BUSINESS

China Business Faces New Hurdles as EU Pushes Clean-Tech Localization

Published: Mar. 6, 2026 1:06 a.m. GMT+8

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The Ampere electric-vehicle production base in Douai, France. Photo: VCG

The European Commission has proposed sweeping legislation to strengthen domestic manufacturing in green technology, imposing strict local-content requirements and investment limits on sectors including electric vehicles, batteries and solar panels.

Unveiled Wednesday, the draft Industrial Acceleration Act would introduce a “made in the EU” mandate for projects seeking public procurement contracts or state subsidies, marking the bloc’s most aggressive push yet to rebuild its industrial base and reduce reliance on foreign supply chains.

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The European Commission proposed legislation requiring strict local-content and investment limits in green tech sectors, aiming to boost EU manufacturing and decrease reliance on foreign, especially Chinese, supply chains.
The bill targets sectors where a single country, like China, controls over 40% of global manufacturing and aims to raise EU manufacturing’s GDP share from 14.3% (2024) to 20% (2035).
China’s business groups warn these requirements could raise production costs and decrease European competitiveness.

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Who’s Who

China Chamber of Commerce to the EU: The China Chamber of Commerce to the EU expressed understanding for the EU's goal of strengthening competitiveness but cautioned that several proposed provisions in the Industrial Acceleration Act could harm European industry. They warned that mandated high-cost local components would increase production expenses and reduce the global competitiveness of European manufacturers. They also criticized investment restrictions as barriers to capital flows and potential forced technology transfers.

Transport & Environment: Transport & Environment (运输与环境组织) is an environmental campaign group that responded to the European Commission's draft Industrial Acceleration Act. While welcoming the bill, they cautioned that exemptions for "trusted partners" might dilute its effectiveness. They also advocated for the inclusion of cathode materials, crucial for battery cells, in the localization rules.

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