An overly complex Act, which could frighten the EU’s international trading partners and make it less attractive, while also proving more costly for businesses…
On Thursday 28 May in Brussels, the EU27 Ministers responsible for Competitiveness expressed still very cautious views on the draft Industrial Accelerator Act (IAA), presented on 4 March by the Commission and aimed at defending strategic European industrial sectors by introducing a principle of European preference.
This would reserve part of public procurement, public aid or other tools involving public funding for European or international operators that have opened their markets, employ a certain percentage of European labour or use materials of European origin, for example. And this in three sectors: ‘cleantech’ (clean technologies), electric vehicles, and highly energy-intensive heavy industry.
During a public round-table discussion on the draft Act, the Member States appeared to have changed very little in their positions since February and a formal EU Council meeting that had made it possible to gauge their expectations and concerns (see EUROPE 13817/3).
While the French Minister Delegate for Industry, Sébastien Martin, defended this instrument as the only way to prevent the continued destruction of industrial jobs in the EU, and as not all that complex to implement thanks to possible self-certification mechanisms, as did Austria, which also called for new sectors such as quantum and biopharmaceuticals to be included in the Act, others were less enthusiastic.
For Denmark, for example, it is certainly difficult not to support the ambition of the proposal. “We need to reduce our dependencies and use the leverage of public procurement”, said Minister Morten Bødskov. “But the EU must remain open and respect its international trading partnerships”. “And the IAA must work in practice for businesses and public authorities, and on that point adaptations are needed”.
“10,000 industrial jobs have been lost in Belgium in one year”, continued the Belgian Minister, Laurent Hublet. “We therefore welcome the IAA to preserve industrial capacity and support the principle of reciprocity” in market access. “But we need simple things and we are questioning the complexity of the text and its effects on administrative burdens”, he added.
“Doing nothing is not an option”, said the Dutch Minister, Stientje Van Veldhoven-Van der Meer, also commented, “but we need to be careful with the European content approach. Our businesses need other markets, particularly for critical materials”.
Transfer European preference into the Regulation on public procurement. For Germany and Minister Frank Wetzel, the introduction of provisions on content of European origin is welcome, all the more so if they take reliable international partners into account. However, the principle of European preference “should be integrated into the future EU Regulation on public procurement, which is due this year, with a ‘sunset’ clause”, the Minister also proposed, as he also wants to avoid more bureaucracy. It is also necessary to assess the impact of these IAA measures on the EU as a whole.
Low-carbon criteria too restrictive. Other countries focused more on the other aspect of the Act, namely the requirements built into future calls for tender: requiring, for example, low-carbon steel thresholds, with a low-carbon share of EU origin.
The Act indeed provides, for public procurement, minimum standards for strategic materials such as steel, cement, aluminium, and certain ‘net-zero technologies’ (at least 25% of steel must be low-carbon; at least 5% of concrete and mortar must be low-carbon and of European origin; at least 25% of aluminium must be low-carbon and of European origin).
Poland, through Deputy State Secretary Michal Baranowski, believes that this could become a new source of fragmentation of the single market. “If European preference means decarbonisation, this will create competition among ourselves and will immediately place us at a disadvantage with criteria that are too strict”.
The Minister also considered that the Act runs counter to simplification “with far too much recourse to delegated acts”.
“The IAA rules need to be clarified in order to respect the level playing field in the EU, and nor should we alienate our trusted partners or disrupt global supply chains”, the Polish official added.
From Prague’s perspective, while there is support for the objectives of this IAA, work absolutely has to be done “on energy prices” and “reforming the Emissions Trading System”, Karel Havlíček also argued. The Member States’ “energy mix” must also be fully recognised in the IAA.
For Luxembourg, the IAA proposal to create pilot markets capable of generating more demand for green products is a good element of the proposal, but the EU must also remain a “reliable and open” partner, said the Deputy Permanent Representative.
Like others, the country also wants to avoid administrative overload and called for support, “incentives” for large industries, to implement these measures and increase their production capacities.
It is also appropriate, regarding the aspect of foreign direct investments of more than €100 million – which are also covered by European preference – not to “go against what we have just done with the foreign investment screening mechanism”.
The logic would be not to pile up overlapping legislation, the country warned.
Beforehand, Executive Vice-President Stéphane Séjourné, who is spearheading the IAA text, had tried to reassure the Member States about the administrative burdens and potentially induced costs of the new Act.
These will remain very limited, on the order of an increase of 0.22% for an electric vehicle or 0.45% for a building. “And we have a safeguard clause for costs”, the official justified.
Moreover, the IAA is entirely compatible with simplification, because of the principle of self-certification, he insisted.
As for the risk that the EU, with rules protecting its strategic sectors, might become less attractive, the exact opposite would happen, the Executive Vice-President argued.
“A certain number of countries have in fact contacted us for discussions: for example, Türkiye on the public procurement side; likewise on foreign investments”, said Stéphane Séjourné, who considered that the IAA, on the contrary, strengthens Europeans’ leverage to gain access to other foreign markets while protecting its own.
According to Commission sources, the United Kingdom, Canada, Morocco, Türkiye, and Japan have already contacted it to find out precisely how to fit into these new rules.
Ireland, as the future Presidency of the Council of the EU, did not express a view on the substance of the Act, but promised to keep to the objective set by the common ‘roadmap’ of the three European institutions on the single market, namely an overall agreement on the text by the end of 2026. (Original version in French by Solenn Paulic)