Made in Europe Requirements in Public Procurement
Risks and opportunities for climate action, circularity, and competitiveness
Every year, European governments spend around EUR 2.5 trillion through public procurement. As policy-makers consider prioritizing European products and suppliers, this report examines why "Made in Europe" requirements are gaining traction, how local content rules can be designed, and where they can create lead markets for climate-friendly and circular innovation—and where they risk falling short.
Key Messages
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As the European Union reforms its public procurement rules, it should create better conditions for companies to compete based on long-term value creation, innovation, and credible climate action.
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Made in Europe rules are increasingly discussed as one policy option for using procurement more strategically to support resilience, competitiveness, and industrial transformation.
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Local content rules come with risks for costs, supply chains, trade relationships, and procurement procedures but also offer an opportunity for value creation, lead markets for low-carbon products, and competition based on green innovation.
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Policy-makers must ensure that costs and benefits are carefully assessed and that Made in Europe rules are part of a coherent, harmonized procurement framework.
Public procurement is a powerful yet underused tool for shaping markets. In the European Union, it represents around 15% of GDP and is linked to roughly 11% of greenhouse gas emissions—giving public authorities strong leverage to influence how companies compete and what kinds of products and business models succeed. At a time of geopolitical uncertainty, industrial rivalry, and climate change, this market power is becoming more important. In that context, local content requirements (LCRs), or Made in Europe requirements, have been one of the central themes of the debate on procurement reform.
Well-designed LCRs can support resilience, clean industry, and low-carbon markets. When combined with robust environmental requirements, they can help reduce emissions, improve circularity, and create lead markets for more sustainable products—particularly in heavy industries such as steel and cement, where decarbonization has progressed slowly despite years of effort. But if LCRs are too broad or too rigid, they can increase costs, reduce competition, add legal and administrative complexity, and create tensions with international trade partners. Origin criteria alone, without ambitious environmental standards, risk entrenching high-emitting producers rather than driving clean industrial transformation.
The report examines how domestic preference rules can be defined and how they are used in India, Canada, and China. The report maps their main risks and opportunities, identifies the conditions under which LCRs can effectively support clean lead markets, and explores their application in the steel, concrete, and clean technology sectors. The report concludes with four recommendations for policy-makers on advancing Made in Europe requirements in the context of the Industrial Accelerator Act and the future EU Public Procurement Act.
Participating experts
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