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Dr.Faruk ŞEN
UGM Genel Müdür Yardımcısı
The European Commission has proposed a new regulatory package called the Industrial Accelerator Act. This regulation aims to increase demand for low-carbon technologies and products manufactured in Europe. The goal is to strengthen production in the EU, support business growth, create new jobs, and accelerate the transition of industry to cleaner and more future-proof technologies.
The main objective of the proposal is to increase industrial capacity in strategic sectors, accelerate decarbonization, and strengthen the economic resilience and strategic autonomy of the European Union. At the same time, it aims to increase the share of manufacturing in the EU economy and achieve climate targets.
In this context, the aim is to increase the share of the manufacturing industry in the EU GDP from 14.3% in 2024 to 20% by 2035. The regulation focuses particularly on energy-intensive industries (steel, cement, aluminum, and chemicals), net-zero technologies (batteries, solar panels, wind turbines, and heat pumps), and the automotive supply chain.
The proposal envisages four key mechanisms to achieve its objectives. The first is the acceleration of permitting processes. “Single Access Points” will be established to digitize and simplify permitting procedures for industrial projects, and time limits will be imposed on decision-making processes to reduce bureaucratic barriers.
The second mechanism is the creation of lead markets. Demand for low-carbon and “EU-made” products will be increased through public procurement and public support programs, and resilience and sustainability criteria will be made mandatory, particularly in steel, cement, and net-zero technologies.
The third mechanism involves subjecting direct foreign investments to certain conditions. Foreign investments exceeding 100 million euros in strategic sectors will need to meet criteria such as ensuring technology transfer, having at least 50% of the workforce consisting of EU employees, and contributing to R&D activities.
The fourth mechanism involves the creation of industrial acceleration zones. Member states will designate special zones for the clustering of industrial activities and provide advantages such as collective permits and infrastructure priority for projects in these zones.
The regulation also highlights some critical risks facing the EU industry. In particular, it emphasizes that excessive reliance on third countries, such as China, for net-zero technologies poses economic and strategic risks. It also states that high energy prices, global subsidies, and the high capital costs of decarbonization are weakening the EU's competitiveness. In addition, it is stated that a significant portion of decarbonization projects cannot be implemented due to complex permitting processes and financing issues.
The implementation of the law is expected to generate a net benefit of approximately €8 billion for the EU economy by 2030. The digitization of permit processes is expected to reduce the administrative burden on businesses by approximately €240 million. Furthermore, it aims to permanently reduce industrial greenhouse gas emissions by promoting low-carbon products. In this respect, the regulation constitutes a strategic policy framework aimed at modernizing European industry and maintaining its global competitiveness in clean technology.
The strategic vision of the law is to strengthen the industrial base while achieving the EU's climate goals. In this regard, the goal of increasing the share of manufacturing in the EU economy to at least 20% by 2035 has been set as a legal target. While the transition to a clean and digital economy presents significant opportunities, high energy prices, global competitive pressure, and dependence on third countries, particularly China, pose significant risks to the EU's economic security.
The regulation focuses on sectors that are of strategic importance to the EU economy and represent approximately 15% of total industrial production. Energy-intensive industries include steel, cement, aluminum, and chemicals, which are responsible for approximately 22.3% of the EU's greenhouse gas emissions. Net-zero technologies include batteries, solar photovoltaic systems, wind turbines, heat pumps, electrolysers, and nuclear fission technologies. The automotive supply chain covers electric vehicles, traction batteries, and critical electronic systems.
Permit processes are being accelerated and digitized to reduce bureaucratic procedures, which are seen as one of the most significant barriers to investment. Member states will establish “Single Access Points” to ensure that all permit applications are made through a single digital platform. European Digital Wallets will be used for data security and verification during this process. After confirming that applications are complete, the competent authorities will be obliged to make comprehensive decisions within specified timeframes. Carbon-neutralization projects and net-zero technology investments in energy-intensive industries will gain strategic project status and benefit from accelerated environmental assessment processes.
Public procurement and support mechanisms will be used as important tools to increase demand for low-carbon and European-produced products. Mandatory technical specifications for the use of low-carbon steel, cement, and aluminum will be introduced in public tenders. Exceptions may be applied in certain cases, such as when the cost difference exceeds 25%. Resilience criteria, such as cybersecurity and the proportion of EU-origin components, will be taken into account in auctions for renewable energy technologies. In addition, clear “EU-origin” definitions will be established for products such as small and affordable electric vehicles and low-carbon steel, and financial support will be linked to these criteria.
Large foreign investments in strategic sectors will also be subject to certain conditions. For investments exceeding €100 million where the investor controls more than 40% of global production capacity in the relevant sector, at least four of the six specified criteria must be met for the investment to be approved. These criteria include the foreign investor's share not exceeding 49%, the establishment of a joint venture with EU companies, the licensing of intellectual property and technical knowledge to the EU-based company, at least 1% of revenue generated in the EU must be allocated to R&D, at least 50% of the workforce must consist of EU employees, and at least 30% of production inputs must be sourced from within the EU.
