Council Proposes Mandatory Low-Carbon and EU-Origin Materials in Public Procurement from 2029

The EU Council has published a cover note outlining a new legislative proposal to accelerate industrial capacity and decarbonisation in strategic sectors, including mandatory minimum requirements for low-carbon and EU-origin materials in public procurement from 2029. The draft Regulation, which also amends existing rules on public procurement and industrial support, aims to strengthen the EU's industrial base while advancing climate goals.

The document, dated 3 May 2026, originates from the Council's preparatory bodies and falls under the EU's industrial, climate, and energy policy areas. It proposes a framework to enhance production of strategic technologies and reduce dependence on non-EU supply chains.

From 2029, public procurement and EU-supported projects would be required to meet minimum thresholds for the use of low-carbon and EU-origin steel, concrete, and aluminium. The proposal also introduces detailed 'Union origin' criteria for electric vehicles, defining conditions under which they qualify for preferential treatment in public procurement and support schemes. These measures aim to create demand for domestically produced green materials and vehicles, boosting industrial competitiveness and reducing carbon footprints.

The proposal balances environmental objectives with potential economic impacts. On one hand, it could accelerate decarbonisation of heavy industries and reduce reliance on imports, enhancing EU strategic autonomy. On the other, it may increase costs for public authorities and businesses, particularly in construction and transport, and could face legal challenges under WTO rules for discriminating against foreign producers. The 'Union origin' criteria for EVs may also disrupt existing supply chains and raise compliance costs for manufacturers.

Stakeholder Impacts

- EU producers of steel, concrete, aluminium, and EVs: Stand to benefit from guaranteed demand and a level playing field, but face pressure to invest in low-carbon production technologies. - Public authorities: Will need to adapt procurement practices and potentially pay higher prices for compliant materials, straining budgets. - Non-EU producers: Risk being excluded from a significant market, potentially leading to trade disputes. - EU consumers and taxpayers: May face higher costs for public infrastructure and vehicles, but could gain from reduced emissions and long-term industrial resilience.

Next Steps

The proposal will be discussed in the Council's working parties before being transmitted to the European Parliament for co-decision. The European Commission is expected to provide an impact assessment, while industry groups and NGOs will likely lobby for amendments to the scope and timelines of the requirements.