In a final draft of the Industrial Accelerator Act, due to be published on 4 March, the European Commission has further clarified the definition of ‘trusted third countries’ or ‘specific manufacturers’ whose content is considered equivalent to that of EU origin.
According to the text, as seen by Agence Europe on Friday 27 February, the Commission will have to take account of the following factors when identifying these trusted partners: - reciprocal bilateral and international commitments, such as the Agreement on Government Procurement; - the contribution to the competitiveness, diversification and resilience of the Union’s supply chains and to the objectives of economic security; - specific manufacturers of Union’s strategic interest established in third countries; - legal provisions in force in a third country recognising EU products as originating in that third country. These criteria are slightly broader than a previous version which only presented the first two (see EUROPE 13807/3).
Strategic sectors reduced? A new Annex also lists the strategic sectors concerned, but this time omits sectors that are essential to the Union’s economic security, such as advanced semiconductor technologies, artificial intelligence, quantum technologies, biotechnologies, advanced connectivity, navigation and digital technologies, and robotics, which were included in a previous version.
The new version of this Annex only mentions energy-intensive industries as strategic sectors concerned: - paper and paper products; - manufacture of coke and refined petroleum products; - manufacture of chemical products; - manufacture of rubber and plastic products; - manufacture of other non-metallic minerals; - manufacture of base metals; - the automotive industry: manufacture of motor vehicles, trailers and semi-trailers, and net zero emission technologies.
Another addition: a date of 1 January 2029 for the new measures to take effect.
Thus, for public procurement procedures launched on or after 1 January 2029, where the contracts, works contracts or works concessions relate to the acquisition of products from energy-intensive industries, contracting authorities shall require the following minimum percentages: - steel and any product whose performance depends mainly on steel, intended for use in buildings, infrastructure and transport: at least 25% of the total volume of steel used must be low-carbon; - concrete and mortar, and any product whose performance depends mainly on concrete and mortar, intended for use in buildings and infrastructure: at least 5% of the total volume of concrete and mortar used must be low-carbon and originate from the EU; - aluminium, and any product whose performance depends mainly on aluminium, intended for use in buildings, infrastructure and transport: at least 25% of the total volume of aluminium used must be low-carbon and originate from the EU.
The text adds the same requirements for schemes established or updated from 1 January 2029, benefiting households or businesses and aimed primarily at supporting the construction or renovation of residential and commercial buildings and infrastructure, as well as the leasing and acquisition of motor vehicles.
Contrary to the demands of the European steel industry, the Commission does not appear to be changing its position and is not introducing a European preference.
With regard to steel, the proposal limits the requirements for steel used in the automotive and construction sectors to low-carbon criteria (rather than combining low-carbon and EU origin requirements) in the context of public procurement and support schemes. Given the recently proposed trade measure aimed at mitigating the negative effects of global overcapacity on the EU steel market, the introduction of an EU steel preference is not considered necessary.
“The sectors covered by the Industrial Accelerator Act – in particular energy intensive industries, net-zero technologies manufacturing, and automotive industry – account for a limited share of EU manufacturing output but play a disproportionate strategic role”, the Commission justifies in its introduction. Together, the strategic sectors targeted by this law represent around 15% of the EU’s manufacturing output. Their importance therefore lies less in their overall size than in their central role as upstream suppliers and catalysts for downstream industrial ecosystems, notably construction, mobility, energy, as well as the space and defence sectors.
Links to documents: https://aeur.eu/f/kyn; https://aeur.eu/f/kyo (Original version in French by Solenn Paulic with Pauline Denys)