France and Germany are at odds over the Industrial Accelerator Act, a proposed EU law aimed at boosting clean industry while balancing protectionist measures with global trade concerns.
Key facts
- •The IAA aims to raise the EU manufacturing sector's share of the economy to 20% by 2035.
- •France supports strict 'Made in Europe' requirements to protect domestic industry from foreign competition.
- •Germany opposes aggressive protectionist measures due to its reliance on exports and fear of trade retaliation.
- •The Commission's original proposal included quotas for low-carbon cement and aluminum, but excluded specific origin requirements for steel.
- •A Council compromise draft proposes that 25% of steel used in public projects be low-carbon and of EU origin.
The European Union is currently debating the Industrial Accelerator Act (IAA), a legislative proposal designed to revitalize the European manufacturing sector and promote low-carbon production. As the European Parliament and the Council of the EU negotiate the final text, a significant divide has emerged between France and Germany. France advocates for stronger 'Made in Europe' protections, while Germany fears that such measures could trigger retaliatory trade actions from international partners.
By the numbers
Goals of the Industrial Accelerator Act
Proposed by the European Commission, the IAA seeks to increase the manufacturing sector's share of the EU economy from approximately 14% to 20% by 2035. The legislation aims to streamline administrative processes, accelerate project authorizations, and create pilot markets for low-carbon products. It includes proposed quotas for public procurement, such as 5% for cement and 25% for aluminum, to stimulate demand for sustainable technologies.
Disputes Over Steel and Protectionism
The treatment of steel remains a point of contention. While the Commission proposed a 25% low-carbon quota for steel in public projects, it did not mandate that the material be produced within the EU. The industry lobby Eurofer has criticized this, arguing that without strict 'Made in Europe' requirements, the policy may favor imports and undermine local decarbonization investments. Sources indicate the Commission initially omitted EU-specific steel quotas to avoid friction with the United States and India.
Legislative Compromises and Political Divisions
A compromise draft from the Council of the EU suggests requiring that at least 25% of steel used in public projects be both low-carbon and of European origin. Meanwhile, a proposal from the Irish presidency of the Council suggests replacing broad 'Made in Europe' requirements with a more precise system based on specific trade agreements. The European Parliament is also divided, with some groups supporting a more assertive industrial strategy to compete with China and the U.S., while others express concern that the focus on competitiveness may weaken climate goals.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Politico Europe.
