EU Strategy to Reduce Reliance on Chinese Supply Chains

The European Commission has proposed a new legislative framework designed to reduce the European Union’s reliance on Chinese imports for critical industrial components. The Industrial Accelerator Act (IAA), published on March 4, 2026, introduces “Made in EU” requirements for projects funded by public money, aiming to diversify supply chains and bolster domestic manufacturing.

The proposal, identified as COM(2026) 100, specifically targets government procurement, direct subsidy schemes, and renewable energy auctions. Under the proposed rules, the EU intends to force companies to source parts from non-Chinese suppliers, with some plans suggesting a requirement for companies to buy critical components from at least three different suppliers to avoid over-reliance on a single source.

A primary focus of the act is the solar photovoltaic (PV) sector, where the EU currently maintains a heavy dependency on external imports. Between 94% and 98% of solar cells and modules used within the EU are currently sourced from China.

The IAA proposes a phased implementation timeline for solar components. Approximately three years after the act enters into force, which is estimated to be around 2030, public-funded solar projects will be required to use solar cells and inverters manufactured within the EU. The proposal specifies that assembly-only operations will likely not qualify as “Made in EU.”

These measures are part of a broader strategic goal to increase the EU’s industrial capacity. The Commission has set a target for EU manufacturing to account for 20% of the region’s GDP by 2035.

The scope of the Industrial Accelerator Act is limited to publicly funded initiatives. Private residential projects, corporate rooftop installations, and commercial and industrial (C&I) projects that do not receive subsidies will not be subject to these origin requirements.

The IAA is currently a proposal and has not yet become law. It requires the approval of both the European Parliament and the Council of the EU before it can be enforced. Given the legislative process, realistic enforcement of the rules is not expected until between 2029 and 2031 at the earliest.

Legal analysts have noted that the final text of the act may change due to the risk of challenges through the World Trade Organization (WTO). Such challenges could force the EU to adjust the “Made in EU” requirements to comply with international trade laws.

The push for the Industrial Accelerator Act comes as EU industry faces increasing pressure from Chinese competition. By tying access to public funds to domestic sourcing, the Commission seeks to create a more secure and autonomous supply chain for the transition to renewable energy.