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What European Preference Means for Procurement

The practical guide for procurement officers and suppliers to Europes 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

SectorRequirementScope
Electric Vehicles70% European content (excl. battery)Components must be EEA-manufactured; final assembly in EEA
Steel (construction)25% low-carbon European steelPublic infrastructure and construction projects
Aluminium25% EU/EEA-made minimumPublic procurement above threshold values
Plastics (windows/doors)30% EU/EEA-made minimumConstruction-grade plastics in public projects
BatteriesStrategic sector — subsidy preferenceFast-track permitting; priority in subsidy allocation
Renewable EnergyStrategic sector — subsidy preferenceSolar, wind equipment procurement preference
CementMandatory low-carbon labellingAll cement sold in EU market; public procurement scoring
Nuclear & HydrogenDecarbonisation priorityDedicated support and procurement preference

Compliance Readiness Checklist

Five things to assess now, before the law is finalised:

1

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.

2

Identify affected contracts

Review your current and upcoming public procurement contracts. Which fall in the 6+ strategic sectors? Which are above EU procurement thresholds?

3

Assess your European content percentage

For each affected product line, calculate your current European content ratio. Compare against the proposed thresholds for your sector.

4

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.

5

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 than100 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. Well send you a weekly summary of what changed.