COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a framework of measures for the acceleration of industrial capacity and decarbonisation in strategic sectors and amending Regulations (EU) 2018/1724, (EU) 2024/1735 and (EU) 2024/3110
Date: 2026-03-04
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU industrial policy, competitiveness, direct investment, foreign investment, industrial development, industrialisation, processing industry, production policy, reduction of gas emissions, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.3.2026  SWD(2026) 70 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a framework of measures for the acceleration of industrial capacity and decarbonisation in strategic sectors and amending Regulations (EU) 2018/1724,  (EU) 2024/1735 and (EU) 2024/3110 {COM(2026) 100 final} - {SEC(2026) 70 final} - {SWD(2026) 71 final} - {SWD(2026) 72 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The legal basis for this proposal is Article 114 of the Treaty on the Functioning of the European Union 
(TFEU), which enables the European Parliament and the Council to adopt measures to establish the 
single market and ensure its effective functioning. 

Moreover, Article 207 of the Treaty on the EU common commercial policy is the legal basis for the 
measures introducing minimum conditions on foreign investments to bring value added 
production in the Union for a specific set of sectors. 

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of Article 114, the Union’s competence is shared. 
In the case of Article 207, the Union’s competence is exclusive 

Subsidiarity does not apply for policy areas where the Union has exclusive competence as defined in 
Article 3 TFEU1. It is the specific legal basis which determines whether the proposal falls under the 
subsidiarity  control  mechanism.  Article  4  TFEU2  sets  out  the  areas  where  competence  is  shared 
between the Union and the Member States. Article 6 TFEU3 sets out the areas for which the Unions 
has competence only to support the actions of the Member States. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 24: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

- 

The  preparation  of  the  proposed  Industrial  Accelerator  Act  was  subject  to  a  thorough 
consultation process to gather the views of different stakeholders across the Union.  

-  A call for evidence and a public consultation ran from 15 April to 8 July 2025 (12 weeks) via 
the ‘Have your say’ portal. The call for evidence received 295 contributions, while the public 
consultation collected 314 answers. A factual synopsis report summarising the outcomes of 
the public consultation activities is publicly accessible on the ‘Europa’ portal5. In parallel, the 
European  Commission  held  targeted  consultations:  (i)  a  survey  of  62  energy-intensive 
industry stakeholders across the steel, non-ferrous, cement, ceramics, chemicals, glass and 
pulp  and  paper  sectors;  (ii)  ‘reality-check’  workshops  with  energy-intensive  industry 
companies and with the steel sector; and (iii) a Member State workshop on lead markets 
and permitting; plus a battery-sector targeted consultation (63 respondents).  

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E003&from=EN  
2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E004&from=EN  
3 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E006:EN:HTML  
4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN. 
5 Industrial Accelerator Act - speeding up decarbonisation. 

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-  A synopsis report summarising all stakeholders’ positions and contributions to the Industrial 
Accelerator  Act  is  presented  in  Annex  2  to  the  staff  working  document  on  the  impact 
assessment report6.  

- 

Furthermore, the explanatory memorandum and Chapter 3 of the impact assessment report 
present qualitative and – where possible – quantitative indicators enabling an assessment 
of the need to act at Union level. 

2.2 Does  the  explanatory  memorandum  (and  any  impact  assessment)  accompanying  the 
Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

Yes. The explanatory memorandum and Chapter 3 of the impact assessment report include 
a section that provides detailed proof of compliance with the subsidiarity principle.  

They also clarify why referring to the Union’s objective for a stronger manufacturing base is 
justified  for  subsidiarity  purposes.  This  objective  reflects  challenges  that  arise  from 
integrated  supply  chains,  cross-border  ecosystem  needs,  and  common  exposure  to 
international  pressures.  Acting  only  at  national  level  would  lead  to  uneven  approaches, 
undermine  the  level  playing  field,  and  weaken  the  functioning  of  the  single  market.  A 
coordinated framework is therefore necessary to ensure that national measures contribute 
coherently to this shared objective. 

