COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 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

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   EUROPEAN COMMISSION  Brussels, 4.3.2026  SWD(2026) 72 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  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) 70 final} - {SWD(2026) 71 final}  
 
 
Executive Summary Sheet 

Impact assessment for the Industrial Accelerator Act 

A. Need for action 

Why? What is the problem being addressed?  
The overarching problem this initiative aims to address is the need to strengthen the EU industry’s competitiveness 
and resilience in the context of increased global pressure, while accelerating the decarbonisation of its processes 
and products. It is fostered by three sub-problems: limited demand for European low-carbon industrial products, 
supply  chain  vulnerabilities  in  strategic  sectors  and  net-zero  technologies,  and  industrial  decarbonisation 
technologies not yet being deployed at scale.  
The EU manufacturing sector is the largest employer (18.7%) and value-added provider (24.1%). However, the 
EU industry is losing ground. Manufacturing as a share of EU GDP declined from 17% in 2000 to 14% in  2024. 
Low  investment  levels,  along  with  challenges  such  as  slow  economic  growth,  unfair  international  trade  and 
competition, the need for decarbonisation and technological competition, affect the competitiveness of EU industry 
and impact the business case for investing in European low-carbon technologies. The global market for net-zero 
technologies is projected to nearly triple by 2035. While their deployment in the EU is progressing, the EU’s global 
market share is declining, and domestic manufacturing capacity remains limited. Furthermore, economic security 
is a central pillar of EU industrial policy, with key technologies underpinning the green and digital transition, which 
are currently exposed to strategic dependencies and supply chain risks. Without a competitive and decarbonised 
industrial  base,  the  EU  will  not  achieve  the  objectives  of  the  Clean  Industrial  Deal  and  the  Economic  Security 
strategy.  

What is this initiative expected to achieve?  
The  general  objective  is  to  increase  resilient  and  decarbonised  industrial  production  in  the  EU  manufacturing 
industry,  with  a  special  attention  on  Energy  Intensive  Industries  (EIIs),  net-zero  technologies,  and  automotive 
industry in their contribution to Europe’s competitiveness, economic security, and sustainable economic  growth. 
The general objective is broken down into five specific objectives: 
(SO1) Facilitate differentiation for low-carbon industrial products to increase their value and marketability 
(SO2) Boost demand for European low-carbon products and net-zero tech 
(SO3) Maximise the quality and benefits of foreign investment in the EU 
(SO4) Speed-up and simplify permits for industrial decarbonisation 
(SO5) Increase investment projects in industrial acceleration areas 

What is the value added of action at the EU level? 
While  national  measures  may  address  parts  of  the  challenge,  they  risk  fragmenting  the  Single  Market  and 
undermining  collective  effectiveness.  Given  that  supply  chains  are  deeply  integrated  across  Member  States,  a 
coordinated EU-level approach is essential to promote resilience, industrial decarbonisation and a level playing 
field.  It  enables  economies  of  scale,  proposes  solutions  that  fit  the  scope  of  the  problem  and  helps  prevent 
inefficiencies and duplication.  

What legislative and non-legislative policy options have been considered? Is there a preferred choice 
or not? Why?  

B. Solutions 

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The policy options are organised in three main sets of policy measures (POs), with each measure corresponding 
to a specific objective (SOs).  

Policy option 1 (PO1) proposes, under (SO1), a carbon intensity label for energy-intensive sectors. SO2 aims to 
create lead markets, by introducing  low carbon requirements for  energy intensive materials (steel, cement and 
aluminium) used in selected downstream sectors (automotive and construction) in public procurement and support 
schemes. It also proposes introducing made in EU requirements for batteries, solar PVs and vehicle components 
in public procurement and support schemes. SO3 introduces guidance on voluntary conditions for foreign direct 
investments  in  the  battery  supply  chain.  To  streamline  permitting  (SO4),  the  option  proposes  a  unified  digital 
procedure for all permits, applicable to the entire manufacturing sector. SO5 recommends to Member States to 
facilitate public funding for priority projects in industrial areas. 

