The European Commission recently published a draft of the EU’s new Industrial Accelerator Act (IAA). The IAA is a long-awaited piece of legislation designed to make European industry more competitive. Industrial competitiveness has been a concern for the EU economy. Anxieties surrounding competitiveness are largely what drove the sustainability omnibus reforms. The proposed IAA attempts to integrate a low-carbon strategy into the EU’s larger industrial plan. This includes minimum threshold requirements for member states to use low-carbon materials made in the EU. Linklaters explains the requirements in a recent memo:
“Member States must design their public support schemes, so that they contribute to strengthening the EU’s strategic industrial value chains through the Union origin or low-carbon requirements, ensuring again that beneficiaries comply with minimum Union origin and/or low-carbon steel, cement and mortar, and aluminium shares. This requirement applies to public support schemes accounting for at least 45% of the national budget allocated support schemes to energy intensive industries… and 100% for electric, hybrid electric and fuel cell vehicles.”
This attempt to boost low-carbon domestic industry is reminiscent of the US’s own Inflation Reduction Act (IRA). While the current US administration repealed much of the IRA, the EU will have an opportunity to see the full impacts of promoting domestic clean industry. For now, the IAA is a proposal. We’ll see how it evolves as it moves through the legislative process. The resulting law may provide ample opportunities for industrial companies operating in the EU, especially those leading in cutting-edge low-carbon manufacturing methods.
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