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

infrastructure,  common  definitions,  and 

The objectives of the Industrial Accelerator Act cannot be achieved sufficiently by Member 
States  acting  alone  due  to  the  deeply  integrated  and  cross-border  nature  of  European 
industrial  value  chains  and  ecosystems,  energy  systems  and  investment  flows.  Industrial 
decarbonisation  projects  require  access  to  integrated  value  chains  and  depend  on 
interoperable  administrative 
transnational 
frameworks. The targeted consultations confirmed this: 90% of stakeholders considered EU-
level demand-side coordination essential. With reference to public procurement, existing 
green public procurement practices remain largely voluntary, sector-specific, fragmented, 
and inconsistently applied across Member States. Voluntary resilience criteria are even less 
frequently  integrated  into current  procurement  procedures.  The  absence  of  coordinated 
EU-level  action  results  in  divergent  national  rules  on:    low-carbon  product  definitions; 
resilience criteria in procurement; and investment-screening procedures. This conflicts with 
the Treaty’s single-market objectives (Articles 26 and 114 TFEU) and distorts competition 
across Member States. 

(a)  Are there significant/appreciable transnational/cross-border aspects to the problems being 

tackled? Have these been quantified? 

The  problems  identified  are  transnational  and  cross-border  as  they  relate  to  industrial 
decarbonisation investment and well-integrated supply chains in strategic sectors and clean 
technologies  across  the  Union.  For  instance,  looking  at  the  causes  of  the  slowdown  in 
decarbonisation  investments,  permitting  procedures  represent  a  bottleneck.  While 
Member States remain responsible for environmental and industrial permitting, they lack 
the capacity to ensure coherence and mutual recognition of procedures, time frames and 

6 Add reference when available. 

2 

 
 
 
 
 
(e.g.  administrative  complexity, 
data  requirements  across  borders.  The  causes 
infrastructure  access,  and  fragmented  regulatory  approaches)  vary  regionally  but  have 
Union-wide repercussions, as delays or inconsistencies in one Member State affect supply 
chains,  investment  decisions  and  downstream  markets  across  the  EU.  It  also  affects  the 
achievements of the  Union’s climate objectives. The problem is widespread, affecting all 
Member States with manufacturing industries, rather than being limited to a few isolated 
cases. Many authorities, especially at regional level, are overstretched and face resource 
and expertise constraints in handling complex decarbonisation projects. Member States and 
stakeholders generally agree on the need to streamline permitting and foster lead markets 
but  differ  on  instruments,  scope  and  speed  of  implementation.  This  divergence  justifies 
Union intervention to lay down a coherent, minimal set of common parameters ensuring 
that national actions contribute effectively to a single, well-functioning single market. 

(b)  Would national action or the absence of the EU-level action conflict with core objectives of 

the Treaty7 or significantly damage the interests of other Member States? 

Given  the  need  to  secure  a  competitive  industrial  base  and  strengthen  the  Union’s 
manufacturing capacity in key technologies underpinning the green and digital transitions, 
Member States may decide to: take unilateral decisions to secure foreign investments in key 
technologies at national level, in order to avoid increased dependencies; and/or introduce 
uncoordinated incentives to support domestic sectors and businesses. Such actions could 
ultimately distort competition between Member States, create intra-EU barriers to the free 
movement of goods, and contribute to the fragmentation of the single market. 

(c)  To  what  extent  do  Member  States  have  the  ability  or  possibility  to  enact  appropriate 

measures? 

A  regulation  is  of  general  application  and  is  binding  upon  and  directly  applicable  in  all 
Member States. Nevertheless, the proposal includes a few mandatory minimum measures, 
while giving Member States discretion as to the manner of implementation and the level of 
ambition they wish to pursue. Notably, creating lead markets enables Member States to lay 
down requirements exceeding those set out in the Regulation.  

to  simplify  and  accelerate  administrative  procedures 

Moreover,  the  Industrial  Accelerator  Act  proposes  measures  to  incentivise  national 
industrial 
authorities 
decarbonisation  projects.  The  measures  outline  the  general  objectives  to  be  achieved, 
leaving Member States the flexibility to implement them in the manner that best suits their 
internal processes and digital infrastructure.   

for 

(d)  How  does  the  problem  and  its  causes  (e.g.  negative  externalities,  spillover  effects)  vary 

across the national, regional and local levels of the EU? 

