For years, the EU’s industrial policy has been long on ambition and short on teeth. Now, with Chinese overcapacity flooding its markets and a hostile transatlantic climate, Brussels is being forced to act—and with the Industrial Accelerator Act, it finally has a tool that bites. We spoke to Tristan Beucler, Industry Analyst at Strategic Perspectives, about what it will take to make it work.
After 44 last-minute changes and weeks of wrangling over ‘Made in EU’ requirements, the European Commission adopted the Industrial Accelerator Act (IAA) last week, following a cabinet chiefs’ meeting that ran into the night. As it heads into the legislative process, debates over European majority shareholding, public procurement preferences, and manufacturing depth requirements are turning abstract competitiveness goals into binding policy choices—and the risk of getting the calibration wrong could undermine the very demand boost the act is designed to create.
In an interview with EU Perspectives, Tristan Beucler, Industry Analyst at Strategic Perspectives, explains why the IAA marks a genuine shift in how the EU directs taxpayer money—and what it will take to make the demand boost stick.
Do you believe the Industrial Accelerator Act represents a significant breakthrough? Will it have a substantial impact? Is this more of a competitiveness boost, a green transformation, or both?
The Industrial Accelerator Act is an important milestone in the EU’s common industrial policy. First, it is the first major act to emerge from the Clean Industrial Deal.
It sets the direction that the Commission wants to take in this mandate for industrial policy. Second, it signals the EU’s willingness to align with its main trading partners by using taxpayer money strategically to support its most strategic industries. This hasn’t been present much in EU industrial policy so far.
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This happens by applying low-carbon and made-in-Europe criteria to both public procurement and other public support mechanisms and auctions for renewables. That can create a strong demand boost, which is really what’s at the centre of this act—how to boost demand for EU-made low-carbon products.
“The act has strong potential not only to bring some sectors back, but also to keep some in Europe that are at risk of leaving.” — Tristan Beucler
There are some uncertainties which could stand in the way of this being as big a milestone as it could be. But that will come, mostly with the debates now in the Parliament and Council.
It is both a competitiveness boost and a text that is about green transformation. Even though decarbonisation came out of its name—it used to be the IDAA—this proposal shows that it’s clearly at the very centre of the text. It’s about low-emissions materials for energy-intensive sectors and it’s about making Europe a leader on net-zero technologies, those technologies that are essential to electrify and to decarbonise.
At Strategic Perspectives, we believe that competitiveness and decarbonisation are two sides of the same coin.
On the debates now unfolding in Parliament and Council— here’s the ‘made in Europe’ versus ‘made with Europe’ distinction. Do you think this distinction is really important? What do you think the end result should be?
The ‘made in Europe’ versus ‘made with Europe’ debate has taken a really important place in the public debate. But it was never really such a black and white debate within the Commission. Judging from the draft leaks we’ve seen in the last couple of months, this was always going to be about ‘made with Europe.’
Even if the definition didn’t necessarily include as many countries as it could now, it was always just about a percentage of public procurement and public support being applied to EU content—so in any case, companies were still going to rely on very international value chains. It was never about closing the market; it was always still going to be possible to import cheaper goods if a company wanted to.
It was just about where the taxpayer money was going to be directed. I always saw it as more of a ‘made with Europe’ discussion. The question is really the degree of ‘made with Europe,’ or in other words, which countries are going to be included—and which sectors.
The Commission clearly heard the conditions that have been set by the countries around Czechia and the non-paper requiring the inclusion of trading partners, which also means that this text should be rather well received by these countries. Including a lot of countries, or going from a position where all countries are included and then the Commission can through secondary legislation take them out—all countries that have an FTA or that signed the General Procurement Agreement—gives the EU some geopolitical leverage.
This gives the EU leverage to get other countries to level the playing field and to include EU companies in their own procurement and public support schemes. And that’s rather positive. It is important, though, that this does not stand in the way of investment predictability.
The heart of the IAA is creating a demand boost. If companies don’t know whether those countries will be included in the definition, this delays the moment when they can make the investment decisions that need to happen now, in the next few years if not this year. If the Commission can give a clear signal of which countries will or will not be included, this can offset that uncertainty.
Will this bring industry back to Europe? How do you think “European majority shareholding” will be enforced in practice, given the prevalence of complex cross-border ownership structures? Will we end up with domestic manufacturing depth, or just final-stage assembly?
The act has strong potential not only to bring some sectors back, but also to keep some in Europe that are at risk of leaving. Sometimes we underestimate the depth of the value chain that is still present in Europe in certain sectors—the automotive sector, for example—and that is at risk of leaving.
Before bringing industry back, it is important to ensure that the current manufacturers in Europe don’t leave. When we speak about the industrial crisis, there are always a few elements that come out—including in the Draghi report—among them unfair international competition with Chinese overcapacity at the centre, and low demand within the EU for EU-made products, materials, and technologies. The IAA addresses both.
On European majority shareholding, what’s in the proposal—the maximum 49% ownership from companies from third countries—can have a positive impact on EU value chains. There are also other conditions that are important, such as the 50% employment of EU workers or the 1% investment in research and development.
