EU ‘Made in Europe’ Regulation Welcomed but ‘Will Not Remove Dependency on China’

Why It Matters

The IAA could reshape European supply chains and accelerate clean‑energy deployment, yet its limited impact on upstream battery imports may preserve China’s strategic advantage in the sector.

Key Takeaways

• IAA mandates domestic content for low‑carbon technologies.
• Energy storage firms welcome faster permitting, caution gradual rollout.
• Upstream battery materials likely remain China‑dominant beyond 2030.
• EU solar groups split on IAA’s limited component scope.

Pulse Analysis

The Industrial Accelerator Act reflects the EU’s broader push to secure strategic autonomy in critical industries. By tying public procurement and support schemes to a ‘Made in Europe’ criterion, the legislation seeks to create a reliable market for low‑carbon products, encouraging investors to fund new factories and upgrade existing plants. This approach mirrors similar policies in the United States and Japan, where domestic‑content rules have spurred the growth of local supply chains for renewable technologies.

For the energy‑storage market, the IAA’s accelerated permitting and designated “acceleration areas” could shorten project timelines and lower entry barriers for battery assemblers. However, experts warn that the act stops short of addressing the upstream bottlenecks that dominate the sector—raw materials, cell manufacturing, and advanced component production—areas where Chinese firms currently hold over 80% of global capacity. Without coordinated investment in these upstream capabilities, Europe may find itself assembling batteries that still rely on imported cells, limiting the policy’s effectiveness in reducing dependency.

The mixed reactions from industry groups underscore the act’s contentious balance between ambition and practicality. While Energy Storage Europe praises the streamlined processes, solar industry bodies argue the scope is too narrow, leaving key PV components out of the domestic‑content mandate. To truly transform the European clean‑energy ecosystem, policymakers will need to pair the IAA with targeted subsidies, workforce development, and cross‑border collaboration that address the full value chain, ensuring that the continent can compete with China’s entrenched manufacturing advantage.