EU Industrial Accelerator Act has serious flaws, says Bruegel

The European Union’s proposed Industrial Accelerator Act, intended to turbocharge the bloc’s clean manufacturing sector and counter competitive pressure from the United States and China, contains significant structural flaws that could render it ineffective — or worse, actively harmful to European industry. That’s the conclusion of a detailed analysis published by Bruegel, the Brussels-based economic think tank.

What the Act is trying to do

The proposal, part of the EU’s broader push to match the scale of America’s Inflation Reduction Act, aims to fast-track permits for strategic industrial projects, reduce administrative red tape, and channel state aid toward green manufacturing across member states. The Commission has pitched it as essential for keeping European industry competitive through the clean energy transition. On paper, the ambition is hard to argue with. But the details, analysts say, are where things get messy.

The core problems

Bruegel’s researchers identify several specific weaknesses. First, the Act’s definition of “strategic projects” is too broad and poorly bounded, potentially allowing member states to exploit the designation for industries that don’t genuinely serve EU-wide decarbonization goals. Second, the permitting acceleration mechanisms rely heavily on member state implementation, with no binding enforcement backstop. Countries that dragged their feet before the Act could easily continue doing so.

There’s also a subsidy coordination problem. The Act doesn’t adequately prevent a fragmented bidding war between member states, where larger, wealthier economies like Germany and France simply outspend smaller ones to attract industrial investment. That dynamic could deepen regional inequality within the EU rather than closing it.

One senior policy analyst familiar with the deliberations put it plainly: “The intent is right, but without stronger coordination rules, you risk recreating the exact race-to-the-bottom the Act was meant to prevent.”

What Bruegel says should change

The think tank’s recommendations are specific. They call for a narrower, more rigorous definition of eligible strategic projects, capped at sectors with clear links to the EU’s 2030 and 2050 climate targets. They also propose mandatory timelines for permit decisions — somewhere in the range of 12 to 18 months — with automatic approval mechanisms if deadlines are missed.

On subsidies, Bruegel argues for a centralized EU co-financing mechanism to level the playing field between rich and poor member states. Without that, the Act risks concentrating investment in a handful of wealthy countries while peripheral economies fall further behind.

What happens next

The Act is still moving through the legislative process, with negotiations between the European Parliament and member state governments expected to intensify over the coming months. That timeline gives reformers a genuine window to push for changes.

But political momentum inside the Commission appears strong, and there’s pressure to get something passed quickly. Whether lawmakers will slow down long enough to fix the structural problems remains an open question — and a consequential one for European industry’s long-term future.