On 4 March 2026, the European Commission (the “Commission”) published its proposal for a regulation establishing a framework for the acceleration of its industrial capacity and decarbonisation in strategic sectors (“Proposed Industrial Accelerator Act”, or “Proposed IAA”), accompanied by four annexes. The initiative is intended to strengthen the EU’s industrial base while accelerating decarbonisation in key manufacturing sectors considered strategically important (i.e., energy-intensive industries, net-zero technology manufacturing, and the automotive manufacturing ecosystem). These sectors currently represent less than 15% of EU GDP, and the Commission’s objective is to increase this share to 20% by 2035. The Proposed IAA was delayed three times before publication and underwent significant rewriting, which reflects both internal debates within the Commission and diverging reactions from Member States.  It also reflects the challenges posed by the broader geopolitical context, as the Commission aims to address economic security concerns through industrial policies whilst navigating international trade relationships and commitments.

The Proposed IAA introduces a regulatory framework combining three policy tools. First, it establishes demand-side measures designed to create “lead markets” for low-carbon and “Made in EU” industrial products through public procurement and certain public support schemes. Second, it introduces conditions for allowing certain foreign direct and indirect investments (“FDI”) in strategic sectors, aimed at maximising the industrial benefits of such investments within the EU. Third, it includes measures to streamline permitting procedures and facilitate industrial clustering, with the objective of accelerating the deployment of manufacturing projects.

This blog summarises the key aspects of each tool and their potential implications for companies active in the covered industries or looking to invest in the covered industries.