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The Industrial Decarbonisation Accelerator Act, IDAA is a key pillar of the EU’s Clean Industrial Deal: its main mission is to accelerate the decarbonisation of energy-intensive industries (e.g. steel, cement, chemicals, etc.) while boosting competitiveness and cutting emissions. Besides, IDAA moves beyond policy governance, and actively guide new industry’s implementation projects to ensure long-term sustainability and global competitiveness.
Background
European perspective competitiveness and resilience in great extent depends on the ability to rapidly scale up strategic manufacturing capacities, to accelerate industrial decarbonisation and reduce critical dependencies in key value chains.
The European industrial policy agenda aims to strengthen regional industrial base, support clean and digital industrial transformation and enhancing massive deployment of innovative technologies. The proposed Industrial Accelerator Act (it was expected for adoption in late 2025) is a central element of this approach, designed to simplify procedures, mobilise investment, and speed up the implementation of strategic industrial projects in the member states, while reinforcing EU-wide long-term competitiveness and sustainability.
To discuss these developments, the European Cluster Collaboration Platform, on behalf of the European Commission, will host the EU Clusters Talk: “The Industrial Accelerator Act: Speeding Up Strategic Projects” (in March 2026) to present the objectives and main provisions of the Act, to outline its implications for European industry and SMEs, and to explore key enablers in accelerating industrial projects, fostering innovation uptake and supporting companies in decarbonisation.
More in: https://www.clustercollaboration.eu/content/eu-clusters-talk-industrial-accelerator-act-speeding-strategic-projects
The EU new industrial legislation has a valid external dimension: thus, China’s controversial policy of forced joint ventures is making a comeback in the EU: i.e. it presently is affecting the basic elements of the EU’s plan for reviving continental industrial power. China has already managed to proceed from a poor economy in the 1970s to a superpower by requiring foreign automakers and other companies to enter into partnerships with Chinese companies, giving them critical know-how and creating many of the supply chains that power its economy today.
At the height of the car market in 2017, nearly half of Volkswagen’s global sales went to China. Once a taboo spurned by European policymakers, the idea of imitating China’s success in growing into an industrial and manufacturing leader is winning increasing acceptance as the EU governance’s circles, notes Politico.
Thus, under the IAA’s present draft, foreign investment over €100 million in “emerging key strategic sectors” would trigger mandatory screening from the EU and states’ authorities; besides, foreign investors would also be banned from owning more than 49 percent stake in any EU company operating in the industrial sectors.
Source: https://www.politico.eu/article/eu-industrial-policy-goes-full-china/
Industrial Decarbonisation Act
The Commission’s work program for 2025 announced a legislative proposal for an Industrial Decarbonisation Accelerator Act to be release at the end of the year. The IAA is both the integral part of the Clean Industrial Deal, and a 2026 legislative initiative to accelerate the decarbonisation of energy-intensive industries (e.g., steel, cement) while boosting EU competitiveness. Besides, it aims to reduce administrative burdens, shorten permitting procedures and stimulate demand for low-carbon products through the “Buy European” criteria and a new low-carbon label.
The key aspects of the proposed Industrial Accelerator Act include:
= Decarbonisation targets: the initiative supports the transition of energy-intensive sectors to greener technologies, with a focus on overcoming high investment costs.
= Permitting and infrastructure: it addresses bottlenecks by accelerating permitting procedures and enhancing access to critical infrastructure like hydrogen, electricity, transport and storage.
= “Buy European” agenda: the proposal includes, e.g. stricter criteria for public and private procurement, potentially requiring non-EU products to be 30% cheaper than the EU-made alternatives.
= Low-carbon labels: the proposal establishes a “low-carbon” labeling system, starting with steel and potentially expanding to cement, to provide transparency on carbon intensity.
= Implementation and timing: thus, as part of the Clean Industrial Deal, the draft was heavily discussed recently, with key updates focused on strengthening the EU’s industrial base against global competition.
Bottom-line: the act delivers: – fast-track permitting for green infrastructure projects; – support for strategic decarbonisation clusters and industrial hubs; – creation of lead markets for low-carbon products through: eco-labelling, green public procurement criteria and financial measures; – launch of a €100 billion Industrial Decarbonisation Bank; – expanded support from the EU Innovation Fund; – tailored state-aid frameworks to enable national-level support, etc.
The IDAA brings together permitting, investment, and industrial policy under one umbrella—ensuring that the EU can: – achieve climate neutrality; – maintain global industrial leadership; and – drive innovation in clean manufacturing.
Source and citations from:https://construction-products.eu/publications/industrial-decarbonisation-accelerator-act/#:~:text=The%20Industrial%20Decarbonisation%20Accelerator%20Act,boosting%20competitiveness%20and%20cutting%20emissions
Stalled investment
The EU’s IIA draft (appeared on January 2026), sets out plans to accelerate decarbonization across strategic sectors, including steel, as part of a broader push to strengthen EU industrial competitiveness. As part of the Commission’s Clean Industrial Deal, originally due for publication in December, but then pushed to the end of January 2026, and then probably to the end of February 25. The proposed regulation targets energy‑intensive industries, with steel singled out to be a priority due to declining production, rising imports, global overcapacity and a widening cost gap with competing regions since 2021.
