Understanding EU Files  Industrial Accelerator Act

As part of this, it will introduce a number of ‘Made in EU’ requirements, with the prospect of certain third countries being able to qualify for treatment equivalent to Union-origin products.

Alongside its origin requirements, the Act would introduce new rules on foreign investment designed to ensure that major investments generate benefits for the EU economy and industrial base. It would also streamline planning and permitting processes for priority manufacturing projects, for example through faster approval timelines and better coordination via a single administrative contact point.

The draft Act represents an escalation in the EU’s efforts to boost European manufacturing, reduce dependencies and strengthen the demand for European-made products and technologies. The goal is to increase manufacturing’s share of EU GDP from 14.3% in 2024 to 20% by 2035. 

Priority sectors include:

• Energy intensive industries, particularly steel, chemicals, cement, glass, paper, and non-ferrous metals like aluminium.

• Net-zero technologies, such as batteries, carbon capture systems, electrolyzers and heat pumps.

• Automotive industry. 

The definition of ‘Made in EU’ is difficult to define within the Act. This is because the proposal allows certain products from partners with which it has a Free Trade Agreement, customs-union partners and, in some circumstances, countries with membership to the WTO Government Procurement Agreement (GPA) to be treated equivalently to Union-origin products.

The catch is, the draft Act states that “the Commission will regularly assess whether the conditions for excluding a third country from the scope of the provisions deeming content originating in third countries to be equivalent to Union origin, are in place, and will take appropriate action”. In other words, the Commission has reserved the right to review whether third countries continue to meet the conditions for equivalent treatment. This means that access is not necessarily permanent and may be withdrawn if the Commission concludes that the relevant conditions are no longer met.

The UK government is lobbying strongly for UK inclusion in Made in EU schemes. But industry views in Europe are divided, with some favouring strict eligibility for only the 27 member states to reflect true local production, and those recognising that stricter content rules could lead to retaliatory measures from third countries, impacting firms with international supply chains, and industries that rely on global exports.