Cleantech for Europe‘s Policy Update - Feb, March Edition
March 17, 2026
Welcome to the latest edition of Cleantech for Europe’s Policy Update, yourone-stop-shop for EU cleantech policy news and analysis. In this PolicyUpdate, we explore:
After months of delays, the European Commission on 4 March unveiled the Industrial Accelerator Act (IAA) – a proposal that could become one of the EU’s most consequential industrial policy files for clean technologies.
The proposal introduces a new regulation alongside amendments to the Net-Zero Industry Act (NZIA), signalling a shift from conceptual debate to concrete legislative design around “Made in Europe” industrial policy.
For the first time, the EU explicitly links public procurement and public support schemes to Union-origin criteria. In practice, this means that when public money is deployed, policymakers now recognise that it is legitimate to expect production, jobs, and know-how to remain in Europe. But beyond this headline shift, the proposal sends a mixed signal.
The most important shift is conceptual. The IAA proposes applying Union-origin criteria to public funding across numerous clean technologies and their value chains; namely batteries, wind turbines, nuclear fission, solar panels, heat pumps, and electrolysers, due to their economic and security importance. These requirements could be expanded to other net-zero technologies in the future if it is deemed necessary by the Commission. Crucially, these requirements would apply across several forms of public intervention, including public procurement, auctions, certain state aid schemes, and other support measures.
For years, the EU has been reluctant to link public support to local production to remain in the spirit of the WTO rules, despite most major economies globally doing so in one form or another. In that sense, the IAA marks a notable step toward a more assertive European clean industrial policy.
Despite months of debate around a strong “Made in Europe” signal, the final proposal is significantly waeker compared to earlier drafts. Local content incentives apply to a narrower set of clean technologies and components, and a smaller share of public funding. In addition, member states can waive the requirements if they lead to “disproportionate costs”, with thresholds ranging roughly between 20% and 30% depending on the type of public funding.
Given the current cost advantage of some global suppliers, these escape clauses could be triggered frequently by Member States in the early years, potentially resulting in a fragmented application across Europe and weakening the demand signal for cleantech manufactured in Europe – a key factor for investors deciding where to build factories.
The most contentious element concerns the geographical scope of “Union-origin” equivalents. Eligibility can extend beyond the EU to countries with free trade agreements, customs unions, or membership in the WTO Government Procurement Agreement – including countries that apply local content incentives of their own which do not in turn extend eligibility to EU-based production.
This broad scope dilutes the demand signal for European manufacturing, especially as any exclusion of non-reciprocal countries would only occur after the Act enters into force, via secondary legislation – a politically uncertain step that may delay investment signals. In addition, several technologies previously discussed during negotiations – including grid technologies – are absent from the final scope, despite their strategic importance.
🔗 Read more: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_515
As LNG and energy prices increase as a result of the conflict in the middle east and discussions intensify ahead of the Energy Council (16 March) and the European Council (19–20 March), the debate around Europe’s energy prices and industrial competitiveness has increasingly turned toward the EU Emissions Trading System (ETS).
In this context, Cleantech for Europe and a coalition of +100 companies and investors sent on March 11 an open letter to European leaders, warning that weakening or suspending the ETS as called for by certain industry sectors would do more harm than good to the investment climate. The letter stresses that such moves would be a serious misdiagnosis of Europe’s competitiveness challenge and risk undermining investment certainty for industrial decarbonization.
The ETS remains the cornerstone of Europe’s climate framework and a key demand signal for clean technologies. Weakening it would ecarbon first movers that have already invested in decarbonization and could have a chilling effect on capital markets.
Looking ahead to the ETS review planned for July 2026, the focus should instead be on targeted improvements, particularly how ETS revenues are deployed. Member States collect the vast majority of these revenues and deploy these for climate related expenditures, yet too little is reinvested in projects that improve the bankability of industrial decarbonization.
Using ETS revenues more strategically – for example to accelerate industrial electrification, support clean industrial PPAs, and strengthening instruments like the Innovation Fund – will be critical to Europe’s clean industrial competitiveness.
On March 10, the European Commission unveiled its Clean Energy Investment Strategy, aimed at accelerating the scale of investment needed to power Europe’s energy transition – estimated at €660 billion annually until 2030.
🔗 Read more: https://energy.ec.europa.eu/news/commission-launches-strategy-accelerate-clean-energy-investment-2026-03-10_en
The European Commission has opened two relevant consultations:
Mistral AI invests €1.2B in Swedish AI data center – In February 2026, French company Mistral AI announced a €1.2 billion investment to build a new AI-focused data center in Sweden, in partnership with operator EcoDataCenter. The 23 MW facility, expected to be operational by 2027 and powered entirely by renewable energy, will expand Mistral’s computing capacity by around 50%, complementing existing deployments in France. Equipped with next-generation Nvidia chips, the site will support both the training of Mistral’s generative AI models and provide compute capacity for industrial clients developing their own AI applications.
Imerys secures €50M for EMILI lithium project – In February 2026, France-based Imerys received a €50 million investment from Banque des Territoires under the France 2030 plan to advance its EMILI lithium project. The funding supports feasibility studies for a strategic project expected to supply lithium for up to 700,000 EVs annually.
Einride raises €98M to support SPAC merger – In February 2026, Swedish autonomous freight company Einride secured an oversubscribed €98 million PIPE financing to back its proposed business combination with Legato Merger Corp. III. Backed by new and existing investors, including EQT Ventures & Growth, the raise reinforces confidence in Einride’s electric and autonomous logistics strategy.
GA Drilling secures €38M to scale NexTitan – In March 2026, Austria-based GA Drilling raised €38 million to accelerate commercial deployment of its NexTitan geothermal drilling technology, following successful field validation. The round was led by TomEnterprise AB with participation from Underground Ventures and strategic partner Nabors Industries, targeting cost-effective, scalable deep geothermal solutions.
Moeve launches €1B green hydrogen plant in Spain – In March 2026, Madrid-based Moeve announced a final investment decision for its Onuba green hydrogen project, the largest in Southern Europe. The €1 billion first phase will produce 45,000 tons of green hydrogen annually, reduce 250,000 tons of CO₂, and support decarbonization of transport and industrial sectors, with co-investors Masdar and Enalter.
• Electricity 2026 – The IEA’s annual report on global electricity systems and markets provides in-depth analysis of the recent trends and policy developments.
• IEA – The State of Energy Innovation 2026
• World Fund – The Series B Funding Gap In European Climate Tech
• Volta Foundation – 2025 Annual Battery Report
• Ember – Reframing Energy for the Age of Electricity
• Ember – Hot stuff: geothermal energy in Europe
Watt we’re listening to and watching
• Zero: The Climate Race – Bloomberg’s Akshat Rathi and Columbia University’s Jason Bordoff discuss the energy implications of the Iran war
• Redefining Energy: PPAs, FPAs, IPPs, Flex and Capture rates: new paradigms – Luca Pedretti, Co-Founder, Pexapark, discusses how volatility, market design, and new contract structures are transforming power markets and renewable economics