“We found that close to 450,000 jobs could be created in the automotive and battery sectors by 2035 with the right lead market, low-carbon, and EU preference policy.” — Tristan Beucler
Domestic manufacturing depth versus final-stage assembly was one of the central points the Commission was trying to address. Some definitions are still to be made through secondary legislation, so it’s hard to give a final answer.
The act clearly aims to restore real manufacturing depth and not just final-stage assembly. For net-zero technologies there are very precise criteria for essential components. For instance, for batteries these are the battery cells, the cathode active material, and the battery management system that have to originate in the EU. For solar PV it is solar inverters. For every technology there are certain strategic elements, and that can very much counteract the risk of just having assembly—because assembly counts for little if those elements aren’t also made in the EU.
For the automotive sector more generally, there are pretty strong measures: only one of them is assembly, and a few of them require around 70% of the value of the car to be made in the EU. As the proposal stands, it would bring back significant domestic manufacturing depth—not just final-stage assembly.
Some say this is stated to primarily counter Chinese subsidies, but the primary instrument here is procurement preference rather than the Foreign Subsidies Regulation or anti-dumping measures? Is the IAA solving the right problem or something different?
Chinese overcapacity—partly the result of very high subsidies for domestic industry—is one of the industrial risks this act is trying to address. But it’s also trying to address low domestic demand, and both go hand in hand.
This is not an anti-subsidy act—nor was it ever going to be. The EU has its Foreign Subsidies Regulation and has the capacity to regulate further in these areas. Looking holistically, a number of industrial texts will come out in the next months and years, each addressing its own sector.
Because this act directs taxpayer money at least partially towards EU-made products, it avoids funding already-subsidised Chinese overcapacity—and comes as an answer to the risks caused by these subsidies. If you only have a low-carbon criterion, for instance on aluminium, but no EU content, then there is a risk that public procurers will just import cheaper aluminium from other places.
It’s not the whole answer, but it’s definitely part of it, and could be quite effective.
On the projections—the Commission puts forward some pretty substantial numbers. The one that stood out most to me was that 150,000 jobs would be created and/or preserved. How do you assess these projections? And how do you see the long-term effects?
Strategic Perspectives published a report in April 2025 about lead markets, and we also ran our own modelling with a French company called Carbon4. Among our results, we found that close to 450,000 jobs could be created in the automotive and battery sectors by 2035 with the right lead market, low-carbon, and EU preference policy.
As with any projection, it can be questioned—but it shows the scale of industrial job potential. The automotive sector employs a very high number of people in the EU currently, given the major risks of manufacturing leaving and the economic opportunity of switching to electric and keeping those battery jobs.
The gigafactories in the north of France are creating thousands of jobs and keeping them in the EU. So 150,000 doesn’t sound like a crazy number to me—it’s even on the lower side compared to some of the modelling numbers I’ve seen in other reports.
What are the biggest implementation risks between now and the Act entering into force? And, where do you see the political dynamics playing out—both in national capitals and within the Parliament—as this debate continues?
The discussion is now public—and it was time. In the past month we’ve seen strong support both from a majority of member states and from different political parties within the European Parliament.
One example is the Berlin Declaration, which was signed in November 2025 by 18 member states, including France, Germany, Italy, and Spain—expressing clear support for low-carbon lead markets and for European preference or EU content in strategic sectors.
Other non-papers point in the same direction. Of course, some countries will sometimes take various positions, and within a country there can be a lot of debate. I’m thinking of Germany especially, where between ministries you don’t always get the same position. And there was the Czech non-paper which was asking for conditions which, again, has been heard and the conditions are there.
On the member states side, there is rather strong support. There are going to be discussions and wishes from certain member states to add or take out sectors, but there’s a strong base now and the discussion can start happening.
In Parliament, the three central parties—S&D, EPP, and Renew—have all called for low-carbon lead markets and EU preference in their priorities for the year or in their position papers on the Clean Industrial Deal. If those positions are still shared by their members, support should be rather strong. There are going to be discussions on details, of course, but the Parliament could really get behind the act rather quickly. I think everyone wants this to happen fast.
There is also strong support within industry—seen in EVP Séjourné’s op-ed signed by over 1,100 companies from all over Europe and in open letters and calls from the clean tech sector, the steel sector, the chemical sector, and from trade unions as well, to create good jobs in the EU.
In civil society there is also rather broad-ranging support, and all of those are the right ingredients for a quick implementation and for the debates to go in the right direction quickly.
The biggest implementation risk is the uncertainty—some of which is already in the text, and there’s a risk of creating more of it—because again, this is at its heart about creating a demand boost for the strategic sectors, and any uncertainty can go against the investments that need to happen and against starting manufacturing here.
The price exceptions in the proposal are rather low: 30% for public procurement and 25% for other public support mechanisms, when we know that for certain technologies the average price difference with China is around 40%. For heat pumps it’s between 40 and 60%. For batteries it’s in the 40 to 50% range. This can simply undermine the policy’s effectiveness.
There’s also the question of the inclusion of countries that can be a threat to certain strategic sectors, but again that will come from the Commission’s secondary legislation. The scope is also more limited than expected: the public support mechanisms only apply to 45% of the annual budget in every member state dedicated to these support mechanisms, except for the automotive sector—but for the other strategic sectors, this used to be 90% in former leaks. If the debates can bring this number up a bit, this can also create more certainty and a stronger demand boost.
