Made in EU Rules: What They Mean for Asian Suppliers

“Made in EU” rules are moving from campaign slogan to draft law. The European Commission’s Industrial Accelerator Act, tabled on 4 March 2026, would require a share of the steel, aluminium, batteries, solar components and vehicles bought with public money in the EU to be low-carbon and, in several cases, of EU origin 1. For Asian suppliers, and the European buyers who depend on them, the proposal is not yet binding law, but it already signals where public procurement, net-zero auctions and subsidy conditions are heading, and where supply chain risk is building well before any vote.

What the Industrial Accelerator Act actually proposes

The Act, formally COM(2026)100, sets minimum shares of “Union origin” and “low-carbon” content across three groups of measures: public procurement under the EU procurement directives, auctions for net-zero technologies, and public support schemes such as grants and demand-stimulation programmes 2. The proposed thresholds vary by product:

Product	Proposed threshold
Steel (construction, infrastructure, vehicles)	At least 25% low-carbon; no origin requirement
Aluminium (same sectors)	At least 25%, and it must be both low-carbon and of EU origin
Concrete and mortar	At least 5% of EU origin
Vehicles	Assembled in the EU; at least 70% EU-origin components excluding batteries; three main battery components and battery cells of EU origin
Solar cells and inverters	To be incorporated within three years of the Act entering into force

Member states would have to apply these rules to public support schemes covering at least 45% of the national budget allocated to steel, aluminium and concrete-related support, and to effectively all automotive support conditioned on the vehicle thresholds 3. The 70% EU-content figure for vehicles, and the split battery-component requirement, were confirmed in the Commission’s own drafting and industry analysis of the text 4.

How “Union origin” would be defined and verified

The Commission proposes to define origin using existing EU customs rules of origin, with one carve-out that matters more than the headline thresholds: products from countries with a free trade agreement, a customs union with the EU, or membership of the WTO Agreement on Government Procurement would count as EU-origin, unless the Commission later withdraws that treatment 5. That single clause does much of the work in deciding which Asian suppliers are exposed. Trade partners with an EU free trade agreement have a route to qualify; China, which has no comprehensive EU free trade agreement, does not currently have that route 5.

The proposal also introduces foreign direct investment screening for strategic sectors, with conditions reported to include ownership caps around 49% and EU workforce requirements for investors from outside qualifying trade partners seeking to build capacity inside the EU 5.

Still a proposal, not a law

It is easy to read “Made in EU” headlines as settled policy. They are not. The Parliament appointed rapporteurs across its Industry (ITRE), Internal Market (IMCO) and Trade (INTA) committees on 29 April 2026, and as of the most recent legislative-train update the file sits at “tabled” status, with a joint committee report still to be prepared before Parliament agrees a first-reading position 6. The Council has not finalised its own negotiating mandate either. Both institutions must agree a common text with the Commission, typically through trilogue negotiations, before any of these thresholds become binding, and reporting in late September 2026 described the process, and its trade implications for partners including the UK, as still live and contested 7.

Why Asian suppliers are watching closely

China’s Ministry of Commerce formally objected to the proposal on 25 April 2026, calling the EU-origin preference in procurement “institutional discrimination” against foreign investment, warning of possible inconsistency with WTO principles, and signalling countermeasures if the EU does not adjust course 8. That reaction reflects how much is at stake. China supplies more than 80% of global battery manufacturing capacity, and industry analysts note the Act’s current thresholds focus on downstream assembly rather than the upstream cell and material production where Chinese suppliers are most dominant, meaning the rules could reshape where products are assembled in Europe without quickly loosening reliance on Chinese-origin inputs further up the chain 9.

For suppliers in Vietnam, India, Taiwan and elsewhere in Asia without a qualifying EU trade agreement, the practical question today is less about an immediate compliance burden and more about how their European customers’ sourcing criteria may shift as the file moves through Parliament and Council, and how early they can start building the low-carbon and origin evidence those customers will eventually ask for.

How this fits alongside CBAM and other EU levers

The Industrial Accelerator Act does not stand alone. Asian steel and aluminium exporters are already navigating the Carbon Border Adjustment Mechanism’s embedded-emissions reporting, and the verification habits built for CBAM, mill-level emissions data, consistent methodology, third-party checks, are a reasonable starting point for the low-carbon evidence the Act would eventually require too, even though the two instruments serve different purposes and cover different products (see our guide to CBAM data for Asian suppliers and how India is building CBAM verification capacity). Buyers who already have Scope 3 supplier data programmes in place are better placed to adapt if and when Made in EU thresholds are finalised.

What buyers and suppliers should do now

None of this requires an immediate compliance programme. The earliest thresholds would not bind before the Act enters into force, and the solar-specific measures carry a three-year transition 10. But procurement teams sourcing steel, aluminium, batteries, solar components or vehicle parts from Asia have practical reasons to start now.

Map exposure first: identify which contracts touch EU public procurement, net-zero auctions or subsidy-linked sales, since this draft applies the rules to public money rather than private commercial contracts. Then separate “low-carbon” evidence from “EU origin” evidence, since some thresholds, such as steel, require only a carbon claim, while others, such as aluminium and vehicle batteries, require both a carbon claim and a customs-origin claim, which need different documentation and different suppliers to produce. Start collecting plant-level embedded-emissions data now rather than waiting for a final text, since the verification burden looks likely to resemble CBAM-style reporting whatever the final thresholds turn out to be. Track the free-trade-agreement question closely, because a supplier’s home country and its trade relationship with the EU may end up mattering as much as its actual carbon performance. And watch the legislative timetable rather than the headlines: the joint committee report, Parliament’s first-reading position and the Council’s negotiating mandate are the events that will actually change the thresholds, not statements from either side of the debate.

The trade-off Brussels is negotiating

The Act sits at the intersection of two EU objectives that pull in different directions: building domestic manufacturing capacity in steel, batteries, solar and vehicles, and keeping the cost of the energy transition manageable for European buyers who currently depend on competitively priced Asian supply. Industry bodies including Energy Storage Europe have asked for a gradual phase-in precisely because European capacity cannot yet replace Asian supply at scale 9. How that trade-off is resolved in the final text, through phased thresholds, broader free-trade-agreement carve-outs, or a narrower sector scope, will determine how much of today’s risk for Asian suppliers actually materialises.

For now, the direction of travel is clearer than the destination: EU public money is moving towards low-carbon, and increasingly EU-origin, inputs. Suppliers and buyers who start building the evidence base early will have more options once the rules are finalised than those who wait for the vote. If you want help mapping which of your supply contracts and data gaps this proposal would actually touch, talk to our team.