The  slowdown  in  decarbonisation  investments  and  current  supply  chain  vulnerabilities 
undermine the business case for EU industries and businesses and put the achievement of 
the EU’s climate end economic security goals at risk. Decline in industrial competitiveness 
would spill over across all sectors and stages of the value chains, ultimately jeopardising 
people’s well-being. Regions that currently host energy-intensive industries are particularly 
at risk of further economic and social decline, leading to widening disparities in employment 

7 https://europa.eu/european-union/about-eu/eu-in-brief_en. 

3 

 
 
 
 
and prosperity across the single market. Such growing imbalances ultimately threaten the 
Union’s overall resilience, as echoed in the 2025 Strategic Foresight Report8.  

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The  problems  identified  are  widespread  across  the  EU,  affecting  in  particular  the  more 
industrialised Member States, and the ones aspiring to be. Energy-intensive industries face 
similar challenges across all Member States, leading to comparable consequences such as 
industrial slowdown, loss of production capacity, postponed decarbonisation investments, 
and plant closures resulting in lay-offs. 

Moreover,  reducing  dependency  on  non-EU  countries  for  the  Union’s  most  strategic 
industries is a challenge for the Union, as such dependencies could constrain or delay the 
EU’s  ability  to  decarbonise  in  the  event  of  supply  disruptions.  Slowing  industrial 
decarbonisation  due  to  competitiveness  losses  and  supply  chain  vulnerabilities  poses  a 
serious challenge to the EU’s climate ambition, strategic autonomy and economic security.  

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

The  consultations  and  the  impact  assessment  carried  out  during  the  preparation  of  this 
proposal  indicated  that  Member  States  generally  support  the  initiative,  while  seeking  to 
balance the expected benefits of the preferred policy measures against the associated costs.  

In the case of permitting measures, they are in line with existing best practices regarding 
digitalisation,  and  timelines  fall  within  average  timelines  in  the  Union.  Moreover,  the 
Commission envisages to issue the necessary guidelines to ensure a successful achievement 
of  the  different  objectives,  notably  on  foreign  direct  investment  conditionalities  or  the 
designation of industrial acceleration areas by Member States.   

The  proposal  sets  targets  to  boost  capacities  of  different  strategic  industries  with  the 
objective  of  accelerating  decarbonisation  in  the  Union,  while  securing  a  stable  domestic 
supply. Every target has been measured based on existing and expected capacities for the 
different sectors to ensure its viability. 

(g)  How  do  the  views/preferred  courses  of  action  of  national,  regional  and  local  authorities 

differ across the EU? 

Overall, Member States are supportive of the Industrial Accelerator Act and recognise the 
need  for  EU-level  coordination  to  accelerate  industrial  decarbonisation  and  create  lead 
markets for European low-carbon products and technologies. In the dedicated consultation 
workshop, Member State representatives welcomed the proposal’s ambition but stressed 
the  importance  of maintaining  consistency  with  existing  legislation  such  as  the  Net-Zero 
Industry  Act,  the  Ecodesign  for  Sustainable  Products  Regulation,  and  circular  economy 
initiatives. Several Member States are in favour of introducing ‘Made in EU’ requirements 
and preference criteria in public procurement to stimulate demand. At the same time, they 
emphasise  the  importance  of  ensuring  technological  neutrality,  affordability,  alignment 
with  the  methodologies  of  the  EU  emissions  trading  system  and  the  carbon  border 
adjustment mechanism, and the avoidance of new administrative burdens. On permitting, 
Member  States  call  for  practical  simplification  through  digital  tools  and  standardised 
procedures while opposing strict deadlines. Some prefer limiting acceleration measures to 

8 COM(2025) 484 final 2025 Strategic Foresight Report. 

4 

 
 
 
 
 
 
major  decarbonisation  projects,  whereas  others  favour  cross-cutting  simplification 
applicable to all industrial investments.  

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 
better achieved at Union level by reason of scale or effects of that action (EU added value)? 

Yes, the objectives of the proposed action can be better achieved at Union level due to the 
scale, the urgency and the scope of the efforts needed. 

(a)  Are there clear benefits from EU-level action?   

Acting at EU level has clear added value. A common European framework will provide the 
scale,  coherence  and  predictability  needed  to  accelerate  industrial  decarbonisation  and 
strengthen competitiveness across the single market. It will guide and de-risk investments 
in low-carbon production processes, ensuring that industrial projects materialise in line with 
Europe’s collective objectives rather than through fragmented national approaches. 

