The European Commission unveiled “Made in EU” proposals on Wednesday designed to set minimum requirements for public procurement to encourage European manufacturing in key sectors.
The recommendations form part of the Industrial Accelerator Act (IAA), which would also include rules for low-carbon procurement. The IAA must still be negotiated by member states and the European Parliament before it can become law, and EU governments and lawmakers have adopted differing positions on the proposals.
How would ‘Made in EU’ work?
– The IAA covers sectors including steel, cement, aluminum, cars and emerging technologies such as batteries, solar, wind and nuclear.
– New rules would require minimum shares of EU-produced inputs for projects that use public funds.
– For example, aluminum projects would need 25% of their aluminum produced in the EU using low-carbon technologies; for cement the threshold would be 5%.
– “Made in EU” sourcing can also include suppliers from non-EU countries that have a free-trade agreement with the bloc or are signatories to the WTO Government Procurement Agreement.
– Investors would have to ensure at least 50% of staff are EU workers and foreign ownership would be limited to 49%.
– The plan would cap foreign direct investment in strategic sectors to €100 million where a third country controls over 40% of global manufacturing capacity.
The third country referred to in that last point would almost always be China.
Why does Europe want to boost EU-sourced procurement?
The IAA aims to grow European manufacturing from about 14% to 20% of GDP by 2035 and to protect jobs: EU figures cite some 200,000 industrial jobs lost in the past 15 months. The commission says the act could help avoid possible losses of around 600,000 jobs in the automotive sector and create roughly 150,000 new jobs in other industries.
A major goal is to advance environmental targets by steering public money toward low-carbon technologies while reducing dependence on cheaper imports. China supplied 98% of the solar panels imported into the EU in 2023 and 29% of wind turbines, according to the commission.
What the commission said
European Commission Vice President Stephane Sejourne said the proposals aim “to boost demand and guarantee resilient supply chains in strategic sectors” amid “unprecedented global uncertainty and unfair competition.”
“It will create jobs by directing taxpayers’ money to European production, decreasing our dependencies and enhancing our economic security and sovereignty,” he added. “If we do nothing, then it’s quite clear that very soon, 100% of clean tech technology will be produced in China… It’s quite possible that our cement, steel industries will be offshored completely in the next few years.”
Edited by: Dmytro Hubenko
