European Industrial Law: A master plan to build ‘Made in Europe’ with a procurement power of €2 Trillion
The forthcoming Industrial Accelerator Act, slated for publication on February 26, marks a watershed moment in the European Union’s pursuit of “industrial sovereignty”. This legislative framework moves beyond mere rhetoric, establishing a concrete mandate: a minimum proportion of products utilized in strategic technologies must be “made in Europe” whenever public procurement or manufacturing subsidies are deployed.
From a strategic standpoint, this is a defensive and offensive maneuver. It addresses the systemic disadvantages faced by European firms – specifically high energy costs and stringent regulatory overhead – while countering aggressive industrial policies from China and other global competitors. By mobilizing the EU’s massive public procurement market, which accounts for €2 trillion (approximately 14% of EU GDP), the Commission is transforming state spending into a strategic lever to re-shore critical supply chains.
Strategic Sector Mandates and Content Requirements
The draft Act applies specific local content and low-carbon thresholds to products acquired through public procurement (including leasing) or those benefiting from direct manufacturing subsidies. The requirements are technology-specific and designed to scale over time.
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Sector
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Specific Mandates and Implementation Timelines
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Solar Panels
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Phased Requirement: After year one, the inverter and two other main components must be Europe-made. This escalates to three main components after two additional years.
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Electric Vehicles (EVs)
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Procurement Scope: Applies to vehicles bought or leased via public procurement. Must be assembled in the EU; 70% of component value (excluding the battery) must be European-made.
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Aluminium
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Composite Requirement: Manufacturers receiving subsidies must ensure 25% of products are both Europe-made and low-carbon.
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Concrete
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Local Content: A 5% minimum requirement for Europe-made production.
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Steel
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Transparency: Implementation of a voluntary labeling system for greenhouse gas emissions intensity to incentivize low-carbon adoption.
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- Batteries and storage solutions
- Wind energy components
- Hydrogen manufacturing equipment
- Nuclear power plant technologies
Regulations on Foreign Direct Investment (FDI)
To mitigate strategic dependencies and prevent market monopolization by dominant global players, the Act introduces restrictive conditions for foreign investments exceeding €100 million in strategic sectors. These rules are triggered specifically when the investor originates from a nation controlling 40% or more of global manufacturing capacity in that sector—a clear move to prevent “strategic capture” by non-EU entities.
In such cases, investors face two primary constraints:
Ownership Restrictions: Foreign entities are prohibited from holding a majority stake in the EU-based target company.
IP Mandatory Licensing: Investors must license their intellectual property to ensure that the technological benefits and operational control remain anchored within the Union.
Geographic Scope: Defining ‘Europe’
The definition of “Europe” remains the most contentious geopolitical aspect of the draft. The current framework uses the European Economic Area (EEA) as the primary boundary.
Included Jurisdictions: All 27 EU Member States, plus Iceland, Liechtenstein, and Norway.
The Britain Exclusion: As currently drafted, the United Kingdom is excluded from “made in Europe” status, potentially disrupting integrated cross-channel supply chains.
The “Trusted Partner” Safety Valve: The Commission retains the authority to expand this definition to include “Trusted Partners.”
Inclusion Criteria: Future partners must demonstrate reciprocal international commitments (e.g., adherence to the WTO Government Procurement Agreement) or provide significant contributions to EU security and competitiveness. This clause serves as a diplomatic opening for the UK or US, provided they align with EU industrial standards.
Implementation Exceptions and Flexibilities
To prevent supply chain paralysis or excessive fiscal strain on Member States, the Act includes two primary economic “escape clauses”:
Single-Source Scarcity: Mandates may be waived if the required product is manufactured by only one company globally, preventing a “Made in Europe” requirement from halting essential projects.
Economic Viability Threshold: Requirements are lifted if opting for a Europe-made alternative would result in a price premium of 30% or higher compared to global market rates.
Conclusion
The final version of the Act is expected to be more fluid than the initial draft, with “Trusted Partner” designations likely serving as the primary bargaining chip for trade-skeptical Member States.
The ‘Industrial Accelerator Act’ is a strong shift in European trade policy away from ‘protectionism’ and towards ‘strategic autonomy’. While it is an ambitious attempt to strengthen local industry, its successful implementation will depend on its compatibility with World Trade Organization (WTO) rules and on the internal consent of member states. The draft outline is not yet final and many of its provisions may change through discussions in the European Parliament.
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সরকারি ক্রয়ে রেকর্ড ব্যবস্থাপনাঃ আইনি কাঠামো ও ব্যবহারিক নির্দেশিকা
প্রকৌ: মো: মোকতার হোসেন MCIPS, PMP, CPCM উপ-পরিচালক (নির্বাহী প্রকৌশলী) নক্সা ও পরিদর্শণ-১ পরিদপ্তর, বাংলাদেশ বিদ্যুৎ উন্নয়ন বোর্ড, ঢাকা। মোবাইল: ০১৭২২০৪৪৩৩৫ ইমেইল: moktar031061@gmail.com