To encourage the clustering of industrial activities, member states will designate “industrial acceleration zones.” Thanks to pre-approved general permits for facilities to be established in these zones, the permitting processes for individual projects will be significantly shortened. In addition, priority will be given to energy infrastructure, and joint procurement mechanisms will be developed for access to critical raw materials.
A robust monitoring and enforcement mechanism is also envisaged to ensure the effective implementation of the law. The European Commission will evaluate the implementation of the regulation every three years and may update the list of strategic sectors after five years. Failure to comply with foreign investment conditions or notification obligations may result in penalties of up to 5% of the investment value or the investor's daily turnover.
The annexes to the proposal provide detailed definitions of strategic sectors and industrial production areas. Energy-intensive industries include sectors such as paper and paper products, refined petroleum products, chemicals, plastic and rubber products, non-metallic minerals, and primary metal production. The automotive industry covers the production of motor vehicles and trailers. Net-zero technologies include clean energy technologies as defined in relevant EU regulations.
Starting January 1, 2029, low-carbon and EU origin requirements will be introduced for certain products in public procurement and public intervention programs. At least 25% of the total steel volume used in construction, infrastructure, and vehicle manufacturing must be low-carbon. For concrete and mortar use, at least 5% of the total volume must be low-carbon and EU-origin. For aluminum, at least 25% of the total volume used in construction, infrastructure, and vehicle production must be low-carbon and EU-origin.
Strict origin rules will also apply for electric vehicles to benefit from public procurement and public support. Vehicles will have to be assembled within the EU, and at least 70% of the factory price of components, excluding the battery, must be of EU origin. At least three main components of the traction battery must be EU-origin, while the requirement that at least 50% of the e-powertrain and main electronic systems be EU-origin will apply three years after the regulation enters into force. Furthermore, if at least 85% of a manufacturer's vehicles registered in the EU meet these requirements, all of the manufacturer's relevant vehicles may be considered compliant for a certain period.
In addition, administrative processes for businesses will be streamlined through the Single Digital Gateway system. All information and application procedures related to the necessary permit processes for industrial production projects, net-zero technologies, and critical raw material projects will be made accessible in a digital environment. This aims to reduce the bureaucratic burden faced by businesses in the processes of establishing, expanding, or converting facilities.
This regulation allows certain third-country products to be considered “equivalent to Union origin” under specific conditions. A particularly noteworthy aspect of the regulation is that products originating from countries with a free trade area or customs union with the EU may, in certain circumstances, be considered equivalent to EU-origin products.
The regulation primarily establishes rules of origin to be applied in public intervention instruments such as public procurement, public support, and energy or technology tenders. In terms of the EU origin requirements to be applied in public tenders, content originating from countries with which the EU has a free trade area or customs union agreement may also be considered EU origin.
From Türkiye's perspective, the most important aspect of these regulations is that products manufactured in Türkiye and traded under the customs union with the EU can now be considered as having “equivalent content to Union origin” in certain public policy instruments. This situation opens the door for Turkish-origin inputs to be included in the same category as EU-origin products, particularly in public tenders, public support programs, or auctions for net-zero technology investments.
However, the regulation does not define this equivalence as an automatic and unconditional right. The relevant articles grant the Commission the authority to exclude a third country from this equivalence scope if certain criteria are met. These criteria include the country failing to provide national treatment to EU products, the emergence of dependencies that threaten supply security in the EU's strategic sectors, or the activation of exceptions provided for in international agreements.
Therefore, Türkiye's ability to benefit from the advantages arising from this regulation will depend not only on its legal status but also on the reciprocity and strategic security dimensions of its economic relations with the EU.
In this context, it can be said that the aforementioned articles have a two-fold meaning for Türkiye. First, the regulation demonstrates that EU industrial policy is increasingly evolving towards a value chain-based and origin-focused structure. The EU is placing “Made in EU” or “Union origin” criteria at the center of its industrial policy by using powerful demand instruments such as public procurement and public support. In this context, Türkiye's status as a customs union partner may create an important opportunity for the integration of Turkish production into EU industrial value chains. Particularly in areas such as the automotive supply chain, energy-intensive sectors, and net-zero technologies, the recognition of inputs produced in Türkiye as “equivalent to EU content” in the EU industrial ecosystem could strengthen the integration of Turkish industry into the EU market.
Secondly, the regulation demonstrates that the EU uses its industrial policy tools in conjunction with its economic security and strategic autonomy objectives. Therefore, equivalent origin status is not a permanent trade right, but rather a conditional status shaped within the framework of the EU's supply chain security and industrial capacity policies. The Commission's authority to exclude certain countries from this scope reflects the EU's approach to limiting external dependence in strategic sectors and keeping production of critical technologies within Europe.
Consequently, this regulation represents not only a commercial opportunity for Türkiye, but also a new policy area of strategic importance for industrial policy integration with the EU and the future of the customs union.
Source: https://single-market-economy.ec.europa.eu/publications/industrial-accelerator-act_en
