According to a report published on the WeChat public account “CCCEU” of the EU China Chamber of Commerce on June 19, on June 18, the EU China Chamber of Commerce submitted official feedback to the European side regarding the ‘Industrial Accelerator Act’ proposed by the European Commission. The chamber expressed systemic concerns regarding provisions in the proposed act that involve public procurement restrictions, foreign investment review mechanisms, and legal uncertainties, and proposed specific amendments.
The chamber represents more than 1,000 Chinese-funded enterprises in Europe, covering fields such as automobile manufacturing, renewable energy, digital economy, logistics, and advanced technologies. The chamber points out that although the IAA aims to enhance the competitiveness of EU industries and accelerate the energy transition, its various provisions may have counterproductive effects.
In the field of public procurement, Articles 11 and 12 of the bill, as well as the amendments to the Net-Zero Industry Act, significantly exclude certain third-country economic operators from participating. At the same time, they provide preferential treatment for government procurement agreements, free trade agreements, and customs union partners. This has led to serious issues related to market access, non-discrimination principles, and compliance with WTO regulations.
In terms of regulatory complexity, the strict investment approval framework and restrictive conditions in the bill may divert investments to other regions where the regulatory environment is more predictable. Requirements for localization content and exclusivity standards will increase costs and weaken competitiveness, ultimately being passed on to European consumers, delaying the adoption of green technologies.
Ignoring the realities of the global supply chain, industrial policies cannot promote investment in the long term. The advanced manufacturing sectors covered by the legislation depend on multinational supplier networks, and restricting these networks will increase costs, reduce efficiency, and hinder the acceleration of industries. Reduced competition leads to a decline in competitiveness—imposing additional obligations on foreign investors creates an unfair competitive environment, weakening the ability of EU companies to benefit from global innovation networks.
The bill also fails to address the structural challenges faced by EU energy-intensive industries—high energy costs, excessive regulation, labor shortages, and declining innovation drive. By excluding international competition and imposing additional barriers on foreign investors, the bill may undermine rather than solve the challenges facing EU industrial growth.
Additionally, the definitions of key concepts in the bill such as "foreign direct investment," "control," and "alliances" are unclear. There is a lack of clarity regarding ownership thresholds, the calculation of investment mergers, and the potential retroactive applicability, resulting in significant legal uncertainty. This could delay strategic industry investment decisions.
The Chamber recommends limiting the scope of the exclusion clause for public procurement to high-value contracts (such as those worth over 250 million euros). It also proposes a waiver mechanism for third-country companies that have established operations in the EU, maintain operational independence, and are deeply integrated with local supply chains. The Chamber also calls for expanding the applicability of existing exceptions. Additionally, the Chamber emphasizes the need to clarify and standardize the definition of “public support programs” in Article 12, to avoid distortions in the single market caused by inconsistent interpretations among member states.
Regarding the requirement of “EU origin” in the bill, the chamber of commerce pointed out that it only refers to the non-concession origin rules in the EU Customs Code. These rules are very limited, and for other products, the “last substantial processing” standard must be relied upon. This standard has room for interpretation and is not standardized at the EU level. The chamber of commerce called for a clear definition of the “EU origin” standard and applicable rules, as well as clarification of the specific list of products in Annex II. In the solar photovoltaic field, the conditions applicable to central inverters and string inverters should be distinguished.
Regarding battery energy storage systems and solar photovoltaic products, the trade association recommends extending the transition period for EU origin requirements from the current 1 to 3 years to 3.5 to 7 years. The trade association points out that there is almost no domestic manufacturing of battery management systems within the EU, and there is a serious shortage of battery production capacity. It takes a long time to build new factories and improve production efficiency. Forcing suppliers to switch in the short term is not feasible both technically and in terms of time. The trade association also emphasizes that regarding the treatment equivalent to origin status under government procurement agreements, free trade agreements, and customs union partners, it should be clear that all economic operators that meet the origin requirements will receive non-discriminatory treatment, regardless of their parent company’s location or nationality.
The Chamber believes that Chapter IV of IAA adds a new approval level over the existing EU foreign investment review framework, which will significantly increase compliance costs and approval time. The Chamber recommends raising the investment trigger threshold from 100 million euros to 500 million euros, increasing the “control” determination threshold from 30% to 50%, and explicitly excluding greenfield investments and research and development projects from the review scope. The Chamber also calls for the removal of the nationality determination criteria based on 40% of global capacity, as well as the exemptions for EPA and FTA partners. Alternatively, if exemptions are retained, all investments from such partners should be exempted.
Regarding the substantive contribution criteria for the ‘Six Out of Four’ initiative, the trade association pointed out that four out of the six criteria—shareholding limits, mandatory technology transfers, local research and development, and supply chain procurement—create discriminatory barriers for investors from certain countries, such as China. The trade association recommended extending the implementation period for these compliance conditions from 12 months to 36 months, requiring only fulfillment of two conditions, and allowing for phased implementation over a period of 5 to 7 years. The trade association also suggested removing the 49% shareholding limit, in order to protect the strategic decision-making power of technology leaders and prevent the hindrance of advanced technologies entering the EU along with investments.
In terms of consolidated calculations and retroactive application, the trade association emphasizes maintaining legal certainty. The trade association points out that investments that have been completed or approved before the entry into force of IAA should not be consolidated with future investments. Investments implemented in phases should be exempted, and a transition period of at least five years should be provided. The trade association also calls for clarity regarding the applicable conditions stipulated in Article 18(4), to avoid excessive discretionary power being held by member state authorities. This is necessary to ensure transparency and predictability in investment approval processes.
In the concluding remarks, the chamber of commerce emphasized that several aspects of the bill involve compatibility issues with EU legal principles and WTO obligations, which need to be carefully examined during the legislative process.
The trade association calls for careful consideration of the potential cumulative regulatory burdens that may arise from the interplay between multiple approval mechanisms, localization requirements, industry contribution standards, ownership-related conditions, and qualification requirements linked to procurement and public support. Maintaining an open investment environment, technical cooperation, and a global integrated supply chain is crucial for maintaining the EU's attractiveness as a destination for large-scale manufacturing investments.
The Chamber of Commerce pointed out that industrial cooperation between China and Europe has made significant contributions to the competitiveness of the European Union. In areas such as electric vehicles, battery technology, and renewable energy, bilateral enterprises support the EU’s manufacturing capabilities, innovation, and supply chain resilience through investment, supply chain collaboration, and joint research and development. Regulations related to localization content and industry contribution standards in the bill may weaken the existing basis for cooperation and hinder future investments. Both China and Europe share common policy goals in promoting global energy transitions, accelerating the electrification of transportation, and deploying clean technologies. Measures in the bill that could adversely affect Chinese enterprises through procurement conditions, localization requirements, or investment-related standards will undermine the industrial cooperation that is crucial to achieving these common goals.
The EU China Chamber of Commerce supports the EU's ambition to build a more competitive, resilient, and clean industrial base. However, achieving this goal requires an open, predictable, and investment-friendly regulatory framework. As the legislative process progresses, it is essential that the final bill maintains legal certainty, promotes international cooperation, and provides an open investment environment while enhancing competitiveness. This will help the EU strengthen its manufacturing base, attract investments, and accelerate the deployment of clean technologies necessary to achieve long-term climate and industrial goals. The chamber calls on the European side to listen carefully to the rational voices of industry, including business associations, during subsequent legislative processes, to carefully assess the actual impacts and compliance risks of relevant provisions, and to adhere to the principles of fair competition and open cooperation in the market. Disagreements should be resolved through bilateral dialogue and consultation.
