The European Commission is preparing draft legislation that would link parts of public support and public procurement to local-content thresholds for a range of strategic technologies, including electric vehicles, renewable energy equipment and other clean-tech supply chains. The proposal, billed as the Industrial Accelerator Act, is due to be published on 26 February 2026.
At the centre of the plan is an attempt to use the scale of public spending to steer industrial investment back towards the EU and its closest partners. The Commission estimates that public authorities in the EU spend around €2.5 trillion a year, roughly 16 per cent of GDP, on works, goods and services. Commission officials and several member states have argued that this purchasing power can be used more deliberately to support domestic manufacturing at a time when European industry is under pressure from higher energy costs, tighter regulation and subsidised overseas competitors.
Local-content thresholds for vehicles and clean tech
Under the draft, “made in Europe” conditions would apply where public money is involved, either through procurement contracts or subsidy schemes. For electric vehicles acquired through public contracts, Reuters reported that vehicles would need to be assembled in the EU and contain 70 per cent European-made components, excluding the battery. The Financial Times separately reported that the Commission is also considering tying state support for EV manufacturing to a 70 per cent local-content rule for components, again excluding batteries.
Clean-energy technologies are also in scope. The draft targets sectors such as batteries and renewable energy technologies including solar, wind and hydrogen, and also includes nuclear energy in the definition of strategic technologies. The approach is designed to evolve over time, with component requirements expected to tighten as domestic supply chains expand, rather than imposing a single, fixed standard across all sectors from day one.
The draft also extends beyond clean tech into industrial materials and construction-linked supply chains. The Financial Times reported that proposed rules would require certain construction products to meet minimum EU-made thresholds to qualify for public subsidies, including 25 per cent EU-made aluminium and 30 per cent EU-made plastics for windows and doors. Reuters reported that aluminium and concrete producers receiving subsidies would face minimum domestic-content and low-carbon requirements.
Low-carbon criteria and links to earlier EU industrial policy
Alongside local content, the Commission is framing the initiative around emissions and resilience. Ursula von der Leyen has said the EU will introduce procurement requirements prioritising low-carbon, EU-manufactured goods, presenting the move as a way to support European producers while reducing exposure to subsidised imports.
Industrial Accelerator Act to tighten procurement around EU-made, low-carbon products
The policy direction overlaps with earlier EU efforts to build clean-tech manufacturing capacity, including the Net-Zero Industry Act, which aims to raise EU manufacturing capacity for strategic net-zero technologies and includes demand-side tools such as sustainability and resilience criteria in procurement and auctions. The Industrial Accelerator Act, as described in reporting, would go further by introducing explicit domestic-content thresholds in addition to environmental criteria.
“Europe” and the question of trusted partners
A central technical question is what counts as “Europe” for the purposes of local-content rules. Reuters reported that the draft defines Europe as the EU plus EEA countries, and notes that the scope could be broadened to include “trusted partners”. In practice, that could become a key political lever, allowing the EU to extend preferential treatment to specific partners without fully opening the scheme to global suppliers.
The draft also envisages exemptions. Reuters reported that exceptions would apply where European products are not available, or where they are significantly more expensive. Those carve-outs could be decisive for deployment timelines, particularly for technologies where EU supply chains remain limited or concentrated in a small number of firms.
Supply chains, investment screening and trade risk
Local-content thresholds would have direct knock-on effects across supply chains. For automotive and renewable energy industries, the rules would create incentives to shift sourcing and assembly steps into the EU, including for components that are currently imported in large volumes. The difficulty is most acute for batteries and upstream materials, where Europe remains dependent on external suppliers and processing capacity.
The draft also touches foreign investment. Reuters reported that investments over €100 million in strategic sectors could face conditions where the investor comes from a country dominating global production capacity, including limits on majority ownership and requirements relating to intellectual property licensing. If retained, these provisions would place the Industrial Accelerator Act alongside the EU’s wider toolkit for economic security and de-risking.
Trade implications are likely to be scrutinised. Any policy that favours domestic production in procurement can attract challenges under international trade rules and can prompt retaliation, particularly if major suppliers interpret the measures as protectionist rather than climate-linked. The Commission appears to be designing flexibility into the regime through exemptions and the possibility of including “trusted partners”, but the direction of travel signals a shift towards more conditional access to publicly funded European markets.
The next test will come as the proposal moves from draft to formal publication on 26 February and then into negotiations among member states and the European Parliament. Some governments back the approach while others have raised concerns about costs and trade tensions. For manufacturers and suppliers, the key question is whether “made in Europe” becomes a narrow procurement tool for selected contracts, or the start of a broader redesign of the EU’s industrial model around domestic capacity, carbon performance and controlled supply-chain dependence.
