The European Union has in recent years faced three major challenges: declining industrial competitiveness, growing dependence on third countries, and the need to reduce greenhouse gas emissions. To address these problems, the European Commission put forward a new piece of legislation in 2026 – a proposal for the Industrial Accelerator Act (IAA). Although the regulation is presented primarily as an industrial policy and economic competitiveness measure, labelled the 'Made in Europe' regulation, its actual purpose is to accelerate the decarbonisation of European industry and create a stronger market for low-carbon-footprint products. For Estonian industrial companies and green technology developers, this regulation may bring both new opportunities and additional obligations. In this article, we look at the main principles of the IAA regulation and how they affect the market for low-carbon-footprint materials.
The Industrial Accelerator Act (IAA) is a new European Union regulatory framework aimed at strengthening the competitiveness of European industry, accelerating industrial decarbonisation, reducing the internal market's dependence on third countries, and creating a market for low-carbon-footprint products manufactured in Europe. The European Commission wants industry to account for at least 20% of the European Union's GDP by 2035, compared with today's level of about 14%. To achieve this goal, the focus is on strategic sectors that are important for both the economy and the green transition.
The IAA focuses only on sectors that play a major role in European industrial value chains and greenhouse gas emissions. This is therefore not a boost for industry regardless of specialisation, but a regulation aimed very precisely at energy-intensive industry. Estonia's lobby in Brussels does not deal with energy-intensive industry, and this has given good traction to the claim made by local lobbyists that any production with above-average energy consumption is energy-intensive. It is not. Energy-intensive industry is not every industry – it is limited to four very specific sectors. These are the production of steel, aluminium, cement, and chemicals. So in Estonia, the Industrial Accelerator Act mainly concerns the construction sector.
There is also another respect in which the Industrial Accelerator Act needs some explanatory groundwork in Estonia. Namely, one of the regulation's goals is also the development of green technologies. But here too it is very clearly defined that this refers to so-called net-zero technologies, namely batteries, heat pumps, electrolysers, wind and solar energy technologies, and components.
In the bigger picture of European industry, it is important that the Industrial Accelerator Act is also aimed at developing the automotive industry and the electric vehicle market. Although these sectors account for about 15% of European industry, their impact on the whole economy is very significant, since they supply many other industrial sectors.
One of the most important changes brought by the IAA concerns public procurement, and it is precisely in this context that it becomes clear why the regulation is also called the 'Made in Europe' regulation. In the European Union, public procurement accounts for about 15% of GDP, or more than €2 trillion a year, and the aim of the IAA is to use this purchasing power to strengthen European industry. In practice, this means that public procurement may in future give preference to products and components made in Europe, low-carbon-footprint materials, and technologies with European value chains. For example, companies should be prepared for the fact that some of the steel, aluminium, and concrete used in public projects will have to meet low-carbon requirements. Or that electric vehicles procured for the state must be assembled in the European Union. The legislator's hope is that this will create a new market for greener European industrial products.
Since the Draghi report, all EU legislation stemming from the Green Deal has also, as one part of it, supported changing economic logic. However, the issue at hand is not steering economic development onto a path of degrowth, but factoring environmental damage into the price of raw materials. The use of circular and greener materials is currently hindered by their higher price compared with primary, fossil-energy-based materials. Consequently, economic policy tools must be used to make primary resources more expensive than secondary (used) resources. Both the circular economy and industrial decarbonisation are aimed at this shift in the logic of economic development. The IAA addresses this problem on the demand side by creating a so-called lead market through public procurement, where some materials must meet low-carbon criteria. For example, through a requirement that at least 25% of the steel used in public projects must meet the low-carbon standard. Low-carbon-content requirements will also be set for aluminium and concrete. It is hoped that increasing demand in this way will give industry the confidence to invest in new technologies.
Another important part of the IAA is accelerating investment. Many industrial projects in Europe drag on for years because the permitting process is complex and fragmented. The aim here is to speed up the processing of permits needed for industrial projects by establishing a single point of contact, implementing digital processing, and shortening procedural deadlines. The hope is that this will accelerate the construction of new plants in Europe as well as investments in decarbonisation projects and green technology production. As a necessary tool, member states will be given the option to create so-called industrial acceleration zones – areas where the permitting process is faster, infrastructure is ready for industrial investment, and companies can cluster into industrial clusters.
The IAA also directly affects Estonian industrial companies, especially construction materials manufacturing and the construction sector as a whole, as well as green technology developers. The construction sector is one of the largest consumers of materials in Europe, and it is hoped that the IAA will increase demand for low-carbon-footprint concrete and steel as well as environmentally friendly construction materials. This means that manufacturers who can demonstrate the environmental impact of their products will gain a significant competitive advantage. Environmental Product Declarations (EPDs), product carbon footprint calculations, and life cycle assessment (LCA) analyses therefore become important. Without this evidence, it may become difficult to participate in international tenders in the future.
While the 'Made in Europe' principle protects European industry from competition from third countries, it simultaneously increases competition within Europe. Estonian companies are increasingly competing with manufacturers from Germany, Poland, and Scandinavia operating in the same markets. As a result, production efficiency, activities aimed at reducing environmental impact, and certificates and environmental data proving environmental sustainability are becoming ever more important.
How does Taasterahastu help companies prepare?
Taasterahastu OÜ helps companies prepare for new regulations and market requirements by offering support in the following areas:
- Preparing EPD Environmental Product Declarations
- Calculating product carbon footprints
- LCA analyses
- ESG and sustainability reports
- Green transition strategies for industrial companies
If you would like to assess the environmental impact of your products or prepare for future European tenders, please get in touch with us.