In  particular,  EU-level  action  will  harmonise  definitions,  labelling  methodologies,  and 
demand-side instruments such as public procurement and European content requirements, 
thereby  preventing  market  distortions  and  ensuring  a  level  playing  field  for  industrial 
producers. Common principles for permitting and planning will also facilitate cross-border 
coordination, speed up project deployment, and improve access to shared infrastructure 
such as energy grids and CO₂ transport and storage networks. 

By replacing divergent national regimes with a single, coherent framework, this initiative 
will save companies and administrations significant time and resources, lower compliance 
costs, and provide greater legal certainty for investors. Coordinated action at EU level will 
create  economies  of  scale,  accelerate  the  industrial  transition,  and  strengthen  the 
resilience, sustainability and competitiveness of Europe’s industrial base. 

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

Yes. Acting at EU level provides clear economies of scale and efficiency gains. By setting a 
single, coherent framework for industrial decarbonisation, the Industrial Accelerator Act will 
streamline  permitting  procedures  across  Member  States,  strengthen  demand  for  low-
carbon  and  EU-made  products,  and  create  a  predictable  investment  environment  that 
supports competitiveness and economic security. 

EU-level  coordination  will deliver  substantial  efficiency  benefits  by  harmonising  rules  for 
public procurement, public support schemes, and foreign direct investment conditionalities, 
thereby preventing regulatory fragmentation and reducing compliance costs for businesses. 
A uniform application of these measures will also avoid forum shopping and ensure a level 
playing field for companies operating within the single market. 

The preferred policy option focuses on simplifying and accelerating industrial investments 
while  maintaining  environmental  protection.  It  reduces  administrative  complexity  by 
building  on  existing  legislative  frameworks  (such  as  the  Net-Zero  Industry  Act)  through 
targeted amendments rather than creating new, stand-alone systems. This approach avoids 
duplication, lowers adjustment costs, and delivers faster results. 

5 

 
 
 
 
 
 
 
Overall, EU action enables the objectives to be achieved more efficiently than at national 
level  by  pooling  resources,  providing  legal  clarity,  and  ensuring  consistency  across  the 
Union.  The  coordinated  framework  will  help  attract investment  and  enhance  the  overall 
functioning of the  single market by supporting a resilient,  competitive  and decarbonised 
European industrial base. 

(c)  What  are  the  benefits  in  replacing  different  national  policies  and  rules  with  a  more 

homogenous policy approach?  

As  stated  above,  achieving  Europe’s  industrial  decarbonisation  and  competitiveness 
objectives requires a coherent and harmonised framework at EU level. Fragmented national 
approaches would risk undermining the single market by creating unequal conditions for 
companies, increasing administrative burdens, and causing delays in project deployment. 
Diverging national rules on permitting, labelling or EU-content requirements could result in 
market  distortions,  unfair competition,  and  higher  compliance  costs  for operators  active 
across several Member States. 

A  more  homogenous  EU  framework  will  instead  ensure  consistency,  predictability  and 
interoperability  across  the  Union,  allowing  companies  to  invest  and  operate  efficiently 
under  a  harmonised  set  of  rules.  It  will  also  enable  better  coordination  on  shared 
infrastructure, maximising synergies and avoiding duplication of effort. 

By replacing divergent national policies with a common European framework, the Industrial 
Accelerator  Act  will  strengthen  resilience  to  external  shocks,  ensure  a  level  playing  field 
across the single market, and enhance the Union’s ability to respond collectively to global 
industrial and economic challenges. 

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

There is no loss of competence for Member States and local or regional authorities as they 
remain the main actors responsible for carrying out permitting procedures and introducing 
public procurement requirements. This Regulation provides a common framework for their 
actions. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

The Regulation sets out specific timelines and criteria to guide Member States’ actions when 
a specific requirement is laid down. Several provisions of the Regulation will be specified 
through implementing or delegated acts, which should further harmonise and facilitate the 
implementation of the obligations introduced under this Regulation, thus improving legal 
clarity. 

3.  Proportionality: How the EU should act 

3.1  Does  the  explanatory  memorandum  (and  any  impact  assessment)  accompanying  the 
Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal  and  a  statement  allowing  appraisal  of  the  compliance  of  the  proposal  with  the 
principle of proportionality? 

