Policy Snapshot – Industrial Accelerator Act

16 July 2026

Executive summary

On 4 March 2026, the European Commission tabled its proposal for an Industrial Accelerator Act (IAA), formally a Regulation establishing measures to accelerate industrial capacity and decarbonisation in strategic sectors in the European Union.

The Commission identifies three main challenges:

1. Limited demand and weak price signals for European low-carbon industrial product
2. Supply chain vulnerabilities in strategic sectors and net-zero technologies
3. Slow deployment of industrial decarbonisation technologies

In a wider policy context, this diagnosis broadly aligns with the concerns raised with the Draghi report on European competitiveness, which emphasised weaker productivity growth, rising external competition, greater exposure to strategic dependencies, and the need to combine decarbonisation with industrial renewal.

The initiative sits in the broader policy logic of the Clean Industrial Deal and is intended to strengthen the competitiveness, resilience and decarbonisation of EU manufacturing in selected sectors, with particular attention to energy-intensive industries, net-zero technologies and the automative industry.

In the official impact assessment, this goal is broken down into five specific objectives:

1. Facilitating differentiation of low-carbon industrial products;
2. Boosting demand for European low-carbon products and net-zero technologies;
3. Maximising the quality and benefits of foreign investment;
4. Speeding up and simplifying permits for industrial decarbonisation;
5. Increasing investment projects in industrial decarbonisation areas.

In practice, the IAA proposal is a single-market instrument combining four main levers:

1. Demand-side measures for certain strategic products (including “Union Origin requirements” in public procurement and auctions)

The IAA introduces ‘Made in EU’ and low-carbon preferences in public procurement and public support schemes to boost demand for European industrial products, such as cement, aluminium, net-zero technologies like batteries, solar, wind, heat pumps, and nuclear.

IAA mandates two-phase EU-origin requirements for batteries across public procurement (Article 25b), renewable energy auctions (Article 26), consumer support schemes (Article 28b), and manufacturing support (Article 28d).

2. Ensure that foreign direct investments bring value to the EU

The legislation also imposes conditions (job creation, innovation, R&D activity, shareholding, sourcing, joint ventures) on foreign direct investment. Investments exceeding €100 million in strategic sectors, including batteries, require approval when a single third country controls more than 40% of global manufacturing capacity.

3. Simplify permitting procedures for industrial projects

The IAA streamlines and digitalises permitting procedures for industrial projects. This includes the introduction of a single digital ‘one-stop-shop’ with clear time limits as well as the principle of tacit approval at intermediate stages of the permit-granting process for energy-intensive decarbonisation projects.

The IAA introduces Industrial Acceleration Areas with streamlined permitting (area-wide permit and tacit approval) to promote new investments and facilitate decarbonisation. Projects in these areas will avail of profiling with investors and support with skills development.

4. Boost sustainable manufacturing

Third-country firms must deposit specified quantities of critical raw materials (lithium, cobalt, nickel, manganese, graphite) at EU stockpiling centres when Commission implementing acts trigger obligations due to third-country export restrictions (Articles 21-27).

The Commission also links the file to a broader industrialisation objective, under which the European Union and its Member States are to seek to ensure that manufacturing reaches 20% of EU GDP by 2035. To reach these goals, the IAA also amends existing legislation, most notably the Net-Zero Industry Act (NZIA), alongside the Single Digital Gateway Regulation, and the Construction Product Regulation. In other words, the proposal partly builds upon existing frameworks rather than creating an entirely separate regime.

As of March 2026, the file is now with the European Parliament and the Council under the ordinary legislative procedure. Under the draft text, the Regulation would enter into force on the day following publication in the official journal. Some sector specific requirements would phase in later on (for instance “Union Origin requirements” for public procurement and auctions).

Concretely, the European Commission assumes the IAA entry into force in 2027, but this is not a binding deadline in the proposal itself. In fact, the controversial nature of the text might lead to lengthy negotiations within and between the EU co-legislator (European Parliament and Council) and to the proposal being heavily amended.

The Committee of the Regions has launched a consultation, led by Rapporteur Willy Borsus, inviting stakeholders to provide input by 7 May 2026 on key aspects of the Industrial Accelerator Act, including the role of local authorities, administrative burden and impact on public procurement, regional balance, and EU funding and links to other EU legislation.