The European Commission will propose a new law that requires a certain percentage of products supported by public money to be “made in Europe. ” This initiative aims to help European industries compete against manufacturers from countries like China, which have fewer regulations and lower energy costs. By prioritizing locally produced goods in public contracts, the EU seeks to support its domestic industries using the significant financial power of public procurement, totaling over 2 trillion euros.
The law, named the “Industrial Accelerator Act,” is set to be published on February 26 and will establish content and low-carbon standards for products acquired through public procurement and manufacturing subsidies. It will focus on key strategic sectors such as batteries, renewable energy, hydrogen, and nuclear power. Each sector will have specific requirements for Europe-made components. For instance, solar panels must include specific components made in Europe within a year, with increased requirements over time. Electric vehicles acquired through public contracts must be assembled in the EU, ensuring 70% of their components, excluding the battery, are made in Europe. Furthermore, aluminium and concrete products benefitting from subsidies will have minimum Europe-made content limits.
The proposal will also impose conditions on foreign investments over 100 million euros in strategic sectors, especially from countries dominating the global manufacturing capacity. Conditions include limiting foreign investors’ majority stakes in EU companies and requiring them to license their intellectual property.
The definition of “made in Europe” has sparked debate, as it currently aligns with the European Economic Area but may expand to include trusted international partners in the future. There are exceptions to the rules based on global supply issues and cost variations. While France and much of the European industry support the plan, some countries, including Sweden and the Czech Republic, have expressed concerns regarding its potential impact on investment and pricing in Europe.
With information from Reuters
