What the IAA is
On 4 March 2026 the European Commission published its proposal for an Industrial Accelerator Act (IAA), COM(2026) 100 final. The instrument is, at first glance, one more entry in the now-crowded catalogue of EU industrial-policy regulations that began with the Net-Zero Industry Act, the Critical Raw Materials Act, and the Chips Act. But the IAA is more ambitious in scope and more consequential in design.
Its stated aim, set out in Article 1, is to support “the development, competitiveness and resilience of the Union’s manufacturing sector,” with a headline target in Article 2: the manufacturing sector should reach 20% of EU GDP by 2035. To get there, the Regulation operates on six fronts, organised into six Chapters:
- Chapter I – general provisions, objectives, and definitions;
- Chapter II – enabling conditions for industrial production and decarbonisation (one-stop shops, single permit-granting procedures, an accelerated regime for the decarbonisation of energy-intensive industries);
- Chapter III – strengthening strategic value chains through EU-origin and low-carbon requirements in public procurement and aid schemes;
- Chapter IV – the foreign investment contribution regime;
- Chapter V – industrial manufacturing acceleration areas;
- Chapter VI – final provisions, including review clauses and delegated powers.
Most of these Chapters address Member States and the Commission. They are, in substance, organisational and policy obligations: designate an authority, set up a one-stop shop, designate an acceleration area, apply origin requirements. Chapter IV is the exception — and it is the part of the IAA that deserves the closest attention.
Chapter IV: “Foreign Investment Contribution”
The very title of Chapter IV is a statement of intent. The EU’s existing framework for foreign direct investment — Regulation (EU) 2019/452 — speaks of screening. National regimes, including Italy’s Golden Power, speak of special powers. Both are defensive: tools to filter, condition, or block. Chapter IV instead speaks of contribution. Foreign investment is not framed as a threat to be vetted, but as a resource to be channelled so that it adds industrial value to the Union.
The mechanics follow that logic.
Scope (Article 17). Chapter IV applies to foreign direct investments exceeding EUR 100 million in four emerging strategic manufacturing sectors: (a) battery technologies and the battery-storage value chain; (b) pure electric, hybrid, and fuel-cell vehicles, including electrification and digitalisation components; (c) solar PV technologies; and (d) the extraction, processing, and recycling of critical raw materials. A second condition narrows the field further: the regime bites only where more than 40% of global manufacturing capacity is held by the third country of which the investor is a national. Crucially, Article 17(1) contains a standstill clause: covered investments “shall not be implemented unless explicitly approved.”
The six conditions (Article 18). To be approved, an investment must satisfy at least four of six conditions — among them local manufacturing of components in the EU, technology transfer and IP localisation, R&D activity, workforce training, and supply-chain commitments. These are, in effect, positive value-added conditions: they measure what the investment brings to European industrial resilience.
The “shall approve” rule (Article 20(3)). This is the keystone. If the investor meets four of six conditions, the Investment Authority “shall approve the foreign direct investment.” Approval is a bound act, not a discretionary one. Demonstrated contribution produces a right to entry.
Institutions and enforcement (Articles 19, 22). A national Investment Authority — with the Commission in a coordinating and, in some cases, decisional role — administers the regime. Financial penalties, with a minimum threshold pegged to turnover, back up the obligations.
Read together, these provisions invert the default posture of investment control. The traditional question — “is there a reason to stop this investment?” — becomes “has the investor shown that this investment contributes?” If the answer is yes, the door must open.
A balanced word on coordination with national Golden Power regimes
For Member States that operate robust national screening systems — Italy’s Golden Power (Law Decree 21/2012, as amended) being a prominent example — Chapter IV raises a coordination question that deserves to be stated carefully, without alarmism in either direction.
The two regimes are built on different legal bases and protect different interests. The IAA rests on internal-market and common-commercial-policy competences (Articles 114 and 207 TFEU) and protects the economic security and industrial resilience of the Union as a whole. Golden Power rests on the Treaty’s public-policy and security exceptions and protects the national security and public order of the individual Member State. Importantly, the “economic security” the IAA pursues is Union-wide, not national: the six conditions of Article 18 measure an investment’s contribution to collective European industrial resilience, not the specific national-security risks a given Member State may identify. On paper, therefore, the two instruments occupy distinct planes and need not collide. An IAA approval certifies an industrial contribution at EU level; it does not, and cannot, certify the absence of a national-security risk.
In practice, however, the interface is more delicate, and this is where a measured assessment matters. The IAA’s “shall approve” rule is mandatory, and Chapter IV contains no express safeguard clause preserving national security powers — unlike Article 1(3) of Regulation 2019/452, which explicitly leaves Member States free to protect their essential security interests. The absence is most naturally read as a gap rather than a deliberate act of pre-emption, but it is a consequential gap. Where the same national government first approves an operation through its Investment Authority and then seeks to block it through Golden Power, three frictions can arise: an apparent internal inconsistency in the State’s own position on the same facts; a legitimate expectation on the investor’s side once the four-of-six threshold is met; and a practical shift in the burden of justification, since the State must now explain why national-security concerns exceed what the EU-level conditions already weighed.
The two regimes will increasingly operate on the same transactions, and that the smooth functioning of national security screening should not be left to inference. The cleanest fix is also the most modest: a Chapter IV safeguard clause modelled on Article 1(3) of Regulation 2019/452, confirming that an IAA approval is without prejudice to Member States’ special powers grounded in national-security and public-order interests that fall outside the Regulation’s industrial perimeter. Such a clause would cost the IAA nothing in terms of its industrial objectives, while removing a genuine source of legal uncertainty for investors and Member States alike.
The Industrial Accelerator Act is, in short, a step toward a more strategic European industrial policy. Its foreign-investment Chapter is its most innovative feature — and, precisely because it is innovative, the one where careful coordination with established national security tools will repay the effort.
