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(CN) — The European Union on Wednesday proposed a “Made in Europe” strategy to boost the EU’s industrial base, reduce dependencies on China and stay competitive in an increasingly unstable world.
Dubbed the Industrial Accelerator Act, the EU’s executive branch issued a draft of long-delayed proposals to channel government contracts and public funds toward European-based companies making automobiles, clean technologies, steel, aluminum, cement and chemicals.
“What I am presenting to you today is more than just a change in operating procedures; it is a change in doctrine — one that was unthinkable just a few months ago,” said EU industry chief Stephane Sejourne.
The act aims to provide incentives for low-carbon production within the EU and create stable demand for industrial products made or assembled in Europe.
EU officials said the goal is to get public funds and foreign investments to support manufacturing inside the 27-nation bloc. To do this, companies would need to meet minimum thresholds for EU-made parts and large investments from dominant foreign firms would need to comply with EU-made rules and employ EU workers.
For example, under the rules, electric vehicles bought by public bodies might have to be mostly manufactured in the EU.
The proposals are part of wider EU efforts at boosting industrial output while reducing carbon emissions. The act aims to speed up permitting and approvals for industrial projects, too, by making it easier and quicker to invest in factories and production infrastructure.
The proposals were subject to changes and getting watered down, experts said. The European Parliament and EU leaders must still sign off on the proposals.
Critics warn the rules add more red tape, scare away foreign investment, place protectionism over free-market principles and pose new burdens on European companies at a time when industrial output in Europe is already getting hit by high energy costs, superpower rivalry, chain supply disruptions and U.S. President Donald Trump’s trade wars.
The European Commission said the package aims to bring manufacturing’s share of EU gross domestic product to 20% by 2035, up from about 14% in 2024. Brussels says about 600,000 jobs could be lost over a decade unless industrial decline is halted.
A chief concern is Europe’s massive reliance on China’s dominance in advanced manufacturing and clean technologies, such as solar panels, wind turbines and batteries.
Haggling over the proposed rules delayed their release. France has championed the rules, but Germany, among others, has resisted. Germany has wanted to allow trade partners to be included under a “Made with Europe” approach.
EU policymakers opted to treat countries that let European companies compete on equal terms with local firms for public money to be included in the definition of EU-made.
“We will exclude those who do not play by the rules or who pose a risk to our economic security,” Sejourne said, as reported by AFP, the French news agency.
If adopted, the rules would make governments fund infrastructure projects to ensure they include a minimum share of European low-carbon steel, cement and aluminum.
Electric vehicle manufacturers also would need to make sure at least 70% of their cars’ components are made in the EU to access public money. Similar rules would apply to batteries, solar, wind and nuclear.
The rules also seek to defend European manufacturing from foreign competitors and implicitly target Chinese firms that set up shop in the EU without hiring many European workers, without sharing technological know-how and barring EU shareholders from owning majority stakes.
The rules propose that major foreign companies must partner with European firms to open operations in the EU. They also place conditions on foreign investments of more than 100 million euros ($116 million) by companies that hold more than 40% of global production in the areas of electric vehicles, batteries, solar and critical raw materials.
Brussels wants those large foreign investments to include “EU shareholding majority, technology transfer, integration into EU value chains, and job creation.”
EU policymakers argue the bloc must encourage local production and ward off competition from Chinese rivals that they say receive unfair government subsidies.
Courthouse News reporter Cain Burdeau is based in the European Union.
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