Europe’s “Buy European” Turn: Industrial policy makes a comeback, with climate at its core

In early March 2026, European Commission Executive Vice-President Stéphane Séjourné unveiled the long-awaited Industrial Accelerator Act (IAA), a cornerstone of the EU’s renewed industrial strategy. Presented as a competitiveness tool, the proposal in fact sits at the crossroads of industrial policy, economic sovereignty and climate transition – reflecting a profound shift in Brussels’ economic doctrine.

A context of urgency: deindustrialization and global competition

The IAA emerges against a backdrop of mounting concern over Europe’s industrial decline. The EU has been losing manufacturing capacity and jobs, while facing intensifying competition from China and the United States – both of which deploy assertive industrial policies such as “Made in China” and “Buy American.”

At the same time, the green transition is reshaping global value chains. Clean technologies – from electric vehicles to low-carbon steel – are becoming strategic sectors, raising the stakes for industrial policy. For Brussels, the challenge is twofold: decarbonise industry while preventing further economic dependency on external actors.

It is in this context that Commissioner for Industrial Strategy Stéphane Séjourné has championed a “Made in Europe” approach, aiming to rebuild industrial capacity and secure Europe’s economic sovereignty. Indeed, he explained that “This is not an operational change but a change in doctrine, which would have been unthinkable just a few months ago. What is currently happening, notably in Iran, shows us this a little more every day: we must strengthen our strategic sectors. Because without a strong industrial base, there is no European social model, no climate transition, and no strategic autonomy”.

What is the Industrial Accelerator Act?

Officially, the IAA is designed to boost Europe’s industrial base, stimulate investment, and accelerate the deployment of clean technologies. At its core, the proposal introduces a set of measures that collectively mark a significant departure from the EU’s traditionally open-market approach:

• “Made in Europe” criteria: Public procurement and subsidies would prioritise European-made and low-carbon products in strategic sectors such as steel, cement, automotive and clean tech.
• Conditions on foreign investment: Non-EU companies investing in key sectors may be required to create local jobs, transfer value, or meet sustainability criteria.
• Simplification and acceleration: A streamlined permitting system and priority industrial zones aim to speed up project deployment across the EU.
• Strategic autonomy objectives: The broader goal is to reduce dependencies on external suppliers and strengthen resilience in critical value chains.

The European Commission’s ambition is clear: increase the share of industry in EU GDP to around 20% by 2035, reversing decades of decline.

Next steps: a long legislative road ahead

Commissioner Stéphane Séjourné recently stressed that the proposal’s presentation is only the first step, as it must now undergo review and adoption by the European Parliament and the Council, a process likely to take between nine and eighteen months. Negotiations are likely to be complex and politically sensitive, given the breadth of the proposal and its economic implications.

Early delays in the proposal’s release already highlighted internal disagreements within the Commission, particularly around the scope of “Made in Europe” provisions.

Indeed, far from being a consensual initiative, the IAA has exposed deep ideological divides within the European Union.

The proposal is already exposing sharp political divides across Europe. France, as driving force behind the initiative, supported notably by Italy, Spain, and parts of the European Parliament, sees the Act as a necessary response to unfair global competition – and a prerequisite for achieving climate neutrality. For its proponents, industrial and climate policies are now inseparable: a resilient green transition requires Europe to produce clean technologies at home.

On the other hand, a more cautious bloc is pushing back. Germany, alongside several Member States including Sweden and the Czech Republic, has raised concerns about a potential drift toward protectionism. Their fears centre on higher costs, strained trade relations, and further fragmentation of global supply chains.

Even among supporters, enthusiasm remains tempered. In France, Industry Minister Sébastien Martin has welcomed the push for a European preference in strategic sectors, a long-standing national priority, describing it as a major step forward, while calling for further ambition. Business stakeholders are more cautious. MEDEF, France’s main employers’ federation, is advocating for a “targeted” and “pragmatic” approach, warning that “Made in Europe” requirements could increase costs and administrative complexity, particularly for SMEs and in sectors such as public procurement and automotive. Indeed, some actors in the automotive sector have warned of a potential “guillotine effect.”

Furthermore, the definition of “Union origin” is set to become a major fault line in negotiations. France is pushing for a strict “Made in EU” standard to channel public funds into European industry and jobs, while Germany favors a more flexible approach that includes trusted third countries to safeguard supply chains. Third countries have also voiced concerns or sought inclusion within the definition of “European” value chains, notably Switzerland and the UK.

A Turning Point for Europe’s Industrial Strategy

The Industrial Accelerator Act proposal indeed raises fundamental questions about the EU’s economic identity: should Europe remain an open market, or embrace a more interventionist, sovereignty-driven model?

It may well mark a turning point: not just for European industry, but for how the EU reconciles competitiveness, sovereignty and climate ambition in an increasingly fragmented global economy.