The EU Industrial Accelerator Act (IAA): What Manufacturers and Suppliers Need to Know

On 4 March 2026, the European Commission proposed the Industrial Accelerator Act (IAA), a regulation intended to strengthen manufacturing in the EU. The proposal would link access to a large part of public demand to EU origin and low-carbon criteria. This article explains what the IAA proposes, which sectors it covers, how it connects to CBAM and how ARTEM supports manufacturers that relocate production to the EU.

What the Industrial Accelerator Act is

The IAA is the main legislative instrument of the Clean Industrial Deal, which the Commission presented in February 2025. It was originally titled the “Industrial Decarbonisation Accelerator Act”.

The proposal responds to three pressures on European industry: higher energy costs than in the United States and Asia, low-priced exports from Chinese industrial overcapacity, and more assertive industrial policy in other economies, including domestic content rules in the United States.

The IAA marks a shift in EU procurement policy. Public procurement in the EU has so far been largely open and non-discriminatory. The IAA would use public demand to support production in the EU.

Which sectors are covered

Sector group	Products named in the proposal
Energy-intensive industries	Steel, concrete and mortar, aluminium
Electrified vehicles	Battery electric, plug-in hybrid and fuel-cell passenger cars and vans
Net-zero technologies	Battery storage, solar PV, heat pumps, wind, electrolysers, nuclear

Defence procurement is not covered by the IAA. Some high-tech sectors, including AI, semiconductors and quantum technologies, are excluded from its scope.

The four main measures

“Made in EU” and low-carbon requirements. Minimum requirements for EU origin and low-carbon content apply in public procurement, public support schemes and renewable energy auctions.
Foreign direct investment conditions. Investments of more than €100 million in batteries, electric vehicles, solar PV and critical raw materials from countries controlling more than 40% of global manufacturing capacity would require approval.
Faster permitting. A single digital application through a national access point and one coordinated permitting procedure, with a 45-day completeness check.
Industrial acceleration areas. Each member state designates at least one area with consolidated baseline permits for strategic manufacturing.

“Made in EU” and low-carbon requirements in detail

The requirements apply to three types of public spending: direct public procurement, government support schemes such as subsidies and grants, and auctions for clean energy technologies.

For construction materials bought directly by public authorities, minimum thresholds would apply from 1 January 2029:

Material	Low-carbon share	EU origin required
Steel	At least 25%	No
Concrete and mortar	At least 5%	Yes
Aluminium	At least 25%	Yes

For electric passenger cars and vans in public procurement, vehicles would have to be assembled in the EU six months after the regulation enters into force. At least 70% of the value of non-battery components would have to come from the EU. EU-origin requirements for batteries would rise from three components in the first year to five in the third, including cells, cathode active material and battery management systems.

For clean energy technologies, EU-origin requirements for components increase in steps one, three, four and six years after entry into force. For certain technologies, no more than 50% of the value of the final product may come from a single third country.

The same thresholds apply to government support schemes. Member states would have to apply them to at least 45% of national budgets for construction and infrastructure schemes. In renewable energy auctions, at least 40% of the volume auctioned each year would have to apply the EU-origin and low-carbon criteria.

Which countries count as “Union origin”

Products from countries with a free trade agreement, a customs union or a government procurement agreement with the EU can also qualify. This applies, for example, to Japan, South Korea, Türkiye and the United Kingdom, provided they give EU products equivalent access in return.

The Commission can withdraw this status. This applies where a country discriminates against EU products in the covered sectors, or where reliance on imports from that country would create a strategic dependency.

Conditions for foreign direct investment

An investment above the threshold would be approved only if it meets at least four of six conditions. One mandatory condition is that at least 50% of the workforce are EU workers. Further conditions can include joint ventures, technology and IP sharing, and minimum EU workforce thresholds. The Commission could override national approvals for investments above €1 billion.

The rules apply by sector, not by country. In practice, they are aimed mainly at Chinese investment in strategic sectors.

How the IAA connects to CBAM and the EU ETS

The IAA and the Carbon Border Adjustment Mechanism (CBAM) cover some of the same materials: steel, aluminium and cement. CBAM applies on the import side and puts a carbon price on carbon-intensive imports. The IAA applies on the demand side and directs public spending towards low-carbon products made in the EU.

The proposal empowers the Commission to introduce voluntary greenhouse gas intensity rankings. These would be based on data from the EU Emissions Trading System (ETS) and on CBAM methodologies. Emissions data collected for CBAM today could therefore become relevant for public tenders in the future.

What the IAA means for supply chain documentation

The IAA is a public procurement and investment instrument. It does not create new product requirements for the EU market as a whole. Its practical effect, however, depends on data that many manufacturers do not yet hold in a structured form.

Suppliers in public tenders and support schemes would need to show three things: where a product and its components were made, what share of the value comes from which country, and the carbon intensity of the materials used.

Much of this information overlaps with data already required under other EU rules. CBAM requires embedded emissions data from production installations. The Batteries Regulation requires a battery passport with composition and, later, carbon footprint data. Companies that already collect this data from suppliers in a traceable form will find it easier to meet IAA requirements once they apply.

