With the Industrial Accelerator Act of March 2026, the EU aims to increase manufacturing's share of GDP to 20% by 2035. The goal is to reduce foreign dependencies and streamline high-tech production, using the green transition as a strategic lever.
The most important EU economic story in May 2026 is the Union’s accelerating attempt to reconnect energy policy, industrial policy, and high-tech competitiveness into one strategic package. At the center of that effort is the Industrial Accelerator Act, proposed by the Commission on 4 March 2026, which aims to strengthen EU manufacturing and push the share of manufacturing in EU GDP from 14.3 percent in 2024 toward 20 percent by 2035.
That target is ambitious, but it is also revealing. Brussels clearly understands that Europe cannot remain competitive if it stays dependent on imported industrial capacity in sectors that now define power in the global economy.
The logic of the proposal is straightforward. The EU wants to make it easier, faster, and more attractive to build strategically important industrial capacity inside Europe, especially in energy-intensive industries, net-zero technologies, and automotive production. The Act introduces “Made in EU” and low-carbon preferences in public procurement and public support, along with simplified permitting and new industrial acceleration areas.
This marks an important shift. The Commission is no longer treating industrial policy as a side effect of environmental policy. Instead, it is trying to use the green transition to rebuild Europe’s productive base.
The energy transition as an industrial challenge
The energy transition is no longer only an environmental issue. It is now at the core of Europe’s industrial competitiveness. Solar panels, batteries, wind equipment, electric vehicles, and critical raw materials have become strategic sectors because they determine whether Europe can electrify its economy without handing the value chain to external suppliers. The Industrial Accelerator Act reflects this reality by linking local industrial production, decarbonization, and public support. In effect, the EU is saying that the clean economy must also be a European economy, otherwise it will not be resilient enough to sustain long-term political and economic stability.
A particularly important feature of the proposal is its treatment of foreign investment. The Commission wants additional scrutiny for investments in strategically sensitive sectors such as batteries, solar PV, electric vehicles, and critical raw materials, especially when investors from third countries control a significant share of global manufacturing capacity.
This represents a major political shift, showing that the EU is becoming more selective about who will help shape Europe’s industrial future. Europe still wants investment, but increasingly it wants capital that transfers know-how, strengthens local industrial capacity, and supports strategic autonomy.
Industry 4.0, cybersecurity, and critical infrastructure
The digital dimension of this industrial reset is equally important.
The Act introduces cybersecurity prequalification criteria for certain net-zero technology auctions and cybersecurity requirements for some procurement procedures. This is a clear signal that Industry 4.0 is not only about machines, robotics, and sensors, but also about software, network security, supply-chain integrity, and control of critical infrastructure.
As industrial systems become increasingly interconnected, the line between industrial policy and cybersecurity continues to fade. Europe can no longer separate its manufacturing strategy from its digital security strategy because the two are now structurally linked. The same logic also appears in the EU’s growing concern about the environmental footprint of digitalization. Recent European Environment Agency analysis highlights that AI and digital technologies can support the green transition, while at the same time increasing electricity consumption, water demand, and pressure on raw materials through data centres, networks, and devices.
This is the core paradox of the fourth industrial revolution. The very technologies designed to make the economy smarter and more efficient also consume significant physical resources. Europe must therefore manage digital growth as part of its broader energy strategy.
Between industrial protection and market openness
This is where the EU’s industrial and energy agenda becomes politically delicate.
Brussels wants faster permitting, stronger domestic manufacturing capacity, greener production, and more secure supply chains all at once. The ambition is understandable, but it is not without risks.
If the framework becomes too rigid, it could discourage investment and slow innovation. If it becomes too permissive, Europe risks ending up with a weaker industrial base and continued dependence on external suppliers for batteries, solar technologies, and strategic components of the digital economy.
The real challenge will therefore be finding the right balance between industrial protection and market openness.
A new geopolitical phase for European industry
Behind the Industrial Accelerator Act lies a broader geopolitical transformation.
The EU is reacting to a global context in which industrial capacity has once again become a source of power, while both the United States and China actively use strategic public policies to shape production, technology, and supply chains. The old assumption that open markets alone could guarantee competitiveness no longer appears sustainable. The Industrial Accelerator Act is therefore a direct response to this shift: a recognition that industrial sovereignty, energy resilience, and technological capability are now deeply interconnected.
Europe is no longer simply trying to decarbonize its economy. It is attempting to reindustrialize through decarbonization. If this strategy succeeds, the EU will strengthen not only emissions reduction, but also its industrial independence, digital capacity, and economic security. If it fails, Europe may achieve cleaner goals while losing leverage in the global economy.
Smart cities, infrastructure, and urban transformation
The same dynamics are also reshaping the future of European cities. Energy, digitalization, data governance, cybersecurity, and smart infrastructure are increasingly becoming central elements of urban and territorial strategies.
These themes will also be at the center of
Perspective 2026, the event taking place from May 26 to 28 in Rome, dedicated to urban innovation, digital transformation, and the future challenges facing cities.