EU plans 'Made in Europe' requirement for public purchases of green technologies

The European Union plans to impose minimum "Made in Europe" requirements for public purchases of key green technologies to boost local industry and reduce reliance on Chinese imports, according to a draft European Commission proposal seen by Reuters. Reuters.

The EU is racing to strengthen its industrial base as high energy prices, cheaper Chinese imports and US President Donald Trump's tariffs put pressure on European manufacturers. A draft legislative proposal from the Commission, to be presented next week, will set new rules for public procurement of batteries, solar and wind energy components and electric vehicles.

"The EU must act strategically to secure and further strengthen its industrial base, its long-term competitiveness and ensure that the climate transition becomes a engine of industrial prosperity, and not a source of deindustrialization," the document, which can still be changed before publication, says.

Under the plan, battery systems purchased through public procurement, 12 months after the law enters into force, will have to be assembled within the EU, with the battery management system and two other components to be delivered within the bloc.

The rules will tighten in two years, requiring the battery system itself to be manufactured in Europe, along with more of its key components, including the cells.

Strategic warning signal

Brussels wants to limit dependence on China, which dominates the production of solar panels and batteries and increasingly competes in sectors where Europe continues to have strong positions, including wind turbine production.

"The EU's share of the gross value of global industry fell from 20,8% to 14,3% over the period 2000-2020. This is a strategic warning signal," the draft also says.

The proposal will also set minimum shares in public procurement for EU-made low-carbon industrial goods and require that power cables and charging infrastructure for electric vehicles be produced in Europe. Foreign direct investment above €100 million in strategic sectors will not be approved unless it meets new conditions for the use of European-made components and EU labour.

The plans have divided EU governments, who must negotiate the law with the European Parliament. France supports the initiative, while Sweden and the Czech Republic warn that the rule to buy local could raise prices in tenders and undermine the bloc's competitiveness.