> The policy could cost EU companies more than €10bn annually by pushing them to buy more expensive European components, according to officials familiar with a draft law due to be presented on December 10.
> The bloc’s French commissioner Stéphane Séjourné is overseeing the proposal, which marks a high point for years of French efforts to focus on domestic production as Europe’s ailing industry struggles to compete with cheap imports from Asia, particularly in clean technologies and some heavy industries.
> An EU official said that the scope of the legislation would mirror China’s key industrial policies “Made in China 2025” and “China Standards 2035”, which pushed foreign companies towards joint ventures with Chinese businesses in order to access its market. “What we are trying to propose is a delicate balance between a much needed protection of our industry and openness, which is dear to Europe’s DNA,” the person said.
> Previously sceptical countries such as Germany have indicated that because of the economic situation they would now look favourably on more buy-European rules, which are likely to affect the car industry and clean technologies, such as solar panels.
> Three EU officials said that local content thresholds of up to 70 per cent were being discussed as part of the industrial policy plan but that the targets would vary, depending on how critical the sector was and how heavy the dependency was.
> For cars, for example, government incentives would only be granted to vehicles that met the benchmarks. Batteries would also be required to have a certain level of European content, one official said.
> The measure would apply only to the use of public money, such as procurement contracts and state-backed loans and grants. There would also be an analysis of how much production capacity the EU had for each component, another official said.
> The law, which is called the Industrial Accelerator Act, could yet be changed or even delayed, according to officials involved in the talks, amid divisions in the European Commission over the clauses. The French commissioner ideally wants the definition of “European” to be limited to the EU, one official said.
> The commission’s powerful trade directorate is sceptical about local content thresholds, which are being pushed by Séjourné’s industrial policy department.
> World Trade Organization rules generally forbid favouring domestic producers, though there are exemptions for security related reasons.
> Solar panel inverters, which have shutdown mechanisms that could prove to be a security risk, may have to be mostly European made under the new rules. “That’s when you need more domestic content,” one EU official said.
> But some officials fear that products made in Europe could come with a significantly higher price tag than those imported from Asia, leading to even higher costs for companies.
> Since many imports are used to make finished goods in the EU such as cars, it could also price some products out of the market.
> High energy prices and the pressure of Donald Trump’s tariff regime have led to EU companies becoming increasingly reliant on cheaply produced Chinese products. In 2024 China was the largest exporter of technologies such as solar panels and biofuels to the EU and the second largest for wind turbines.
> European heavy industries, including steel, have also been struggling to maintain profit margins in the face of cheap Asian imports.
> The commission’s proposal is expected to include provisions to mandate public bodies to buy European and efforts to incentivise lead markets for clean technologies. Officials are discussing a voluntary “green steel” label to encourage manufacturers to buy more of the bloc’s lower carbon but more expensive steel production.
> One EU official said that the 70 per cent figure would probably be reduced and that talks over local content rules were difficult.
> The commission declined to comment on the proposal.
mono442•2mo ago
They have basically destroyed industry by strangling it with high energy prices and now they want to manufacture in Europe again.