Policy Option 2 (PO2) builds upon the first option by broadening the scope and requirements. SO1 mandates a 
specific carbon  intensity label for steel, with detailed  rules that can later be expanded to include other  energy-
intensive materials. Regarding lead markets (SO2), low-carbon and made in EU requirements are introduced for 
steel, cement and aluminium used in selected downstream sectors (automotive and construction) in the context of 
public procurement and support schemes. Conditions for specific investments under SO3 are mandatory rather 
than voluntary. SO4 increases support for the permitting process by introducing additional measures dedicated to 
EIIs. Lastly, SO5 requires, instead of recommends, Member States to designate industrial areas. 

Policy Option 3 (PO3) further extends the previous two options. SO2 on lead markets  extends the low-carbon 
and  made  in  EU  requirements  for  the  steel,  cement  and  aluminium  used  in  the  selected  downstream  sectors, 
namely  the  automotive  and  construction  products  placed  on  the  market.  It  also  extends  the  made  in  EU 
requirements  for  batteries,  solar  PVs  and  vehicle  components  to  all  products  placed  on  the  market.  SO3  on 
permitting  introduces  dedicated  measures  for  industrial  areas.  SO5  requires  the  Commission  to  designate 
industrial areas according to selection criteria and give priority projects access to funds.  

Following the analysis of the impacts of each policy option, as well as their ability to meet the objectives and their 
interaction with existing and planned EU initiatives, the IA considers PO2 to be the preferred option. Overall, PO2 
achieves the objectives in the most effective and efficient manner (as the cost-benefit differences with PO1 are 
minimal)  and  contribute  to  administrative  and  process  efficiency.  For  the  quantified  elements,  PO2  incurs  net 
overall benefits, which are higher than PO3, but slightly lower than PO1 and the estimated costs are expected to 
be  offset  by  long-term  benefits  related  to  economic  security  and  resilience.    However,  part  of  the  impacts on 
downstream sectors and supply chains, positive and negative, could not be quantified due to lack of data. Overall, 
PO2 facilitates the business case and triggers investment decisions in the EU by streamlining permit procedures 
for  the  entire  manufacturing  sector,  boosting  demand  for  European  decarbonised  materials  and  net-zero  tech 
products in strategic value chains, and ensure an investment framework that supports value-added creation in the 
EU. Additionally, PO2 will more effectively mitigate risks of supply chain disruptions and import restrictions by third 
countries, essential  to  preserve the  economic security of the Union  which would  suffer  large losses from such 
systemic shocks. Predictability, access to inputs, and strong supply chains are crucial for the competitiveness and 
well-functioning of EU's industry. Other benefits include, but are not limited to, job creation and upstream growth 
in gross value added, leading to more economic and social stability overall. It offers the most balanced approach 
between effectiveness and efficiency, as well as coherence and proportionality. 

Who supports which option?   
An  open  public  consultation  and  several  targeted  ones  were  organised  to  gather  feedback  from  all  relevant 
stakeholders.  Overall,  industry  was  supportive  of  the  initiative  and  of  provisions  facilitating  the  permitting 
procedures  for  industrial  manufacturing  projects.  The  steel  sector  supports  a  label  but  debates  some  of  its 
parameters and the design of the classification system. Steel, cement and aluminium sectors, solar, batteries, and 
vehicle component manufacturers stand to benefit directly from the IAA and were supportive of the made in EU 
and low carbon content requirements to support the creation of European lead markets for low-carbon industrial 
products and net-zero tech. However, some other EIIs may have diverging views regarding the introduction of low-
carbon  and  made  in  EU  requirements.  On  the  other  hand,  public  authorities'  views  were  split,  particularly 
concerning  permitting  provisions  covered  under  PO2  and  PO3,  notably  for  lead  market  provisions,  as  it  would 
increase their administrative burden. 