More than half of the announced EU-wide decarbonization projects across energy‑intensive sectors, including steel, remain unimplemented because of high costs, weak demand signals and lengthy permitting procedures. According to Eurometal, the EU’s share of global industrial value added fell to 14.3% in 2020, down from 20.8% in 2000, while production in energy‑intensive industries has “substantially decreased since 2021.” Steel capacity utilization was described to be “unsustainably low,” and import penetration continues to rise, particularly in basic metals. “Without decisive action, the EU risks further de‑industrialization precisely at a time when global partners are accelerating their industrial strategies and weaponizing their industrial successes,” the draft says. The draft calls on EU institutions and the member states to ensure manufacturing accounts for at least 20% of EU gross value added by 2030.
The EU‑27 crude steel output reached 129.5 million tons in 2024, up 2.6% year on year but still well below pre‑2022 levels amid high energy costs, weak demand and ongoing economic headwinds, as the data from the European steel industry association EUROFER shows.
Note. The EUROFFER, as the European Steel Association’s members operate steel production facilities across the EU. Source: https://www.eurofer.eu/
In early December 2025, the EUROFER said in its fourth quarter market outlook that apparent steel consumption is projected to grow only modestly by 3% in 2026, leaving it well below the pre-pandemic levels; it also confirmed its earlier projection for 2025 of a 0.2% drop in apparent steel consumption to 128 million tons. While both steel production and consumption in the EU have declined, imports have continued to gain market share, crowding out domestic supply, some sources said.
Green steel
Currently, 60% of the steel produced in Europe originates from the integrated blast furnace/basic oxygen furnace route (BF-BOF). Standard carbon emissions from this production route amount to around 2.0-2.2 tons of CO2 (direct and indirect emissions), according to the Institute for Energy Economics and Financial Analysis (IEEFA) report on “Streamlined permitting for decarbonization projects”.
Demand for green steel has so far been niche and fragmented across Europe, with market participants highlighting the need for clear labelling and public procurement rules to boost buying interest. Fastmarkets’ assessment of the flat steel reduced carbon emissions differential, for example, in Northern Europe, was €40-50 per ton on this January, stable over the recent week. Fastmarkets’ methodology defines reduced carbon emissions flat steel as steel produced with carbon emissions thresholds of 1.4-1.8 tons of CO2 per ton of steel.
The first wave of EU’s announced green steel DRI/EAF projects has already faced increasing pressure relating to raw materials availability and energy pricing. DR-grade pellet, high-quality scrap, and reliable renewable electricity remain critical constraints for scaling low-carbon output. The EU member States are encouraged to take “appropriate measures” to ensure that scrap metals and other secondary raw materials generated within the EU, including steel, aluminium and copper scrap, as well as black mass (where economically viable) would be first made available for recovery, recycling or re-use within the EU states.
Under the proposal, steel decarbonization projects would benefit from: -single permit applications covering all authorizations; – mandatory digital permitting and data reuse; – legally binding decision timelines, aligned with NZIA rules; – tacit approval at intermediate stages, except where environmental impact assessments apply; – a presumption of overriding public interest for large-scale projects such as hydrogen-based DRI and electric-arc furnaces.
Source: https://eurometal.net/leaked-eu-industrial-accelerator-act-seeks-to-unlock-green-steel-demand-stalled-investments/
Global overcapacity and economic security concerns
The Commission repeatedly links steel to broader economic security concerns, warning that persistent vulnerabilities in strategic supply chains could “weaken the economy, slow down investments and ultimately undermine public support for the transition.”
Global overcapacity, particularly in steel, is cited as a growing risk, alongside widening cost gaps with other regions and high energy prices.
Thus, the IAA draft notes that “if these supply chains are not secured and protected, significant economic and societal risks could emerge, including disruption of public order in the Union”.
While the Industrial Accelerator Act does not introduce new steel trade defense measures directly, it is designed to operate alongside existing instruments, including trade defenses and CBAM, to reinforce EU steel competitiveness.
Controversies in governance
The EU institutions struck a political agreement in December 2025, to revamp the regulation, which requires member countries to screen investments in military equipment, technologies like AI and semiconductors.
More in: https://www.politico.eu/article/political-battles-swirl-over-fate-europe-car-industry/
EU member states fought hard against the Commission proposal to give up what has traditionally been a national competence. Thus, for example, Sweden has come out against the draft proposal, arguing that the FDI screening tools and other “existing mechanisms aiming for protection of strategic sectors in the EU” are already in place, according to the Confederation of Swedish Enterprise. But to make such strict conditions worth the downside of giving away a technological upper hand, the EU would also need stricter import restrictions, some say.
The Commission has tried to get tough on China through actions like imposing duties of up to 35 percent on made-in-China electric vehicles in 2024. That has, however, failed to shut out Chinese EVs as the manufacturers can still make a profit in Europe even with the extra duties; thus, there were not enough constraints to force them to do so. And the European market is still extremely open and -as some doubt that the Chinese companies would be willing to invest under such strict conditions in the current regulatory environment.
France is calling for flexibilities for carmakers if at least 75 percent of the added value of their models is produced in the bloc and if they also contain critical components in areas like electronics and batteries originating from the EU.
However, Germany is balking at that, fearing it will spark a global trade war with the U.S. and China. Despite the drumbeat from Berlin on the need to radically rethink the 2035 law, even the leading German parties warned that a “maximum of 10 percent of the problems are caused by European regulations”. The experts warn that “no matter what the CO2 regulation would do for passenger cars”, even if all these regulations were to be abolished, it “would not lead to the German and European automotive industry rising like a phoenix from the ashes”.
Source and citation from:
https://www.politico.eu/article/political-battles-swirl-over-fate-europe-car-industry/
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