Europe has unveiled its Industrial Accelerator Act (IAA) which aims to support European manufacturing and industry to decarbonise - while protecting companies from unfair competition from imports.
Highlighting the importance of the EU’s manufacturing sector, which is widely accepted as being in decline, the Commission said: “Despite its continued economic importance, [manufacturing’s] share of GDP has fallen over the past decades from 17.4% in 2000 to its current level of 14.3%. This regression is not only an economic reality, but a strategic warning signal with potentially structural impacts on the EU’s prosperity and social cohesion.”
The Commission added: “At the same time the manufacturing sector increasingly faces challenges such as high energy prices, global overcapacities, high capital and operational costs for decarbonisation and new technology deployment, low investment compared to other regions, as well as regulatory hurdles.”
There is particular concern around the energy intensive sectors, which includes chemical output, where production volumes have decreased substantially since 2021 compared with other manufacturing sectors. “Cost gaps with other world regions have widened and import shares have increased, in particular for basic metals and chemicals,” the Commission added. “Capacity utilisation rates remain at unsustainably low levels. Decarbonising these industries requires substantial investments; however, the pace of decarbonisation is not fast enough to reach the EU climate objectives.”
The Commission adds that the IAA will support existing EU policies and including the Clean Industrial Deal and the Net-Zero Industry Act. And in terms of upcoming initiatives the Circular Economy Act proposal will compliment the IAA by boosting recycling and access to secondary raw materials, reducing dependencies for energy intensive industrial products.
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