C. Impacts of the preferred option 

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What are the benefits of the preferred option (if any, otherwise main ones)?                                
PO2 is expected to bring economic benefits for the targeted EIIs and net-zero tech sectors, as it will create demand 
for European low carbon industrial products and batteries, solar PVs and vehicle components. For example, an 
increase in GVA of approximately EUR 445 million is expected for the cement industry and EUR 241 million for 
the steel and aluminium sectors in 2030. Furthermore, the entire EV automotive value chain, including intermediate 
inputs, is projected to see an increase in value added of around EUR 10.5 billion from entry into force of the vehicle 
component measures. Manufacturing industries will also benefit from time and costs savings from the e-permitting 
provisions, potentially reaching up to EUR 240 million cost savings for the digitalisation of permitting procedures. 
Benefits  for  industry  will  include  employment  opportunities.  For  example,  it  is  estimated  that  introducing  lead 
market provisions will generate and maintain 148 352 jobs in 2030. Lastly, the IAA will contribute to the EU climate 
targets by accelerating decarbonisation projects, leading to estimated GHG emissions reduction of 30,58 Mtonnes 
CO2eq for PO2 in 2030 only, equivalent to roughly EUR   3 058 million in savings. 

What are the costs of the preferred option (if any, otherwise main ones)?                                   
The downstream sectors will experience higher production costs due to lead market conditionalities. Adjustment 
costs for automotive OEMs from low-carbon and made in EU requirements could result in a EUR 291 million GVA 
loss while the construction sector could see a EUR  691 million GVA loss.  For example, a vehicle's price might 
increase by 0.225% (EUR 69.27) due to low carbon steel and aluminium provisions, and a passenger EV car by 
2.2%EUR 630 due to Made in EU batteries requirements in 2030. The construction cost of a building is expected 
to  rise  by  0.45%  from  the  use  of  low  carbon  products  such  as  steel,  aluminium  and  cement.    Made  in  EU 
requirements for solar PV and batteries will also lead to cost increases for all consumers, estimated at EUR 685 
million  for  solar  PVs  and  EUR      2  338  million  for  BESS/EVs.  Public  procurement  and  subsidies  could  cover  a 
significant portion, reducing the cost impact on citizens. Businesses will face recurring administrative costs, mainly 
for compliance with lead market provisions, totalling around EUR 1.2 million for PO2, potentially offset by permitting 
digitalisation  savings.  These  additional  costs  will  decline  in  the  midterm,  as  production  costs  lower  due  to 
economies of scale and cost parity with carbon intensive products is reached.  

How will businesses, SMEs and micro-enterprises be affected?  
Businesses of all sizes in the targeted industries will gain from an expanded market for low carbon products and 
benefit  from  cost  and  time  savings  associated  with  a  faster  and  simplified  permitting  process.  Industry 
consultations  revealed  that  SMEs  face  bigger  challenges  in  permitting  due  to  limited  administrative  resource. 
However, businesses in the downstream sector, such as automotive and construction, could incur additional costs 
(see above costs of the preferred option) related to low carbon and/or EU content requirement, including increased 
material  costs.  These  increased  costs  for  downstream  sectors,  however  minimal,  will  be  felt  more  strongly  by 
SMEs.  
More concretely, the lead market measures are likely to increase administrative costs to demonstrate compliance 
reporting, whenever mitigation measures envisaged for the proposal are not enough. 

Will there be significant impacts on national budgets and administrations?  
Public administrations are expected to incur higher costs in public procurement and support schemes, along with 
additional  administrative  expenses  for  monitoring,  reporting,  and  compliance.  Annual  administrative  costs  may 
increase by up to 8.92 million EU-wide, though these are anticipated to be offset by permitting-related savings. 
Public procurement costs are projected to rise in all Member States, due to the impact of content requirements. 

Will there be other significant impacts?  

The Industrial Accelerator Act is expected to enhance the competitiveness of EU EIIs, solar, batteries and vehicle 
components manufacturing industries by securing demand for their products, as well as EU’s economic security 
and  resilience.  International  trade  flows  would  be  affected,  lowering  dependencies  and  favouring  foreign 
investments in the EU with higher value-added creation. Potential negative reactions from some trading partners 
could result in competitiveness challenges for EU industry on global markets.  

When will the policy be reviewed?  

D. Follow up 

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An evaluation should be carried out three years after entry into force, with an explicit review clause applying five 
years after entry force.  

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