From 'Made in China' to 'Made in EU': Industrial Accelerator Act

European competitiveness is high on the EU agenda. European industry is under significant pressure, particularly from China, which through its "Made in China 2025" strategy from 2015 has invested massively in ten high-technology sectors, including electric vehicles, information technology and advanced robotics. As EU industry chief Séjourné has put it, Europe must act now: "If we do nothing, 100% will be made in China".

The European countermove has long been in the making, but on 4 March 2026 the Commission presented its proposal for the "Industrial Accelerator Act" ("IAA"), which forms part of the EU's flagship initiative "Clean Industrial Deal". The proposal has a dual objective: an ambitious climate policy with accelerated decarbonisation combined with strengthened competitiveness for European industry.

The proposal is marked as EEA relevant, and any resulting regulation will most likely be incorporated into the EEA Agreement and thus into Norwegian law. The IAA accordingly entails both opportunities and constraints for Norwegian businesses, including restrictions on the ability to use suppliers from third countries such as China. For suppliers and investors from countries without a free trade agreement with the EU – particularly China – the proposal could entail significant restrictions. The key elements of the proposal are outlined below.

Objectives and measures

The EU has set an ambitious industrialisation objective: the Union's manufacturing industry shall account for at least 20 percent of gross domestic product ("GDP") by 2035. The background is a persistent downward trend. The manufacturing industry's share of GDP has fallen from 17.4 percent in 2000 to the current 14.3 percent, while the sector accounts for 26.2 percent of the EU's greenhouse gas emissions. The Commission emphasises that increasing geopolitical tensions and trading partners' use of economic dependencies as strategic instruments pose a serious threat to the EU's resilience and strategic autonomy. To reverse this trend, the IAA aims to address fundamental challenges related to European industrial competitiveness:

• Supply chain vulnerabilities in strategically important sectors and technologies, including energy-intensive industries, net-zero technologies and the automotive industry;
  • Insufficient market demand for European low-carbon products in specified energy-intensive sectors, as classified under NACE (the EU's standard for industrial classification), including steel, cement and concrete, and aluminium; and
  • Barriers impeding the timely realisation of large-scale industrial projects.

To address these challenges, the following measures are proposed:

• Union origin and low-carbon requirements in public procurement, auctions and other public support schemes;
  • Screening of foreign direct investments (FDI) in emerging strategic sectors, including battery technologies, electric vehicles, solar PV technologies and critical raw materials; and
  • Streamlined and more efficient procedures for granting permits for projects in industrial manufacturing acceleration areas designated by each Member State.

The IAA targets sectors of strategic importance that are subject to significant competitive pressure: energy-intensive industries (including steel, cement, aluminium and chemicals), the automotive industry and net-zero technologies (such as batteries, solar PV, heat pumps and wind power). For the chemical industry, the Commission has been granted delegated powers to introduce demand-side measures at a later stage, but such requirements are not included in the current proposal. These are sectors that are critical for value creation across broad downstream industries, and which are experiencing declining European production volumes as a result of increasing international competition.

Union origin requirements ("Made in EU") and low-carbon requirements

A central element of the proposal is the introduction of Union origin requirements (referred to as "Made in EU") and low-carbon requirements applicable to public procurement, auctions (particularly for renewable energy) and other public support schemes in selected strategic sectors.

The requirements are directed at two groups of actors: contracting authorities and support scheme administrators on the one hand, and suppliers and beneficiaries on the other.

For public procurement, the Union origin requirements entail that specified components or final products must originate in the EU or in an equivalent partner country, while the low-carbon requirements stipulate that the products must meet prescribed greenhouse gas intensity thresholds.

In practice, this means the following for the two groups:

• Contracting authorities must include Union origin and low-carbon requirements as mandatory technical specifications in their procurement documents.
  • Suppliers must demonstrate compliance with the requirements in public procurement procedures.

The requirements apply to the following sectors and products:

• Steel (low-carbon requirements only), cement, concrete and aluminium in the construction and transport sectors (both Union origin and low-carbon requirements)
  • Vehicles (Union origin requirements only)
  • Net-zero technologies, including batteries, solar PV, heat pumps, wind power, nuclear fission technologies and electrolysers (Union origin requirements only)

For public support schemes and auctions, corresponding requirements apply, but with somewhat stricter rules regarding which third countries may be deemed equivalent to Union origin. Support scheme administrators shall design the schemes to promote the use of EU-produced products and low-carbon products, and beneficiaries that fulfil the requirements may be given preference or additional financial compensation.

