of decarbonisation, downstream sectors' reluctance to pay for a green premium, complex permitting procedures and access to funding. They also supported the 'Made in EU' requirements and the idea of lead markets for low-carbon industrial products as the main tool to stimulate demand and investment. Streamlining and speeding up permitting processes was seen as highly important, and foreign investment measures were deemed beneficial in terms of attracting capital.

The proposal was also subject to an impact assessment, which identified the initiative's main aim as supporting EU industry competitiveness and resilience in the face of increased global pressure, while accelerating decarbonisation. The challenges included limited demand for European low-carbon industrial products at current prices, supply chain vulnerabilities in strategic sectors and industrial decarbonisation technologies not deployed at scale. In order to address this, the Commission considered three policy options, with varying degrees of intervention. According to the assessment, the middle option was considered the most effective and proportionate. It introduces low-carbon and 'Made in EU' requirements for energy-intensive materials (steel, cement and aluminium) in selected sectors (such as automotive and construction) into public procurement and support schemes. Moreover, it includes a unified digital procedure for permits in the manufacturing sector and lays down voluntary conditions for investment above certain thresholds for battery supply chains and relevant energy-intensive industries. It also requires Member States to designate industrial areas. According to the Commission's cost and benefit analysis, this option would bring overall net benefits of about €8.7 billion for the EU economy in 2030.

The Regulatory Scrutiny Board (RSB) issued two opinions on the IAA impact assessment. In its negative opinion, the RSB concluded that the IA did not adequately justify the need for the initiative, lacked a dynamic baseline and analysis of key problem drivers and technologies, and failed to provide a robust, quantified assessment of total costs, their pass‑through and impacts on industry resilience and FDI. In its positive opinion with reservations, the RSB acknowledged improvements but still required the IA to strengthen modelling of demand and investments, fully monetise and compare costs and benefits across options (including distributional impacts), better justify the choice of a less efficient preferred option and deepen its analysis of economic security, cumulative cost effects and SME impacts before inter‑service consultation.

Points of view

BusinessEurope said the proposal arrives at a crucial moment for EU industry, but warned that parts of it could create new problems if the design is not balanced, especially on permitting, demand measures and foreign investment rules. According to Eurochambres, faster permitting processes and efforts to support industrial investment are welcome, but 'Made in EU' and local content rules must stay practical and proportionate, especially for SMEs. IndustriAll Europe and the European Trade Union Confederation (ETUC), representing workers and trade unions, backed the direction of the act but pushed for stronger social conditions, with ETUC stating that a made in Europe policy must incorporate binding requirements on wages, working conditions and skills development rather than relying solely on origin labelling.

Environmental NGOs were more critical of the draft, welcoming its general direction but calling for greater clarity and firmer rules to ensure that the transition away from fossil fuels does not come at the expense of nature (by preventing aggregated environmental assessments in acceleration areas from weakening nature protection, making 'low-carbon' definitions more specific and establishing stronger rules for the phasing out of fossil fuel technologies). The European Environmental Bureau argued that the act's acceleration areas and procurement quotas were not yet matched by strong definitions, binding decarbonisation timelines or firm limits on polluting technologies. Climate Action Network (CAN) Europe welcomed the demand-side focus, but said the act must stay tightly aligned with EU climate goals, avoid undermining public support and retain a clear fossil phase-out trajectory.

WindEurope welcomed the proposal as an important political signal that correctly identifies wind energy as a strategic sector for Europe's industrial leadership and economic resilience, but stressed that a simple and harmonised implementation of the new rules will be crucial. SolarPower Europe called the act a 'watershed moment' for EU industrial policy, praising the balance for 'Made in EU' solar support. However, it warned that 'Made in EU' must genuinely mean production in the EU and the European Economic Area (EEA). Hydrogen Europe called the proposal a step forward but lacking ambition, urging co-legislators to strengthen its ambition, scope and clarity, especially for clean hydrogen supply chains. The European Steel Association (Eurofer) welcomed the act's proposed measures on lead markets for low-carbon materials in clean energy, mobility and infrastructure (covering energy-intensive and net-zero tech), but called for binding 'Made in Europe' criteria based on steel melted/poured in the EU and EEA.