What European Preference Means for Procurement
The practical guide for procurement officers and suppliers to Europe’s public sector.
Important Distinction
European Preference applies to public procurement and subsidised projects only. Commercial B2B and B2C transactions are not directly affected. However, the low-carbon labelling requirements apply to the broader market (steel and cement initially).
Sector Thresholds
| Sector | Requirement | Scope |
|---|---|---|
| Electric Vehicles | 70% European content (excl. battery) | Components must be EEA-manufactured; final assembly in EEA |
| Steel (construction) | 25% low-carbon European steel | Public infrastructure and construction projects |
| Aluminium | 25% EU/EEA-made minimum | Public procurement above threshold values |
| Plastics (windows/doors) | 30% EU/EEA-made minimum | Construction-grade plastics in public projects |
| Batteries | Strategic sector — subsidy preference | Fast-track permitting; priority in subsidy allocation |
| Renewable Energy | Strategic sector — subsidy preference | Solar, wind equipment procurement preference |
| Cement | Mandatory low-carbon labelling | All cement sold in EU market; public procurement scoring |
| Nuclear & Hydrogen | Decarbonisation priority | Dedicated support and procurement preference |
Compliance Readiness Checklist
Five things to assess now, before the law is finalised:
Audit your supply chain origins
Map where your key components and raw materials are sourced. Identify which are EEA-origin and which are not. This is your baseline.
Identify affected contracts
Review your current and upcoming public procurement contracts. Which fall in the 6+ strategic sectors? Which are above EU procurement thresholds?
Assess your European content percentage
For each affected product line, calculate your current European content ratio. Compare against the proposed thresholds for your sector.
Evaluate alternative European suppliers
Where you fall below thresholds, identify European suppliers who could replace non-EEA sources. Factor in cost, quality, and lead time differences.
Monitor the legislative timeline
The law is a proposal — Parliament and Council will negotiate amendments over the next 12–24 months. Thresholds may change. Subscribe to stay updated.
Foreign Investment Restrictions
Beyond procurement rules, the Act introduces a 49% cap on non-EU ownership in greenfield investments in strategic sectors. This means non-European companies investing more than€100 million in sectors like batteries, renewables, or semiconductor manufacturing will face ownership restrictions.
This is separate from existing foreign direct investment screening but creates an additional layer of scrutiny for strategic industrial investments.
Get the compliance updates
As the law moves through Parliament, thresholds and requirements will evolve. We’ll send you a weekly summary of what changed.