The European Commission has proposed the Industrial Accelerator Act, a flagship “Made in EU” initiative that would tie parts of public procurement and support schemes to local-content and low‑carbon requirements in selected strategic sectors. China’s commerce ministry has criticized the plan as discriminatory and warned it could respond if Chinese companies’ interests are harmed.
The European Commission on March 4, 2026 proposed the Industrial Accelerator Act (IAA), a measure designed to boost European manufacturing capacity and reduce dependencies in a handful of strategic sectors by using public purchasing power and certain public support schemes.
European officials have argued that the initiative responds to complaints from EU companies that they face intense competition—particularly in areas such as electric vehicles, batteries and some industrial materials—from producers that benefit from heavy state support, including in China.
Stéphane Séjourné, the European Commission’s executive vice president responsible for industrial strategy, has framed the proposal as a way to use public money to strengthen domestic production and reduce vulnerabilities. In public reporting cited by other outlets, he said the measure would “create jobs by directing taxpayers’ money to European production, decreasing our dependencies and enhancing our economic security and sovereignty.”
Under the proposal, “Made in EU” and/or low-carbon criteria would be introduced for public procurement and public support in sectors initially including steel, cement, aluminium, the automotive value chain and net-zero technologies. In the automotive area, industry summaries of the draft proposal describe requirements that vehicles supported by certain public schemes be assembled in the EU and meet local-content thresholds—commonly described as a 70% threshold for non-battery components, with additional requirements for certain battery components.
The proposal also includes provisions that would tighten conditions on some large foreign direct investments in specified strategic sectors. Legal and policy analyses of the draft describe the possibility of attaching requirements to certain foreign investments—such as measures related to technology, employment and value-chain integration—rather than an across-the-board ban on foreign participation.
China’s Ministry of Commerce has warned that it views the initiative as “systemic discrimination” against foreign firms and has said that if the EU presses ahead in ways that harm Chinese companies’ interests, Beijing would take “countermeasures” to safeguard the rights of its enterprises. Chinese industry groups in Europe have also criticized aspects of the plan, including provisions they characterize as forced technology transfer and tougher scrutiny of foreign investment.
Within the EU, the proposal has triggered debate among member states over how far “Made in EU” requirements should go and how they interact with the bloc’s international trade commitments. Analyses of the draft indicate the Commission aims to align the approach with EU obligations such as the WTO Government Procurement Agreement and certain free-trade arrangements, while still encouraging more local production for publicly funded projects.
The proposal now moves into the EU’s ordinary legislative process, requiring approval by the European Parliament and EU member states in the Council before it can become law.
