In early March the European Commission published a proposed regulation with measures to strengthen European manufacturing industry, which is struggling with high energy prices and international competition from the United States and China. With the Industrial Accelerator Act (IAA) as the cornerstone of a broader "Clean Industrial Deal", the European Commission aims to increase demand for low-carbon "made in EU" technologies, stimulate European production, reduce existing dependencies on third countries, and create employment within the European Union. At the same time, as the industrial variant of the Green Deal, the IAA supports industry's adoption of cleaner, future-proof technologies with a view to climate neutrality by 2050.
For now, the IAA focuses on specific strategic sectors, particularly energy-intensive industries, “net-zero technologies” (including solar panels and batteries), and the automotive sector, although the proposal offers the possibility of expanding to other sectors in future.
With the IAA the European Commission has a clear goal in mind: to increase the share of European manufacturing industry to at least 20% of EU GDP by 2035.
The European Commission's proposal contains four essential pillars.
Faster, digital permits for industrial projects
The IAA requires Member States to establish a central digital, single-access point for all permit applications for industrial manufacturing projects. Through it, applications will automatically be assigned to the competent authority, and developers will be able to track the progress of their file in real time. The portal will also mandatorily use European Business Wallets, one of the recent proposals to strengthen the Digital Single Market. Clients can click through to our Client Zone and watch a recent webinar by the Eubelius Data Team for a comprehensive explanation of the European Business Wallet and an overview of the broader European Digital Single-Market strategy.
In addition, the IAA requires a single, integrated permit-granting procedure: one application, one coordinating authority, one comprehensive decision. Member States have one year from the regulation’s effective date to implement these changes.
In Flanders and Wallonia, integrated digital permit procedures have already been (largely) established. However, the Brussels-Capital Region is still lagging behind: the existing "permis unique" does allow for a combination of urban planning and heritage permits but does not yet integrate the environmental permit. As a result, the region will need to make adjustments, at least for projects falling within the scope of the IAA.
For decarbonisation projects in energy-intensive industries, the full permit-granting chapter of the Net Zero Industry Act (NZIA) needs to be applied, including strict maximum time limits and an integral environmental assessment. Moreover, these projects automatically qualify as strategic projects, giving them access to the toolbox provided for in the proposal for a regulation on speeding up environmental impact assessments, which the European Commission tabled at the end of 2025.
Industrial Acceleration Areas
The IAA further requires each Member State to designate at least one “industrial acceleration area” within 12 months of the regulation coming into force. This is a strategic cluster for industrial manufacturing in sectors such as specific energy-intensive industries (including the paper, chemical and metal industries), the automotive sector, and net-zero technologies – preferably coinciding with brownfields or existing industrial sites to be upgraded. The designation comes with several best-efforts obligations for public authorities, such as facilitating financing, a triennial energy-needs analysis with feed-through into network development plans, coordination on critical raw materials, and support for training and workforce development.
For each acceleration area, an aggregated baseline permit must be issued, bundling all the permits and authorisations (except for installation-specific permits) required for industrial manufacturing activities in the area. All projects in an acceleration area are furthermore considered to be strategic projects within the meaning of the proposal for a regulation on speeding up environmental impact assessments.
How this area designation and the associated aggregated baseline permit – which appears to be conceived as an overarching permit for all activities within the area – will be integrated into the existing Flemish, Walloon and Brussels planning/permit landscape remains unclear at this stage and will undoubtedly give the relevant legislative bodies something to think about. Nevertheless, this instrument also offers opportunities: it can serve as a lever to give new impetus to vacant or underdeveloped industrial sites with potential, and to counter industrial stagnation in Belgium, in cases where the current environmental regulatory framework often hampers such developments.
Origin and sustainability requirements in public procurement
Public procurement represents approximately 15% of EU GDP (according to recital 15 to the IAA). The IAA targets public demand for works, supplies and services to limit strategic dependencies.
For relevant contracts above EU thresholds, the IAA requires contracting authorities to apply specific origin and sustainability requirements in the fields of net-zero technologies, aluminium, cement and steel, as well as for contracts concerning clean vehicles. For aluminium, for example, at least 25% of the aluminium used must be low-carbon and of EU origin. There are nevertheless three grounds for contracting authorities to derogate from these mandatory requirements: in monopoly situations; in the absence of suitable offers; and or where objective, transparent data shows that the additional costs exceed 25%.
The IAA does not, however, completely abandon the free-trade policy of recent decades. Products from countries with which the EU has concluded a free-trade or customs-union agreement are in principle also considered to be of EU origin. Operators can therefore continue to offer these products, although the European Commission may provide for exceptions to this in the future.
Finally, the IAA requires contracting authorities to exclude participants that are owned by, or under the control of, an entity established in a country that doesn’t have a trade agreement with the EU (such as the Government Procurement Agreement) that guarantees reciprocal access to public procurement. This represents a significant shift from the current situation, in which, failing any EU law obligation, contracting authorities have themselves decided whether to admit third-country undertakings to the procurement procedure. The scope of the IAA goes even further: in line with the approach taken in the IPI Regulation and in order to prevent circumvention through shell companies and other constructions, that obligation also applies to participants established in an EU Member State or a country with which the EU has a trade agreement, but that are owned by, or under the control of, a third-country entity.
With such proposals, the European Commission is continuing down the preferred path of sector-specific legislation for public procurement (as with the NZIA), placing significant responsibility on contracting authorities to apply the rules. It is to be hoped that, as implementation progresses, sufficient thought will be given to their practical workability.
Foreign investments
The IAA provides that, where an investor from a country that controls more than 40% of global production capacity in the relevant sector invests in emerging strategic sectors (batteries, electric vehicles, solar panels and critical raw materials) in a value of more than EUR 100 million, the investment must be approved by the national authority designated by the Member State (or the European Commission in certain cases). The European Commission may further expand this list of strategic sectors, but not with regard to digital technologies, artificial intelligence, quantum technologies or semiconductors.
These are investments over which the foreign investor is deemed to exercise “control”, which is where the investment confers 30% or more of the shares or voting rights in the company. For the acquisition of assets, the threshold is set at 30% of ownership in the assets. The notion of "control" is therefore different from that used in European and national merger control.
The investment will only be green-lit when the foreign investor meets certain conditions (four of the six that are listed in the proposal), which are primarily aimed at generating benefits for the European economy and protecting European control over strategic industries. For example: there is a cap of 49% on foreign participation; foreign investors must establish joint ventures with European partners; they must conclude licence agreements over intellectual property rights and know-how; they have to make investments in European R&D; and half the workforce must consist of European workers.
Stay tuned for a Legal Eubdate providing you with more detail on the scope and reach of these new obligations for foreign investors.
What's next?
The IAA will have a direct impact on both the supply and demand sides of European industry: faster permits for companies, but also significant transposition obligations for Member States and oversight obligations for contracting authorities. This proposal will in any case still be subject to negotiation between the European Parliament and the Council of the EU, and time will tell how much of the initial text survives that process. Nothing is set down in tablets of stone, and the provisions will undoubtedly undergo many further developments.
