The Industrial Accelerator Act

A detailed briefing on the EU’s proposed Industrial Accelerator Act what it could mean for the heat pump sector.

If you’ve been following European policy news, you may have come across the Industrial Accelerator Act[1]. It is a new legislative proposal from the European Commission that could reshape parts of the European industrial landscape, including the heat pump sector.

Policy news can feel distant from the daily realities of running a distribution business, completing installations, and serving customers. But this particular piece of legislation is worth understanding, because heat pumps are specifically named in the proposal, and the direction it points to has real implications for our industry over the coming years.

This briefing explains what the Industrial Accelerator Act actually proposes — in plain language, without policy jargon.

Let’s start with the basics.

On 4 March 2026, the European Commission proposed the Industrial Accelerator Act (IAA). It’s part of a broader push by the EU to strengthen European industrial capacity in strategically important sectors — particularly those linked to the green transition and energy security.

The proposal has an ambitious headline goal: to increase industrial manufacturing to 20% of EU GDP by 2035, up from 14.3% in 2024. That’s a significant shift, and it signals that European policymakers want to actively support and grow industrial activity within Europe, rather than simply regulate it.

Heat pumps are explicitly identified as one of the net-zero technologies covered by the framework, alongside batteries, wind turbines, solar panels, and electrolysers. In other words: the heat pump industry is squarely in the policy spotlight.

It is important to understand that the IAA is currently a proposal and not yet a law. The European Parliament and the Council will review the text, propose amendments and negotiate a final version through the so-called trilogue process before formal adoption. 

While the final wording may change during the legislative process, the overall direction is already clear. The proposal forms part of a broader package of European industrial and energy policies aimed at strengthening manufacturing capacity, competitiveness and supply chain resilience across Europe.

The European Commission has indicated an ambition to advance adoption during 2026. Although the final timeline and details remain subject to the legislative process, the proposal provides a strong indication of where European policy is heading. 

Let’s take a closer look at the parts of the proposal that are most relevant to the heat pump value chain, from manufacturing through to installation.

1. Made-in-EU Preferences in Public Procurement

This is probably the most directly relevant pillar for our industry. The proposal introduces preferences for EU-origin and low-carbon products in public procurement and public support schemes. 

In practice, this could mean:

It’s worth noting that “EU origin” under customs rules is broader than EU membership alone. Goods manufactured in countries with established preferential arrangements with the EU, such as the EU-Turkey Customs Union or the EU-UK Trade and Cooperation Agreement, may, depending on product category and rules of origin, qualify for preferential treatment under EU origin-based policy mechanisms.

For distributors and installers, this matters because end customers, especially those accessing subsidies or working on public projects, may increasingly need to demonstrate origin and supply chain credentials. A product with credible European or EU-aligned manufacturing content becomes a sales advantage.

2. Foreign Investment Controls in Strategic Sectors

The proposal introduces new approval requirements for large foreign investments in strategic manufacturing sectors. Specifically, acquisitions or greenfield investments by non-EU investors would require prior approval where the investment exceeds €100 million and the investor comes from a country that holds more than 40% of global manufacturing capacity in the relevant sector.

This is a less direct concern for distributors and installers, but it signals something important: the EU is actively working to maintain control over strategic manufacturing capacity within Europe. This is the policy backdrop against which all manufacturers, including those in the heat pump sector, are being asked to think about where and how they produce.

3. Industrial Manufacturing Acceleration Areas

Each Member State would designate at least one geographic area as an “Industrial Manufacturing Acceleration Area”. These areas would provide favorable conditions for industrial manufacturing projects through faster permitting, streamlined regulations, and supportive enabling measures.

The idea is to cluster industrial activity in places that can scale rapidly. For the heat pump industry, this could create new opportunities for European-based manufacturing investment over time.

4. Streamlined Permitting

Building on existing frameworks like the Net-Zero Industry Act, the IAA proposes simplified and faster permit-granting procedures for industrial manufacturing projects. The objective is to reduce the years-long permitting delays that have historically slowed European industrial expansion.

Stepping back from the technical details, the combined effect of the IAA, together with related initiatives like the Net-Zero Industry Act, the Clean Industrial Deal, the Critical Raw Materials Act, and AccelerateEU, points clearly in one direction:

European policy is actively favoring manufacturing in multiple countries, with verifiable origin, and supply chains that can withstand disruption.

For heat pump manufacturers, distributors, and installers, the underlying market opportunity is being reinforced. Heat pumps are recognized as a strategic technology essential to Europe’s energy transition and energy security goals. Policy is working to:

For everyone in the value chain, the policy direction creates a structurally favorable environment for the years ahead.

Read more about the Industrial Acceleration Act here

In our next briefing, we’ll look at what this means in practice.

[1] Industrial Accelerator Act – Internal Market, Industry, Entrepreneurship and SMEs