Yes. The explanatory memorandum and the impact assessment report (Chapter 3) provide 
detailed proof of compliance with the proportionality principle. The proposal is limited to 

6 

 
 
 
 
what is necessary to achieve its objectives, ensuring the functioning of the single market for 
decarbonised and resilient industrial production, without going beyond what is required. 

- 

The initiative focuses on a narrow set of targeted measures: 
streamlining  and  digitalisation  of  permitting  procedures  for  industrial  manufacturing 
projects, 
creation of EU lead-markets with minimally harmonised demand-side criteria  

- 
-  harmonisation of conditions for foreign direct investments in emerging key strategic sectors 

- 

to ensure high value added to the single market, 
creation  of 
industrial  acceleration  areas  to 
manufacturing industry, 

increase  the  competitiveness  of  the 

-  harmonisation  of  definitions  and 

labelling 

for 

low-carbon 

steel  products. 

The  measures  establish  enabling  frameworks  and  shared  principles,  leaving  detailed 
implementation  and  administrative  organisation  to  national  authorities.  The  proposal 
therefore complies with the proportionality principle: it intervenes only where coordination 
at  EU  level  adds  clear  value,  and  with  the  least  intrusive  means  consistent  with  the 
objectives of efficiency, legal certainty and a level playing field.  

3.2 Based  on  the  answers  to  the  questions  below  and  information  available  from  any  impact 
assessment,  the  explanatory  memorandum  or  other  sources,  is  the  proposed  action  an 
appropriate way to achieve the intended objectives? 

The  proposed  action  is  an  appropriate  and  proportionate  way  to  achieve  the  intended 
objectives.  It  targets  those  areas  where  Member  States  cannot  effectively  act  alone, 
ensuring  common  product  definitions,  coherent  permitting  principles  and  uniform 
investment  conditions,  and  relies  on  a  simple,  flexible  instrument  that  minimises 
administrative burden while securing EU-wide consistency. 

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

Yes. The scope  of the  Industrial Accelerator Act is limited to cross-border issues (market 
fragmentation and administrative bottlenecks) that require coordination across 27 Member 
States.  National  action  alone  cannot  ensure  equal  competitive  conditions  or  guarantee 
mutual recognition of procedures. 

(b)  Is  the  form  of  Union  action  (choice  of  instrument)  justified,  as  simple  as  possible,  and 
coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued  (e.g.  choice  between  regulation,  (framework)  directive,  recommendation,  or 
alternative regulatory methods such as co-legislation, etc.)? 

A  regulation  is  the  most  suitable  instrument,  as  it  ensures  uniform  application  of  core 
definitions and procedures essential for a functioning single market. It avoids delays linked 
to transposition and prevents divergences that could arise under a directive.  

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument og approach?) 

The  proposal  leaves  wide  discretion  to  Member  States  in  organising  their  permitting 
systems,  defining  administrative  responsibilities,  and  implementing  digital  tools.  It  lays 
down  only  minimum  procedural  principles  and  coordination  mechanisms.  Similarly,  the 

7 

 
 
 
 
adoption of EU-wide product labels and procurement criteria remains voluntary or limited 
to specific sectors, giving national authorities the freedom to adapt. 

(d)  Does  the  initiative  create  financial  or  administrative  cost  for  the  Union,  national 
governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The impact assessment found that the initiative’s costs for Member States and companies 
may be high in the short run. However, in the long run, they are expected to be modest and 
outweighed by time savings, reduced duplication, and improved certainty. Additionally, the 
initiative is expected to increase the EU’s security of supply and overall economic security, 
including  by  supporting  job  creation  and  decarbonisation  investments. Digitalisation  and 
simplification of permitting are expected to reduce average project-approval times. Existing 
data under the EU emissions trading system and the carbon border adjustment mechanism 
are reused for the label on greenhouse gases intensity, avoiding new reporting obligations. 
For  the  Commission,  implementation  costs  are  limited  to  coordination,  guidance, 
enforcement and IT support functions. 

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

Yes. The proposal accommodates differences in administrative structure, legal tradition and 
regional competences by allowing Member States to tailor implementation within common 
parameters.  Territorial  impact  analysis  confirms  that  the  measures  will  benefit  regions 
hosting  energy-intensive 
investment  while  respecting 
industries  by  accelerating 
environmental safeguards and national permitting laws.  

8