EU Industrial Accelerator Act: A Turning Point for Hydrogen – or a Missed Opportunity?
The EU Industrial Accelerator Act aims to strengthen Europe’s clean technology manufacturing and industrial decarbonisation. Yet for the hydrogen sector, the proposal leaves several unanswered questions—particularly around demand creation and investment certainty, which are critical for projects across the Baltic region.
NEWS
HydrogenLatvia
3/16/20263 min read
Europe’s New Industrial Policy Moment
The European Commission has introduced the Industrial Accelerator Act (IAA) as a central element of its emerging clean industrial strategy. The proposal aims to strengthen European manufacturing, accelerate industrial decarbonisation and increase demand for low-carbon technologies produced within the EU.
At its core, the regulation proposes “Made in Europe” requirements and low-carbon criteria for public procurement and public support schemes, covering strategic technologies such as batteries, solar PV, wind turbines, electrolysers, electric vehicles and other net-zero industrial technologies.
The goal is clear:
strengthen European industrial competitiveness
protect strategic clean technology supply chains
accelerate industrial decarbonisation
For hydrogen stakeholders, however, the announcement has triggered a mixed reaction.
Hydrogen Sector Expectations: Higher Than the Outcome
Over the past two years, the hydrogen industry has consistently called for stronger demand-side policies. The reasoning is straightforward:
Large-scale hydrogen projects require long-term offtake certainty before investors commit billions to infrastructure and production capacity.
Yet the Industrial Accelerator Act provides only limited new demand mechanisms specifically for hydrogen, which has disappointed many industry stakeholders. Industry groups have already noted that while the proposal is a step forward, its ambition and clarity for hydrogen deployment remain insufficient. The core concern:
Europe has successfully launched multiple funding tools for hydrogen production (such as the Hydrogen Bank and auctions), but without stronger market demand signals the investment pipeline remains fragile.
What the Act Actually Changes
Despite the criticism, the Industrial Accelerator Act introduces several elements that will influence the hydrogen value chain.
1. “Made in Europe” Requirements
Projects receiving public support may need to prioritize EU-manufactured components, including electrolysers. This could strengthen Europe’s electrolyser manufacturing base and reduce dependence on imported technology.
2. Public Procurement as an Industrial Tool
Public spending—worth roughly €2 trillion annually across the EU—will increasingly prioritize low-carbon and EU-produced technologies. This approach is intended to stimulate domestic supply chains and accelerate deployment.
3. Faster Permitting and Industrial Clusters
The Act proposes simplified permitting processes and support for industrial decarbonisation clusters—important elements for hydrogen valleys and regional ecosystems.
The Structural Challenge: Hydrogen Still Lacks a Market
The deeper challenge lies in the economics. Today, more than 90% of hydrogen used in Europe is still produced from fossil fuels, largely because green hydrogen remains significantly more expensive. Energy-intensive industries such as steel, chemicals and fertilisers face a difficult choice:
absorb higher costs
pass them to customers
delay decarbonisation investments
Without strong regulatory signals forcing low-carbon hydrogen uptake, many industrial buyers hesitate to sign long-term offtake agreements. That is precisely the gap many stakeholders hoped the Industrial Accelerator Act would close.
Why This Matters for the Baltic Region
For Latvia and the wider Baltic region, the implications are particularly relevant.
The Baltic hydrogen ecosystem is still in the early project development phase, but several opportunities are emerging:
Green hydrogen production linked to offshore wind
Green ammonia exports through Baltic ports
Hydrogen use in maritime transport and industrial decarbonisation
Integration with Nordic hydrogen markets
However, these opportunities depend heavily on European-level demand signals and regulatory certainty. Without them, projects risk remaining at the feasibility stage.
Strategic Implications for Latvia
From a Baltic perspective, the Industrial Accelerator Act highlights several strategic priorities.
1. Focus on Industrial Offtake
Latvia should prioritise hydrogen applications where demand is realistic:
ammonia production
maritime fuels
industrial heat and chemicals
2. Build Hydrogen Clusters Around Ports
Ports such as Ventspils, Liepāja and Riga can act as regional hubs for:
hydrogen production
ammonia and e-fuel export
maritime hydrogen applications
3. Align with EU Supply Chains
If “Made in Europe” rules expand, participation in European electrolyser and hydrogen equipment supply chains could become strategically valuable.
Europe’s Clean Industrial Transition Is Only Beginning
The Industrial Accelerator Act signals an important shift in European industrial policy. Brussels is clearly moving toward a model where public procurement, local manufacturing requirements and industrial clusters are used to accelerate the clean transition. For hydrogen, however, the legislation may represent only the first step. The real challenge remains unchanged: creating a large and reliable market for low-carbon hydrogen. Until that happens, many projects across Europe—including those in the Baltic region—will continue to wait for stronger policy signals.
Source: Industrial Accelerator Act is a step forward but lacks ambition