The Industrial Accelerator Act (IAA) – BusinessEurope comments

Key messages

Many European sectors, particularly in industry, are under strong economic pressure due to repeated economic crises, fierce international competition, increasingly aggressive industrial strategies and overcapacities on the part of some third countries as well as excessive regulatory constraints that Europe has imposed on itself.

Faced with this situation, Europe needs a reinforced and coordinated policy response. While strengthening Europe’s own competitiveness is urgent, additional industrial policy and effective trade measures are required to retain the industrial base, improve resilience and support the transition towards a climate-neutral economy.

The Industrial Accelerator Act (IAA) is part of this broad policy response. While its overall objective makes sense, the proposal includes far-reaching measures, several of which raise reservations regarding their design, scope and interaction with other policies. A careful assessment of the appropriateness, proportionality and complexity of these individual measures is therefore essential.

• Strengthening measures on permits: Overall, the European Commission’s ambition to strengthen and accelerate permitting procedures is welcome, as this remains a key barrier to industrial investments. However, their scope should encompass all sectors, and further steps are needed to harmonise the European framework. Furthermore, it seems essential to review the impact of certain environmental EU legislation on permitting procedures.
• Ensuring a proportionate and predictable scope: The IAA introduces far-reaching measures such as European preference and FDI-related provisions, which raise concerns and whose impact remains uncertain. Therefore, any potential extension of the scope should be targeted, case-by-case, proportionate, and based on thorough assessments.
• Developing demand through “lead markets”: Europe has made big efforts to decarbonise its industries, but investments are not proceeding fast enough, often because demand for sustainable products is still lacking. Stimulating demand for low-carbon products is necessary to strengthen these markets. Public procurement and support measures have a role to play in selected strategic areas, but their impact is structurally limited and new complex bureaucratic layers must be avoided. Demand must also come from the private sector, but a non-regulatory and market-based approach must be prioritised.
• Using the concept of European preference in a targeted and cautious manner: While the concept of European preference seems justifiable within the strict framework of identified sectors in the IAA, it must consider key trading partners, especially those that are closely integrated with the EU, and it cannot be applied by default to every European initiative. The associated risks are numerous (e.g. higher costs, administrative burdens, distortion in complex value chains, trade-related risks) and the overall impact remains uncertain. Furthermore, critical points such as countries considered equivalent and rules of origin must be agreed upon through ordinary legislative procedure, without the possibility of subsequent adjustments by delegated acts, as they create huge business uncertainty.
• Revising the proposal related to Foreign Direct Investments: At a time when FDI is most needed for the EU to grow, innovate and create jobs, it is important to safeguard the EU’s attractiveness as an investment destination. While we agree with the premise of ensuring that FDI creates added value in the EU, the provisions as currently designed are overly prescriptive and risk developing a second, parallel system for FDI screening in the EU, leading to duplications and legal discrepancies and increased administrative burden for both authorities and investors. We support one system for the screening of FDI in the EU based on a single, clear and predictable set of rules and a coherent review process.