On 4 March 2026, the European Commission published COM(2026) 100 final — a proposal for the Industrial Accelerator Act. In scope and ambition, it is the most significant EU industrial policy intervention since the European Green Deal, and in its approach to trade, a genuine departure from Brussels' long-standing preference for market neutrality.
The IAA's core objective is to lift EU manufacturing from 14% of GDP in 2024 to 20% by 2035. It pursues this through four instruments: local content and low-carbon requirements on procurement, foreign investment screening, permitting reform, and the designation of industrial acceleration zones.
According to Trevor Sutton and Evelyne Williams of the Center on Global Energy Policy at Columbia University SIPA, the IAA "reflects an emerging consensus in Brussels that carbon pricing and emissions standards... may be insufficient to secure European industrial interests in a world where major competitors aggressively deploy fiscal and trade measures."
The local content and carbon intensity provisions are where the IAA gets commercially significant. For public procurement of products using steel, aluminium, concrete, and mortar — and for government support schemes involving EVs, solar, wind, and batteries — a specified share of the covered product must be of "Union origin" and meet low-carbon standards.
"Union origin" is broader than it sounds. It includes products made in countries with which the EU has a free trade agreement or customs union, and in procurement contexts extends to WTO Government Procurement Agreement (GPA) members. The practical effect: Chinese suppliers, who have neither an FTA nor GPA status with the EU, face full Union-origin requirements across all intervention types, with no equivalence route available.
The foreign investment screening mechanism targets the same dynamic. Investments exceeding €100 million in batteries, EVs, solar technologies, and critical minerals require prior approval if the investor's home country controls more than 40% of global manufacturing capacity in the relevant sector. As Sutton and Williams note, that threshold "currently applies only to China across all four covered sectors."
China's Ministry of Commerce submitted formal comments to the Commission on 24 April, warning that the IAA "poses serious investment barriers and systemic discrimination." Beijing specifically objected to mandatory technology transfers, local content requirements, and equity limits for third-country investors, calling them potential WTO violations that could "destabilise global supply chains." China vowed "countermeasures" if the legislation proceeds.
EU Trade Commissioner Maroš Šefčovič did not blink, pledging to "fight tooth and nail for every European job, for every European company, for every open sector."
The IAA's WTO compliance is the most significant unresolved issue. Local content requirements are generally prohibited under WTO rules, including in the renewable energy context. Whether European renewable energy auctions fall within GPA scope or under trade agreement exceptions is legally unclear — and likely to be tested at the WTO if the regulation passes in anything close to its current form.
There are also inflation risks. Local content and low-carbon requirements can raise input costs. The IAA includes opt-outs when Union-origin products are more than 25% more expensive in procurement — but that threshold may not prevent meaningful cost increases in sectors already under margin pressure.
The Industrial Accelerator Act is the EU's clearest statement yet that the era of trusting markets to build strategic supply chains is over. The combination of local content mandates, investment screening, and procurement preferences constitutes a structural shift — not a tweak. It will face serious legal challenges at the WTO and intense industry lobbying as it moves through Parliament and Council. But the political direction is clear: Brussels is betting on industrial policy as a competitive tool, and it is willing to accept a trade fight with Beijing to do it.
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