A Quiet but defining moment for Europe’s industrial strategy
The European Commission is preparing legislation that, at first glance, might seem bureaucratic and niche: the Industrial Decarbonisation Accelerator Act (IDAA). But professionals in the industrial, energy, and policy spaces would be mistaken to underestimate its significance.
Expected in Q4 2025, the IDAA will be a part of a broader industrial reboot—embedded within the Clean Industrial Deal—that could rewire how Europe supports its energy-intensive industries (EIIs) amid a global realignment of manufacturing, trade, and climate policy.
The Act focuses on one thing: making industrial decarbonisation investable, scalable, and competitive. And it does so by removing the structural frictions that have kept emissions-heavy industries from evolving.
The problem isn’t technology—it’s the system
Many of the technologies to decarbonise Europe’s industrial base already exist: electric arc furnaces, hydrogen-based steelmaking, carbon capture, and clean process heat. What’s missing isn’t invention, but infrastructure, permitting, investor confidence—and demand.
As of now, energy-intensive sectors like steel, chemicals, and cement are caught in a structural trap. They face:
- Energy prices far above those in China or the U.S.
- Regulatory uncertainty and years-long permitting delays
- Weak market incentives for switching to low-carbon materials
- Global competitors who benefit from state subsidies and looser climate regulations
This dynamic doesn’t just threaten climate targets—it endangers Europe’s industrial competitiveness.
What the act intends to change
The IDAA is taking a pragmatic approach and addresses operational barriers across three main axes:
1. Accelerated permitting for clean industrial projects
Today, a large-scale decarbonisation project—like connecting a plant to a hydrogen network or installing CCS—can take 5–8 years to clear permitting hurdles. The IDAA proposes a single-market approach to fast-track approvals, building on lessons from the Renewable Energy Directive and the Net Zero Industry Act. Importantly, it aims to do this without lowering environmental safeguards.
What to watch: digitalisation of permitting, integration with energy infrastructure, and Member State coordination will determine success.
2. Priority project designation and cluster support
Not all decarbonisation projects are equal. Some, especially those in industrial clusters with shared infrastructure potential, offer greater economic and emissions returns. The Act would establish criteria to identify and support these high-impact projects. This includes financial de-risking, coordination with national strategies, and streamlined funding access.
What to watch: how the EU defines “strategic” projects, and whether support mechanisms move beyond grant funding to instruments like contracts for difference or project guarantees.
3. Building markets for clean products
Even when low-carbon materials are available, they struggle to find buyers. They’re often more expensive, and most procurement systems don’t reward lower emissions. The IDAA addresses this by:
- Proposing sustainability criteria in public procurement
- Introducing voluntary EU-wide carbon labels (starting with steel)
- Incentivising the use of clean feedstocks like captured carbon, recycled waste, or bio-based materials
- Considering trade-based protections for lead markets
What to watch: whether minimum EU content rules in procurement will survive WTO scrutiny, and how the voluntary label system interacts with existing private certification schemes.
What this means for industry leaders
If you’re running an industrial business in Europe, or advising one, this legislation matters. It could dramatically reshape the incentives landscape. Done well, the IDAA might finally make green industrial transformation an attractive investment—not just a regulatory obligation.
But the Act also raises questions that companies will need to answer early:
- Are we located in, or close to, a future industrial cluster?
- Do our projects qualify as strategic under the emerging EU taxonomy?
- Can we access the permitting reforms once enacted—or will national friction persist?
- Will carbon-labeled products offer pricing advantages in public markets?
Forward-leaning firms should begin mapping their exposure and alignment now, well before the final text is in place.
The geopolitical undercurrent
While the IDAA is framed as internal market reform, it’s also Europe’s response to external shocks: U.S. subsidies under the Inflation Reduction Act, China’s industrial dominance, and tightening supply chains for raw materials and clean tech components.
This is not just a green act—it’s a competitiveness act. It’s about ensuring that Europe’s industrial core survives the climate transition without being hollowed out or outsourced. And in this sense, the IDAA is as much about economic security as it is about emissions.
What comes next
The Commission has launched an open consultation and is gathering evidence via stakeholder dialogues, national roundtables, and industry feedback. An impact assessment will accompany the legislative proposal in 2025.
In parallel, related instruments—the updated Emissions Trading System, the Carbon Border Adjustment Mechanism, and the Net Zero Industry Act—are being operationalised. Expect convergence.
For leaders in policy, manufacturing, energy, and finance, now is the time to engage—before legislative momentum locks in design choices that may shape your sector for decades.
The Industrial Decarbonisation Accelerator Act may not make headlines like the Green Deal did. But for those who work in or around heavy industry, it’s a milestone. If it works, Europe could finally crack the code on marrying deep decarbonisation with industrial strength. If it stalls, the consequences will ripple well beyond the continent.
