The European Commission on Wednesday published ‘Made in EU’ proposals aimed at requiring minimum levels of EU-sourced inputs in publicly funded projects to strengthen domestic manufacturing in strategic sectors. The measures are part of the wider Industrial Accelerator Act (IAA), which also includes provisions for low-carbon procurement. The IAA still needs agreement from EU member states and the European Parliament, and positions among governments and lawmakers remain divided.
How the ‘Made in EU’ approach would work:
– Scope: The IAA targets sectors such as steel, cement, aluminium, cars and emerging clean-tech areas including batteries, solar, wind and nuclear.
– Minimum EU input shares: Publicly funded projects would have to meet set thresholds for the share of materials or components produced in the EU using low-carbon methods. For example, aluminium projects would require 25% EU-produced, low-carbon aluminium, while cement projects would face a 5% threshold.
– Eligible non-EU suppliers: ‘Made in EU’ sourcing could include firms from non-EU countries that have a free-trade agreement with the bloc or are parties to the WTO Government Procurement Agreement.
– Labour and ownership rules: Investors would need to ensure at least 50% of staff are EU workers, and foreign ownership in covered projects would be limited to 49%.
– FDI cap in strategic cases: The plan would cap foreign direct investment at €100 million in situations where a third country controls more than 40% of global manufacturing capacity in a strategic sector. In practice, the ‘third country’ referenced is almost always China.
Why the EU is pushing for more EU-sourced procurement:
The Commission says the IAA is intended to grow European manufacturing from roughly 14% to 20% of GDP by 2035 and to protect jobs after recent industrial losses. EU data point to about 200,000 industrial jobs lost in the past 15 months; the Commission argues the act could prevent as many as 600,000 potential job losses in the automotive sector and could create around 150,000 new jobs in other industries. A further aim is to advance environmental goals by steering public spending toward low-carbon technologies while reducing reliance on cheaper imports: in 2023 China supplied 98% of the solar panels imported into the EU and 29% of imported wind turbines, according to the Commission.
Commission comment:
European Commission Vice-President Stephane Sejourne said the proposals are designed ‘to boost demand and guarantee resilient supply chains in strategic sectors’ amid ‘unprecedented global uncertainty and unfair competition.’ He added that directing public money to European production will create jobs, reduce dependencies and strengthen economic security and sovereignty, warning that continued inaction risks widespread offshoring of clean-tech and heavy industries.
Next steps:
The IAA must be negotiated and approved by EU member states and the European Parliament before becoming law, and its detailed thresholds and implementation rules could change during those talks.
Edited by: Dmytro Hubenko