The European Union’s latest Industrial Accelerator Act brings potential risks as it adds a layer of complexity for foreign businesses operating and investing in the EU.
As previously reported, the European Commission adopted a legislative proposal to increase demand for low-carbon, European-made technologies and products.
The Industrial Accelerator Act (IAA) aims to boost manufacturing, grow businesses and create jobs in the EU, while also supporting industry’s adoption of cleaner, future-ready technologies.
In line with the recommendations of the Draghi report, the IAA introduces targeted and proportionate ‘Made in EU’ and low-carbon requirements for public procurement and public support schemes. These will apply to selected strategic sectors including steel, cement, aluminium, cars and net zero technologies.
Speaking to Mining.com.au, Reed Smith Brussels office partner Christian Filippitsch says there is a “real tension at the heart of this act”.
“The irony is stark: Europe is rolling out the welcome mat for domestic industry while pulling it away from foreign investors,” Filippitsch tells this news service.
“In a global race for capital, that’s a gamble.”
The IAA introduces new regulatory hurdles for investors from certain third countries, requiring prior notification and approval for foreign direct investments exceeding €100 million in emerging strategic sectors. These sectors include batteries, solar and electric vehicles.
Filippitsch argues that this raises the question of whether this is really needed and cannot be dealt with by simply adjusting the FDI screening framework in the EU.
“The IAA should rather leave room and incentives for strategic partnerships with innovative third country players,” Filippitsch says.
“This new notification obligation under the IAA could be seen as another example of EU over-regulation. It operates separately from, and in addition to, pre-existing EU and national regulatory frameworks, including merger control rules, FDI screening, and the EU’s Foreign Subsidies Regulation, which could be used to address similar concerns regarding economic security and supply chain resilience.”
Filippitsch explains that policymakers need to be careful, as industrial sovereignty is a “legitimate” goal, but if the act tips into protectionism, Europe risks winning the political argument while losing the investment competition.
Driving industrial competitiveness
The IAA proposal includes streamlined permit-granting procedures for industrial manufacturing projects and seeks to create new markets for low-carbon products through new low carbon and union origin requirements in public procurement. It also required member states to designate industrial manufacturing acceleration areas to promote clustering and financing of industrial projects.
Filippitsch adds that streamlining permissions for industrial projects is important but remains only one of many measures to meaningfully accelerate in the strategic sectors.
“Better access to affordable energy and critical raw materials and more innovation remain the key drivers for the EU’s industrial competitiveness and strategic autonomy going forward,” he says.
Filippitsch explains that achieving decarbonisation and energy security remain core challenges to safeguard the EU’s competitiveness and strategic autonomy.
“Fundamental to this are more innovation, access to affordable energy, but it also requires the strengthening of international and reliable partnerships and openness to foreign investment,” he adds.
As of 2026, the European energy market is characterised by the transition to renewable energy, with wind and solar anticipated to surpass fossil fuels in electricity generation.
According to the European Commission, renewable energy represented 25.2% of energy consumed in the EU as of 2024 – up from 24.6% in 2023.
Write to Aaliyah Rogan at Mining.com.au
Images: EU Alliance & Reed Smith
