EU Commission Proposes Industrial Accelerator Act with Made-in-EU Cleantech Requirements

The European Commission has released its Industrial Accelerator Act proposal, introducing made-in-EU and low-carbon requirements for procurement of clean technologies including batteries, solar, wind, heat pumps, and electric vehicles. The package also proposes conditions on foreign investments over €100 million in strategic sectors where a single country controls more than 40% of global manufacturing capacity.

The IAA is expected to save more than 30 million tonnes of CO2 in energy-intensive industries, generate up to €10.5 billion across the automotive value chain, and more than €600 million across steel, aluminum, and cement. The proposal addresses supply chain vulnerabilities, limited demand for European low-carbon industrial products, and slow deployment of industrial decarbonization technologies due to fragmented permitting. It introduces made-in-EU requirements for public procurement of batteries, BESS, solar PV, heat pumps, wind, electrolyzers, nuclear technologies, and electric vehicles and components, and low-carbon requirements for steel in automotive and construction.

The Commission noted that sectors covered by the IAA, including batteries and solar PV, face market distortions from subsidies in markets outside the EU — specifically citing China, which accounts for over 80% of global manufacturing capacity for batteries and solar photovoltaics. The IAA's definition of made-in-EU includes products from countries with free trade or customs union agreements with the EU, which could provide market access advantages for partner countries. The package also proposes Industrial Acceleration Areas to create clean manufacturing project clusters and a single digital permitting process to speed up approval for industrial projects.

The proposed IAA will be submitted to the European Parliament and Council for negotiation before it can be adopted. For India, the IAA carries both challenge and opportunity. Made-in-EU and low-carbon procurement requirements for clean technologies could restrict market access for Indian-manufactured clean energy components sold to EU public buyers. However, India's free trade agreement negotiations with the EU — if concluded — could qualify Indian-made products under the third-country provisions of the IAA's made-in-EU definition. India's clean technology manufacturing ambitions, supported by production-linked incentives, should factor in the IAA's evolving procurement landscape as a key export market consideration.

Key figure — 30 million tonnes of CO2 savings expected in energy-intensive industries