EU Proposes "Made in Europe" Law to Boost Local Industries

The European Commission is set to unveil a draft law, known as the "Industrial Accelerator Act," on February 26, 2026, aimed at ensuring that a significant portion of products funded by public money is manufactured within Europe. This initiative is part of the EU's broader strategy to enhance the competitiveness of local industries against global manufacturers, particularly those in China, which operate under less stringent regulations and lower energy costs. The proposal seeks to leverage the EU's substantial public procurement budget, which exceeds 2 trillion euros ($2.37 trillion), representing 14% of the EU's economic output.

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The draft law outlines specific requirements for various strategic sectors, including batteries, solar and wind energy, hydrogen production, and nuclear power. For instance, solar panels must have their inverters and two main components produced in Europe within one year, escalating to three components after three years. Electric vehicles procured through public contracts must be assembled in the EU, with 70% of their components, excluding batteries, sourced from Europe. Additionally, aluminium manufacturers benefiting from subsidies would need to ensure that at least 25% of their products are Europe-made, while concrete would have a minimum requirement of 5%.

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The draft law aligns with the European Economic Area, which includes the 27 EU member states, Iceland, Liechtenstein, and Norway, but excludes the United Kingdom. It also allows for the inclusion of "trusted partners" in the future, contingent on reciprocal international commitments or contributions to EU competitiveness. Notably, exceptions may apply if a product is exclusively manufactured by a single company globally or if the cost of switching to Europe-made products exceeds 30%.

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The proposal has garnered significant support from various sectors, particularly from France, where EU Commissioner Stéphane Séjourne is leading the initiative. Over 1,100 business leaders have endorsed the plan, although notable dissent has emerged from the automotive industry, which fears that stringent definitions of "made in Europe" could disrupt their global supply chains. German Chancellor Friedrich Merz has expressed caution, advocating for a "made-with-Europe" approach that would consider partnerships with other trade nations. Conversely, countries like Sweden and the Czech Republic have raised concerns that the legislation could hinder investment and inflate prices within Europe.

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While the draft law has strong backing, its specifics are still subject to negotiation among EU member states and the European Parliament. The definition of "made in Europe" remains a contentious issue, with potential implications for various industries. The proposal has already faced delays, and its final form may differ significantly from the current draft.

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• “Sweden and the Czech Republic have warned that the plans could deter investment and raise prices in Europe.” — Swedish Government Source

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