The European Commission revealed its "Made in EU" proposals on Wednesday that aim to set minimum requirements for public procurement that would incentivize European manufacturing in key sectors.

The recommendations are part of the Industrial Accelerator Act (IAA) that would also set requirements for low-carbon procurement.

The IAA still needs to be discussed by member states and the European Parliament before it can be voted into law. As with many EU proposals, different members of the bloc have taken varying stances on the "Made in EU" proposals.

How would 'Made in EU' work?

• The IAA covers several key sectors, including steel, cement, aluminum, cars and innovative technologies, such as batteries, solar, wind and nuclear
• The new rules would set a minimum requirement for projects using public funds
• For example, aluminum sector projects would require 25% of the aluminum to be produced in the EU and with low-carbon technologies
• For cement, the equivalent rate would be 5%
• "Made in EU" can also include non-EU countries that have a free-trade agreement with the bloc or are signatories to the Government Procurement Agreement with the World Trade Organization (WTO)
• Investors would need to make sure at least 50% of their staff are EU workers with foreign ownership limited to 49%
• It also limits foreign direct investment in strategic sectors to €100 million ($116 million) where a third country controls over 40% of global manufacturing capacity

The third country referred to in that last point would almost always be China.

Why does Europe want to boost EU-sourced procurement?

The aim of the IAA is to grow the European manufacturing sector from 14% to 20% by 2035.

It also aims to save jobs in those sectors, with 200,000 industrial jobs lost in the past 15 months, according to EU figures.

The act aims to stem the potential loss of some 600,000 jobs in the automotive sector and create around 150,000 new jobs in other sectors.

But the main aim is to take steps to reach its environmental goals by pushing low-carbon technologies while at the same time cutting reliance on cheap Chinese imports.

China provided 98% of the solar panels imported into the EU in 2023, and 29% of the wind turbines.

What did the European Commission say about the 'Made in EU' proposals?

European Commission Vice President Stephane Sejourne said the aim of the proposals was "to boost demand and guarantee resilient supply chains in strategic sectors" despite "unprecedented global uncertainty and unfair competition."

"It will create jobs by directing taxpayers' money to European production, decreasing our dependencies and enhancing our economic security and sovereignty," he added.

"If we do nothing, then it's quite clear that very soon, 100% of clean tech technology will be produced in China... It's quite possible that our ​cement, steel industries will be offshored completely in the next few years," Sejourne warned.

Edited by: Dmytro Hubenko