EU's Industrial Accelerator Act sparks investment screening battle

The European Commission's Industrial Accelerator Act (IAA) represents a major shift in EU economic policy by introducing new foreign investment screening alongside existing regulations for batteries, electric vehicles, solar technology, and critical raw materials. The proposal targets investments above 100 million euros in sectors where a single third country controls more than 40% of global manufacturing capacity, effectively targeting Chinese investors while requiring commitments on equity stakes, joint ventures, intellectual property licensing, R&D spending, workforce location, and EU supply sourcing.

This regulatory framework has triggered sharply divided responses: some businesses and Member States warn it risks trade retaliation and capital flight, while others argue for even stricter rules including mandatory EU-majority joint ventures to retain technology and manufacturing value. Parliamentary committees, the Council Presidency, and German liberal lawmakers have proposed competing amendments that either expand or roll back the regime's scope, leaving the final text uncertain.

The trilogue negotiations scheduled to conclude by December 2026 will determine whether the IAA becomes a targeted instrument for specific high-value deals or the foundation for broader industrial conditionality across European strategic sectors.