EU action to boost industrial production and strengthen clean technologies
On 4 March, the European Commission published the Industrial Accelerator Act (IAA) proposal. The initiative aims to increase European production, grow businesses and create new jobs. While reflecting the recent debate surrounding the ‘Made in EU’ concept, the initiative also recognises the importance of the EU’s partner countries. Public procurement and public support scheme plays a significant role in this initiative, in particularly, a few technology sectors are mentioned.
At the beginning of March, the European Commission published a legislative initiative called the Industrial Accelerator Act. Focusing on accelerating European production, growing businesses and creating jobs, the porposal centres on public procurement and incentives. The publication of the initiative was slightly delayed from the original schedule. There has been lively debate, particularly around the concept of ‘Made in EU’.
There have been references to protecting European industry and europeanising critical value chains in the debate surrounding this initiative. However, the initiative does not go in a completely protectionist direction. The Commission recognizes the importance of increasing European production as global production chains become increasingly unpredictable. At the same time, however, the initiative emphasizes special treatment for countries with which the EU has a free trade or customs agreement. Reliable production chains with natural partner countries are of paramount importance to the EU.
Through public procurement and incentives, the Commission aims to increase the production of low-carbon European products. The requirements focus on critical sectors such as cars, cement, steel, batteries, and net-zero technologies. The aim is to simplify licensing and impose requirements on large foreign investments to generate European added value, particularly in sectors classified as critical. Foreign direct investments must create European jobs and promote innovation.
In selected strategic sectors European preference policy will be introduced in public procurement. Such products include steel, cement, and battery products. For example, in the case of batteries, manufacturing systems and certain components must be sourced either from Europe or from trusted partner countries.
The initiative takes into account several key challenges and priorities for the EU, which can be found, for example, in Mario Draghi’s frequently cited report on EU competitiveness. The EU will develop its own production of clean technologies, promote the internal market based on the EU’s strengths, and seek to reduce sensitive dependencies.
The proposal will now follow the ‘ordinary legislative procedure’ and will be sent to the European Parliament and to The Council of the European Union, after which the legislators will agree on the final text in trilogues.
The Commission’s press release and the initiative in its entirety can be found here.