The aim is to strengthen European production capacity and stimulate demand for European low-carbon products in these sectors. The requirements are, however, not absolute. In public procurement, contracting authorities may decide not to apply the requirements where:

• the products or services can only be supplied by one specific economic operator, no reasonable alternative or substitute exists, and the absence of competition is not the result of an artificial narrowing down of the parameters of the public procurement procedure (sole supplier situation),
  • no suitable tenders or suitable requests to participate have been submitted, including in response to a similar prior public procurement procedure launched by the same contracting authority in the two preceding years, or
  • the requirements would result in disproportionate costs (exceeding a 25 percent cost increase) or technical incompatibility in operation and maintenance.

For support schemes, a corresponding possibility to derogate applies where:

• significant delays arise due to the unavailability of the required components or final products (exceeding seven months), or
  • compliance would incur disproportionate costs (exceeding a 30 percent cost increase).

It is precisely these possibilities to derogate that may prove decisive for projects dependent on deliveries from China. Where EU-produced alternatives would not be available in sufficient quantities, would entail disproportionate additional costs, or would be technically incompatible with the project's other solutions, contracting authorities and support scheme administrators may derogate from the Union origin requirements. For projects involving, for example, solar PV technology, wind turbines and batteries – sectors where China currently dominates global value chains – the exceptions may provide necessary room for manoeuvre during a transitional period until European production capacity has been sufficiently scaled up.

The proposal has been the subject of considerable political debate. France in particular has been a driving force behind this European preference scheme, while countries such as Germany, Sweden, Finland and the Netherlands have been sceptical. Following opposition from these countries, the number of sectors covered by the scheme was reduced. The Commission had originally considered including semiconductors and artificial intelligence. An important compromise is that countries considered as partners may fulfil the requirements under "Made in EU". The countries that qualify differ depending on whether a procurement procedure or a support scheme is concerned:

• For public procurement, a principle of equivalence applies to countries with a free trade agreement, customs union or membership of the WTO Agreement on Government Procurement (GPA), which means that countries such as the United Kingdom, Japan, South Korea and Turkey may qualify.
  • For public support schemes, the scope is narrower: Here, a principle of equivalence applies only to countries with a free trade agreement or customs union with the EU.
  • For suppliers from partner countries, this means that their products may in principle be deemed equivalent to Union origin, but the extent of this equivalence depends on whether a procurement procedure or a support scheme is concerned.

For Norway, it is worth noting that the EEA/EFTA States are not explicitly mentioned in the proposal, unlike in earlier drafts. The regulation is nevertheless marked as EEA relevant, and it seems clear that the EFTA States, including Norway, will fall within its scope. Should an adopted regulation nonetheless not be incorporated into the EEA Agreement, the position of affected Norwegian industry would be more uncertain.

Foreign direct investments (FDI)

The proposal also entails mandatory FDI screening of investments in emerging strategic sectors. For such investments, explicit prior approval from the national investment authority or the Commission is required. It is worth noting that these FDI rules do not apply to investors from countries that have a free trade agreement with the EU. Investors from such countries are treated in the same manner as undertakings established in the EU.

In short, the notification obligation arises where all of the following conditions are met:

• The investment must be a direct investment (including greenfield investments) in an emerging strategic sector, specifically battery technologies, electric vehicles, solar PV technologies or critical raw materials;
  • The investment must exceed EUR 100 million;
  • The investor's home country must hold more than 40 percent of the global manufacturing capacity in the relevant sector; and
  • The investment must confer control on the investor, defined as at least 30 percent of the share capital, voting rights or ownership in a Union target or Union asset. Interests held directly or indirectly, including through affiliates, chains of ownership or investors acting in concert, shall be aggregated.

Approval of investments meeting these conditions requires, as a general rule, that at least four of the following six criteria are fulfilled:

1. At least 50 percent of the workforce employed in the context of the foreign direct investment shall be Union workers (mandatory criterion);
2. Foreign investors shall not acquire, hold, or exercise ownership interests exceeding 49 percent;
3. The investment shall be undertaken through a joint venture with one or more Union entities;
4. Agreements providing for the licensing of intellectual property rights and technology transfer shall be entered into;
5. At least one percent of gross annual revenue shall be directed to research and development in the Union; and / or
6. At least 30 percent of inputs shall be manufactured in the Union.

