EU’s Industrial Accelerator Act faces criticism over lack of localisation and enforceability measures

A draft of the European Union’s Industrial Accelerator Act (IAA) risks falling short of its potential to create sustainable demand for low‑carbon steel and other decarbonised materials unless it is strengthened with clearer rules and targeted financing, analysts and industry groups warn.

A policy proposal currently under discussion would oblige public procurement and certain support schemes to source a minimum share of low‑emission materials from 2029, but the measure lacks a requirement that the steel be manufactured within the EU. According to a statement from Eurofer, the European steel industry association, omitting a “Made in Europe” condition could channel public support and demand toward producers outside the bloc, undermining domestic decarbonisation investments.

Industry associations and national producers have echoed that concern. Federacciai, the Italian steel producers’ body, described the draft as a missed chance to shore up the competitiveness of European steelmakers, noting that similar localisation criteria exist in the IAA for aluminium and cement but not for steel. A comment published by MEPs International warned that the absence of a domestic‑production stipulation may blunt the Act’s capacity to stimulate capital flows into low‑carbon steel projects across Europe.

Think‑tank analysis suggests the proposal’s current design could dilute its market‑creating intent unless it is tightened. The German climate institute that reviewed the Act argued the measure needs stronger performance standards and earmarked financial support to ensure public procurement actually translates into industrial‑scale investments in breakthrough production technologies such as electrolysis‑based ironmaking or hydrogen‑enabled blast furnaces.

Civil society organisations also call for firmer safeguards. The European Environmental Bureau and several NGOs criticised the draft for failing to define what qualifies as “low‑carbon” production and for lacking binding timelines to phase out fossil‑fuel‑dependent processes. They urged the Commission to include stricter definitions, enforceable decarbonisation pathways and limitations on fossil‑fuel technologies to avoid lock‑in effects and ensure environmental integrity.

Observers point to another missing instrument that could help steer demand: a harmonised low‑carbon steel label. Agora Energiewende and Agora Industry welcomed the IAA’s ambition to boost demand for cleaner materials but noted that the label promised under the Clean Industrial Deal has yet to materialise. They argue a credible, EU‑level certification would give procurement officers and private buyers clarity on product claims and support market differentiation for genuinely low‑emission steel.

Policymakers face trade‑offs between openness and industrial strategy. Supporters of the current draft frame minimal trade restrictions as consistent with single‑market principles and WTO rules, but industry voices counter that without mechanisms to prioritise European production public funds may do little to accelerate on‑shore decarbonisation. The German think tank recommended that the Commission introduce tighter standards and ring‑fenced funding streams to reduce the risk that public procurement simply reallocates demand to low‑cost producers overseas.

For business actors engaged in industrial decarbonisation, these gaps carry practical implications. Companies investing in pilot and commercial‑scale low‑carbon steel facilities require predictable demand signals and accessible public finance to bridge the cost premium of cleaner routes. According to industry commentary, a combination of robust product standards, a trusted labelling system and direct support instruments would create stronger, more reliable lead markets that could lower costs through scale and learning‑by‑doing.

As discussions proceed, stakeholders from industry, NGOs and national governments are pressing the Commission to amend the text. If the IAA is to catalyse the transition of heavy industry, experts say it must move beyond aspirational quotas and deliver concrete, enforceable measures that channel procurement and public funds toward decarbonised production within Europe while ensuring environmental credibility.