How ARTEM supports manufacturers relocating production to the EU

For manufacturers based outside the EU, the IAA changes the calculation. Where public contracts, support schemes or investment approvals depend on EU origin, moving parts of production into the EU can become a strategic decision. The automotive sector is the clearest example. Under the proposal, electric cars and vans bought by public authorities would have to be assembled in the EU, with at least 70% of the value of non-battery components coming from the EU.

Relocating production is not only a question of plants and investment. It also changes the compliance picture. A plant in the EU makes the company an EU manufacturer with direct responsibility for the products it places on the market. Supply chains have to be documented in a way that shows where components and materials come from. And the machinery installed in the new plant has to meet EU requirements as well.

ARTEM supports automotive OEMs and their suppliers in three areas:

Supply chain due diligence. ArtemLEX collects documents and data directly from suppliers across multi-tier supply chains, including from remote production sites in China, with local teams supporting on site. Each submission is checked, receives a traffic-light rating and a risk analysis, and gaps go back to the supplier as concrete tasks. The result is a traceable record of where components and materials come from, which is the basis for proving EU origin and for due diligence obligations such as those under the Batteries Regulation.
Product compliance for vehicles, components and batteries. Vehicles and automotive parts are among the product categories ArtemLEX supports. The platform determines which regulations and standards apply to each product group, checks purchased components and their supplier documentation, and generates technical documentation where possible. This covers, for example, the Batteries Regulation including the battery passport, REACH for substances in components, and CBAM for imported steel and aluminium.
Compliance for production equipment and EU representation. Machinery shipped to a new plant in the EU must meet the Machinery Regulation (EU) 2023/1230, which applies from 20 January 2027. ArtemLEX checks the technical documentation of machinery and components. For manufacturers without their own EU entity, ARTEM’s EU-based legal entity can act as EU authorised representative, take over importer liability towards EU authorities and provide VAT and EORI numbers during the transition.

The decision on where to produce stays with the company. ARTEM makes sure that the compliance side of that decision is documented and traceable from the start.

Status and next steps

The IAA is in the ordinary legislative procedure. The European Parliament and the Council must agree on a common text before it can enter into force. Both institutions are expected to propose amendments, and individual thresholds may change.

The proposal is politically contested. France has argued for a strict EU-only approach. Several Nordic and Central European member states prefer a “Made with EU” approach and warn of higher costs, more bureaucracy and possible retaliation by trading partners.

The current target dates, according to the proposal, are:

On entry into force: foreign investment conditions and permitting reforms apply.
Six months after entry into force: local content rules for electric vehicles in public procurement apply.
1 January 2029: low-carbon requirements for steel, concrete and aluminium in public procurement apply.

Some important FAQs

Is the Industrial Accelerator Act already in force? No. The IAA is a proposal published by the European Commission on 4 March 2026. It must be adopted by the European Parliament and the Council before it applies.

Does the IAA apply to all products sold in the EU? No. The IAA applies mainly to public procurement, public support schemes and auctions in selected sectors, and to foreign investment in strategic sectors. It does not set general requirements for all products placed on the EU market.

Do products from outside the EU count as “Made in EU”? Products from countries with a free trade agreement, customs union or government procurement agreement with the EU can qualify, provided those countries give EU products equivalent access. The Commission can withdraw this status.

How is the IAA related to CBAM? Both cover steel, aluminium and cement. CBAM puts a carbon price on imports. The IAA creates demand for low-carbon products made in the EU. Planned carbon intensity rankings under the IAA would draw on ETS data and CBAM methodologies.

How does ARTEM support automotive OEMs relocating production to the EU? supports three areas: supply chain due diligence through documented and checked supplier data, product compliance for vehicles, components and batteries, and compliance for the machinery installed in new EU plants. For manufacturers without their own EU entity, ARTEM can also act as EU authorised representative and take over importer liability towards EU authorities.

Conclusion

The IAA would steer EU public procurement and support schemes towards products made in the EU with a lower carbon footprint, and set new conditions for large foreign investments in strategic sectors. It is still a proposal, and thresholds and dates may change in the negotiations between the European Parliament and the Council. The direction is nevertheless clear: proof of origin and carbon data will carry more weight. For manufacturers outside the EU, especially in the automotive sector, this can make relocating production an option worth considering. ARTEM supports that step on the compliance side, from supplier documentation to the machinery in the new plant.

Key facts

Proposal published by the European Commission on 4 March 2026 (procedure 2026/0068(COD), COM(2026) 100).
Target: manufacturing at 20% of EU GDP by 2035, up from 14.3% in 2024.
Sectors covered: energy-intensive industries, net-zero technologies and the automotive sector.
Four main measures: “Made in EU” and low-carbon requirements, foreign investment conditions, faster permitting, industrial acceleration areas.
Status: under negotiation between the European Parliament and the Council. Provisions may change.

Sources

European Parliamentary Research Service: Industrial Accelerator Act (EU Legislation in Progress), 21 May 2026