It is worth noting that the IAA's FDI framework applies to direct investments by foreign investors, and that no independent notification obligation is imposed on their subsidiaries. The IAA does, however, contain a discretionary power for Member States to apply the FDI regime to investments by subsidiaries of foreign investors, provided that specified conditions are met.

The national investment authority, in Norway likely the Norwegian National Security Authority ("NSM") or the relevant ministry, shall ensure compliance and may impose penalties for breaches of the notification obligation. Penalty payments shall amount to at least five percent of average daily aggregate turnover, or at least five percent of the investment value where the investor is not publicly listed.

The measures complement the EU's existing framework for FDI screening. In this context, it is worth noting that the IAA's framework for foreign direct investments runs parallel to ongoing legislative work in Norway, where a tightening of the Norwegian FDI regime is expected. The Norwegian legislator is also moving towards a more sector-specific regime, but with a focus on national security interests, including security of supply. A legislative proposal is expected to be sent for public consultation during the spring of 2026, and this will likely also capture elements from the IAA. We have previously written about the Norwegian legislative work.

Industrial manufacturing acceleration areas and streamlined permit-granting procedures

A central element of the proposal is the introduction of so-called industrial manufacturing acceleration areas.

These are geographically delimited areas that Member States shall designate to facilitate faster establishment and scaling up of industrial projects in strategic sectors. The purpose is to reduce regulatory barriers, streamline and expedite procedures for granting permits, and thereby strengthen the EU's industrial capacity in sectors that are critical for the green transition and European competitiveness. Each Member State shall designate at least one such area within 12 months of the entry into force of the IAA, based on criteria including environmental considerations, security of supply and regional development levels. For each designated area, an aggregated baseline permit shall be issued, so that individual projects in principle only require additional permits. The projects shall be granted the status of strategic projects, which enables streamlined and faster environmental assessments.

The acceleration areas will benefit from faster permit-granting procedures, improved coordination and access to infrastructure, financing and centres of expertise, with the aim of establishing competitive industrial clusters. For other industrial manufacturing projects, a single permit-granting procedure shall be introduced based on a single application covering all necessary permits. The competent authority shall, within 45 days, acknowledge that the application is complete, or request supplementary information.

The way forward

The IAA amends, inter alia, Regulation (EU) 2018/1724 (Single Digital Gateway), Regulation (EU) 2024/1735 (Net-Zero Industry Act, "NZIA") and Regulation (EU) 2024/3110 (Construction Products Regulation). The proposal builds on the NZIA, which has not yet been incorporated into the EEA Agreement.

Affected businesses should already now assess whether they operate in, or supply to, sectors covered by the proposal, including energy-intensive industries, the automotive industry and net-zero technologies. It will also be necessary to review the supply chain and assess foreign investments against the proposed thresholds and conditions.

The Norwegian Government, through the Ministry of Trade, Industry and Fisheries, sent the Commission's proposal for an abbreviated public consultation on 27 March 2026. The consultation deadline was 4 May 2026. The ministry received 31 consultation responses. On the basis of this input from industry and other stakeholders, the ministry will prepare Norwegian comments on the IAA proposal. The comments will be submitted to the relevant EU institutions to promote Norwegian perspectives in the ongoing legislative process.

Following adoption in the EU, the parties to the EEA Agreement (the EU side and the EFTA States) will need to agree that the regulation shall be incorporated into the EEA Agreement through a decision by the EEA Joint Committee. The EFTA States must thereafter obtain consent from their respective national parliaments (the Storting in Norway), following which the EEA Joint Committee may adopt a decision on the entry into force of the incorporated regulation. The provisions will only apply to Norwegian citizens and companies once the regulation has been implemented in Norwegian law.

The team at Wikborg Rein have participated in dialogue meetings with the Norwegian Ministry of Trade, Industry and Fisheries concerning the IAA, where our impression is that Norwegian industry was united in the view that it is essential for Norwegian businesses to fall within the scope of the IAA, so as to ensure that they can compete in the EU on equal terms with their EU-based competitors. The team is closely following the further proceedings in the Council and the European Parliament, as well as any subsequent incorporation into the EEA Agreement.