Low-carbon certification has moved from a sustainability report footnote to a condition of contract. For hard-to-abate industries across Europe, that change is happening faster than most boardrooms anticipated.

The European Commission’s proposed Industrial Accelerator Act, published in March 2026, builds directly on the foundations laid by the Net-Zero Industry Act and the Ecodesign for Sustainable Products Regulation. It is not yet law. But the direction is consistent with every major instrument already in force, and manufacturers waiting for ratification before acting are already losing ground.

The practical pressure is immediate. Under ESPR, manufacturers are now implementing carbon footprint declarations and product passports across key industrial categories.

CBAM entered its definitive period on 1 January 2026. The financial settlement, the actual surrender of certificates, falls in May 2027 for the 2026 reporting year. But the liability is accruing now. Every tonne of embedded carbon imported into the EU carries a cost. For European producers of steel, aluminium and cement, that cost lands squarely on their global competitors.

Steel, cement, chemicals, glass and aluminium face the steepest transformation costs. They also stand to gain the most from getting there first.

Our work with heavy industry shows that localisation is accelerating. OEMs in automotive are already making low-carbon certification a condition of contract at the Tier 1 level, and that requirement is moving down the supply chain. Steel producers who can demonstrate verified low-carbon output are commanding price premiums over commodity alternatives. Those who cannot are increasingly priced out of European procurement entirely.

The “Made in EU” label is acquiring real commercial weight. But it only holds if the underlying production process supports it. That requires investment in process electrification, industrial heat decarbonisation, and circular material flows, including critical mineral recovery under the EU Battery Regulation and steel scrap circularity under the Circular Economy Action Plan.

Energy is the pivot point. Not as a cost to be managed, but as a raw material that determines whether a production process is viable. The manufacturers gaining ground in 2026 are those practising price-responsive manufacturing, shifting energy-intensive production loads to align with renewable availability and low-price grid windows. That is where margin is being made and lost.

Those still running energy as a cost centre are exposed on two fronts: rising grid fees on one side and tightening EU ETS carbon costs on the other.

The window for incremental change has closed. Decarbonisation is the commercial strategy now, not a compliance burden running alongside it. The decisions made this year on energy flexibility and supply chain origin will determine who leads the European market in the next decade.