The key points of the new
European industrial legislation

The approval of the European Union’s new industrial legislation, the Industrial Accelerator Act (IAA), promoted by the European Commission, is drawing closer. This initiative responds to the political objective of strengthening the Union’s technological, economic, and strategic autonomy. In this context, the latest draft of the Regulation sets the target that, by 2035, manufacturing should account for at least 20% of the EU’s GDP. In a previous version of the text, the target date had been set for 2030.

According to World Bank data, manufacturing currently represents around 14% of the European economy. Against this backdrop, the European Commission is now willing to establish a common framework to accelerate industrial capacity and decarbonisation in sectors that are central to Europe’s economy. These include energy-intensive industries such as steel, cement, and aluminium; net-zero technologies such as batteries, solar, wind, and hydrogen; and the automotive industry together with its supply chain.

In developing this new Regulation, the EU has identified three key challenges. First, dependence on third countries in strategic sectors and the concentration of certain production capacities outside the EU. Second, insufficient demand for low-carbon industrial products manufactured in the EU. Third, the complexity and slowness of current procedures, which lead to delays in the implementation of industrial projects that are critical for European competitiveness and the climate transition.

On this basis, the Union aims to adopt a more strategic approach that enables it to leverage its economic weight and the value represented by access to the internal market. To achieve this, the EU is activating a set of public instruments designed to protect strategic value chains for its autonomy and technological development, with the objective of reducing critical external dependencies. In this context, it seems that the strategic use of public intervention is one of the central tools.

Regarding foreign investment, the draft Regulation seems to set out specific criteria for assessing investments in strategic sectors. In principle, as foreseen in this preliminary draft, controls would apply to investments originating from countries that account for more than 40% of global manufacturing capacity in the sectors concerned. The objective is to preserve the openness and attractiveness of the internal market, while ensuring that foreign investment provides genuine added value to the Union’s economy. The aim would be not to close the market, but to ensure that economic openness effectively contributes to strengthening Europe’s strategic autonomy.

Another key aspect of the draft relates to simplifying administrative processes, increasing reliance on digitalisation, and setting maximum time limits for permitting procedures. In addition, the draft envisages that the Member States may be allowed to designate industrial acceleration zones, to facilitate the geographical clustering of industrial activities and promote more favourable conditions for industries established within them.

One of the most debated elements concerns the “Made in Europe” principle. The draft Regulation introduces requirements applicable to certain specific components of net-zero technologies, with the aim of reinforcing the Union’s manufacturing capacity. According to consultations carried out during the preparatory process, stakeholders broadly agree that the creation of “lead markets” might be a key factor in safeguarding the competitiveness of European clean-tech industries and the automotive sector.

Stakeholders have also underlined that “Made in Europe” requirements may help to ensure that the market for low-carbon industrial products and clean technologies is not undermined by competition from outside the EU.

From a legal perspective, the new Regulation seeks to establish a common framework that prevents regulatory fragmentation among Member States. The aim is to ensure that measures intended to strengthen competitiveness and support decarbonisation are adopted coherently across the internal market.

The Industrial Accelerator Act represents a significant evolution in the Union’s economic policy and reflects an explicit intention to reinforce the EU’s manufacturing base as a central pillar of its future prosperity and autonomy.

The information and data referenced in this article are based on a preliminary draft of the Regulation that has not yet been adopted in its final form. As a result, some of the elements described may change during the legislative process.