At the Competitiveness Council meeting on 28 May, EU industry ministers gathered in Brussels to discuss how the European Union can better strengthen its industrial competitiveness. The first item on the agenda was the Industrial Accelerator Act (IAA). For EPICO, the discussions at COMPET suggest that the negotiations are heading in the wrong direction, risking a missed opportunity to deliver a meaningful and credible transition for Europe’s industrial base.
The Industrial Accelerator Act (IAA) presented by the Commission on the 4 March 2026, is intended to reinforce Europe’s industrial base and help deliver the objective of increasing industry’s share of EU GDP to 20 per cent by 2035. It sets out a wide-ranging package of measures aimed at accelerating investment and scaling up production across the Union, including faster permitting procedures, incentives for demand for low-carbon and “Union-origin” products, and enhanced tools to monitor and manage foreign investment in strategic sectors.
Ireland, which will take over the rotating Presidency of the Council of the European Union on 1 July 2026, signalled its determination to steer a swift and efficient co-legislative process with a view to concluding the file by the end of the year. However, substantial work remains before co-legislators can reach agreement.
At this stage, several Member States have raised concerns regarding the administrative burden of the proposal, its extensive reliance on delegated acts and secondary legislation, and ongoing disagreements over the scope of the “Union-origin” provisions. Some also warn that the proposed low-carbon procurement approach may prove difficult to implement in practice and could risk creating unnecessary friction within the internal market.
Against this backdrop, EPICO is concerned that the push for rapid adoption of the IAA risks weakening its ability to deliver meaningful industrial decarbonisation and to create stable demand signals for low-carbon industrial materials over the long term.
Warning calls from COMPET: Europe Cannot afford the Wait
While the ministers were discussing the IAA, there was a shared recognition that Europe’s industrial model is under sustained and unprecedented pressure. Member States acknowledged the challenges of intensifying geopolitical competition from the United States and China, alongside the need to reinforce Europe’s industrial base while advancing decarbonisation in parallel. Although opinions were diverging on what needed to change in the proposal, the understanding that action is needed urgently was shared by everyone in the room to save European industry.
The drop in European industrial capacity is dramatic across several sectors. For the steel sector, EU crude steel output fell to a historic low of around 125.8 million tonnes in 2025, compared with 130 million tonnes in 2024 (EUROFER, 2026). Steelmaking capacity across Europe has been steadily shrinking over recent years (see Figure 1), while the remaining facilities are operating well below their potential. In 2024, capacity utilisation stood at just 67%, suffering from weak demand and increasing reliance on imports.
The aluminium sector tells a similar story. Europe continues to experience a steady decline in primary aluminium production, while becoming increasingly dependent on imports to meet domestic demand (European Aluminium, 2026). Several Member States warned during the COMPET discussion that Europe cannot afford to wait another three years for the IAA to take effect because, by then, there may be little industry left to 'accelerate'.
What stood out in the debate was the way ministers linked these industrial trends to their wider social and strategic implications. The decline of heavy industry is not only reflected in reduced production volumes. It also involves the gradual loss of skilled jobs, the weakening of innovation ecosystems, and the erosion of knowledge that Europe has built over decades. Once these foundations are lost, rebuilding them is significantly more difficult and costly.
Dropping low-carbon quotas will not secure Europe’s industrial future
While urgency was a recurring theme throughout the debate, with several ministers arguing that low-carbon quotas are an unnecessary or even harmful measure for safeguarding European industry, others emphasised an important reality: industrial decarbonisation cannot happen overnight. Transforming industrial production requires long investment cycles, regulatory stability and confidence that future markets will exist for low-carbon products. The central challenge for the IAA is therefore not a choice between speed and ambition, but how to combine urgent short-term action with credible long-term market certainty.
Without that balance, Europe risks achieving neither. Investors will hesitate, industries will delay transformation, and production will continue to move elsewhere.
This is why stronger and more predictable demand-side measures are essential. Progressive quotas for low-carbon materials in public procurement could provide some of the market certainty industry urgently needs. The current proposal, with relatively low and static quotas for steel, concrete and aluminium, does not yet send a sufficiently strong signal to support large-scale industrial investment.
Industry ministers came to Brussels with a clear sense of urgency to implement the IAA, and rightly so. But urgency alone is not a strategy if the response weakens the very tools needed to act. Simply removing or diluting low-carbon quotas and decarbonisation goals will not strengthen Europe’s competitiveness. What industry needs is certainty: clear, predictable market signals, a focused strategic scope, and a framework that convinces investors Europe is serious about building a strong, competitive clean industrial base.
A gradual but clearly defined increase in quotas over time would provide precisely the predictability that investors and manufacturers are seeking. More importantly, it would demonstrate that Europe is serious about creating long-term demand for low-carbon industrial products, aligned with its broader decarbonisation pathway.
Discussions on ‘Scope’: Defining What Is Truly Strategic
A recurring theme in the discussions was the call from several Member States to broaden the scope of the proposal. Many argued that the current definition of “strategic sectors” under the FDI framework is too narrow to reflect the realities of Europe’s industrial base and the scale of the transition ahead.
Particular emphasis was placed on the chemical sector, but also forging, wire manufacturing, rails, aviation and so on. Ministers stressed that industrial competitiveness depends not on isolated sectors, but on integrated value chains that underpin manufacturing capacity, technological capability and economic security.
This discussion also extended to the proposed Industrial Manufacturing Acceleration Areas (IMAAs), with several delegations calling for a wider range of industrial activities to be included in Annex I to qualify for strategic status. This designation matters, as activities covered would benefit from faster permitting, streamlined authorisation procedures and improved access to investment support.
There is a case for broader recognition. However, the talks at COMPET did not consistently reflect decarbonisation as a guiding principle for expansion. Strategic status should not become a catch-all category for industrial activity facing economic pressure. If the IAA is to retain coherence and credibility, the definition of strategic activities must remain anchored in Europe’s decarbonisation objectives. In practice, this means prioritising activities that support the clean industrial transition, strengthen low-carbon value chains, or enable the scale-up of net-zero technologies.
Expanding the scope should not become a route to extending support to highly carbon-intensive activities without clear transition value, such as coke production or refined petroleum, which are already included in the scope.
EPICO therefore supports a broader list of eligible strategic activities under the IMAA framework, but only where this clearly advances Europe’s long-term climate and industrial transformation goals. One notable gap is the limited recognition of recycling and secondary raw materials within the current proposal. Several Member States pointed to the need to strengthen industrial resilience and strategic autonomy through a more circular industrial model. Recycling is a clear no-regret option, supporting both competitiveness and decarbonisation at relatively low cost.
This omission is difficult to reconcile with the Steel and Metals Action Plan, which identifies circularity and recycled metals as central to Europe’s industrial future. Without inclusion under the IAA framework, recyclers risk being excluded from faster permitting, simplified authorisation and targeted investment support, despite their clear role in scaling domestic low-carbon supply chains.
Conclusion
Swift action is necessary, and EPICO supports the Ministers’ view that the IAA should be implemented swiftly. However, speed should not come at the expense of making the wrong choices. Weakening or diluting decarbonisation objectives to reach an agreement faster would not strengthen Europe’s industrial base and could harm long-term competitiveness. Even in a difficult and urgent situation, policy needs to remain focused on long-term outcomes rather than short-term fixes.
What industry needs is clear direction and stronger demand signals today so that investment flows into the industries that will secure Europe’s competitiveness over time.
More broadly, industry requires stable and predictable investment conditions, affordable and secure energy, and a framework that allows firms to modernise and improve efficiency. Short-term protection alone is not enough to build resilience. Long-term planning and consistent policy are essential.