The European Commission has proposed a 'Buy EU' plan aimed at bolstering domestic low-carbon industries and helping the continent compete against China. The commission published a draft regulation, called the Industrial Accelerator Act, on Wednesday, setting demands for EU-made and low-carbon content in public spending.
Key Takeaways
The European Commission has proposed a 'Buy EU' plan to boost domestic low-carbon industries and compete against China. The Industrial Accelerator Act sets demands for EU-made content in public spending, aiming to increase manufacturing's share of Europe's GDP to 20% by 2035.
- European Commission proposes 'Buy EU' plan to enhance domestic low-carbon industries
- Industrial Accelerator Act mandates EU-made and low-carbon content in public spending
- Plan aims to increase manufacturing's share of Europe's GDP to 20% by 2035
- UK, Japan, and Turkey could be included if they meet reciprocal market access criteria
- The plan seeks to create and preserve 150,000 jobs in clean tech and low-carbon sectors
This marks a significant shift in economic thinking from Brussels, which has long been a proponent of open markets. However, after internal disputes, EU officials left the door open to including countries with close economic ties to the bloc, such as the UK, if there is reciprocal market access.
Stéphane Séjourné, the European Commission vice-president in charge of industry, described the act as 'a change in doctrine' that would have been 'unthinkable even just a few months ago.' He emphasized the need for a strong industrial base to ensure Europe's climate transition and strategic autonomy.
The plan is inspired by French government ideas and is a response to intense competition from Beijing, which has led to Europe losing its once-thriving solar panel industry. The proposal aims to reverse Europe’s industrial decline by setting a target for manufacturing to represent 20% of Europe's GDP by 2035, up from 14.3% in 2024.
Local and national authorities would be required to meet 'Made in the EU' content targets when spending public money or designing subsidy programs for goods in strategic sectors like green tech and cars. For instance, at least 70% of components of electric cars—excluding the battery—would need to be made in the EU.
Foreign firms investing in the EU in important sectors will also have to guarantee job creation within the bloc. The commission believes the plan could create and preserve 150,000 jobs in clean tech and low-carbon sectors.
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