This Week in Manufacturing — Brussels (#19, 2026)
EU-Mexico Modernised Agreement signed; Commission secures fertiliser supply; €400m grants for industrial decarbonisation; State aid for chips and hydrogen.
May 17, 2026 to May 23, 2026
EU-Mexico Modernised Agreement signed; Commission secures fertiliser supply; €400m grants for industrial decarbonisation; State aid for chips and hydrogen.
📋 In This Week's Newsletter
• 📅 This Week's Calendar in Brussels
• 🇪🇺 European Commission
• ⚖️ EU Legislation
• 🤝 EU Council
• ✒️ EP Committee Work
• 📚 What We're Reading This Week
This Week's Calendar in Brussels
- Competitiveness Council (Research and Space): On May 29, the EU Council's Competitiveness Council (Research and Space) configuration is scheduled to hold an ministerial meeting in Brussels.
European Commission
EU and Mexico sign Modernised Global Agreement at Strategic Summit
On 21 May 2026, the European Commission and Mexico signed the Modernised Global Agreement (MGA) and interim Trade Agreement (iTA) at the 8th EU-Mexico Summit in Mexico City. The EU was represented by President Ursula von der Leyen, President of the European Council António Costa, High Representative Kaja Kallas, and Commissioner Maroš Šefčovič. The Agreements aim to reinforce political dialogue, trade, investment, supply chains for critical raw materials, and regulatory cooperation, with an emphasis on labour rights, environmental protection, and gender equality. Key areas benefitting industry include easier access for agri-food, machinery, and pharmaceuticals, as well as streamlined rules for services exports, government contracts, and intellectual property protection. The Agreements follow extensive negotiations and now move to EU ratification procedures.
Commission adopts Fertiliser Action Plan to support EU farmers and domestic production
On 18 May 2026, the European Commission adopted the Fertiliser Action Plan to address rising fertiliser costs and supply disruptions impacting EU food security. The Plan combines immediate support measures for farmers, including liquidity schemes and targeted financial relief, with longer-term actions to reinforce domestic production and transition to sustainable, circular alternatives. Upcoming proposals include a legislative package for CAP flexibility and initiatives to simplify permitting and nutrient management. The Commission will also establish a value chain partnership and strengthen market transparency for fertilisers, and assess options for stockpiling and joint procurement.
€400 million awarded for industrial heat decarbonisation projects under Innovation Fund
On 21 May 2026, the Commission selected 65 projects across ten EEA countries under the Innovation Fund Heat Auction, granting €400 million for innovative clean heat technologies. Industrial sectors such as pulp and paper, glass, ceramics, iron, steel, food, and textiles are included. The grants, funded by the EU Emissions Trading System, aim to avoid over 6.6 million tonnes of CO2 in ten years and accelerate electrified and renewable heat solutions. CINEA will finalise grant agreements, with a second Heat Auction for €1 billion planned for later in 2026.
Commission approves €1.3 billion German State aid for renewable hydrogen production
On 19 May 2026, the Commission approved a €1.3 billion German scheme supporting renewable hydrogen production through the European Hydrogen Bank's Auctions-as-a-Service tool. The aid will fund up to 1,000 MW of electrolyser capacity, providing direct grants per kilogram produced for up to ten years, supervised by CINEA. The scheme is aligned with the Clean Industrial Deal, REPowerEU Plan, and EU Hydrogen Strategy. Projects must comply with EU criteria for renewable fuels of non-biological origin, and beneficiaries are selected via competitive bidding. Infrastructure links Denmark’s Hydrogen Backbone 1 pipeline with German buyers.
Commission approves €288 million German State aid for semiconductor facilities
On 19 May 2026, the Commission approved €288 million in State aid for two semiconductor supply chain projects in Germany: €222 million for Carl Zeiss (Oberkochen) and €66 million for Zadient Materials Europe (Bitterfeld). The Zeiss project involves EUV optical columns for lithography equipment, while Zadient will produce ultra-pure silicon carbide utilizing a novel circular process. Both projects enhance EU supply chain resilience as targeted by the European Chips Act. Beneficiaries commit to workforce development, supply prioritisation, and collaboration with academia, and may apply for Integrated Production Facilities status.
Commission sends Statements of Objections to turf companies over recycling cartel allegations
On 20 May 2026, the Commission informed companies in the synthetic turf sector of its preliminary view that antitrust rules were breached by collusion on recycling in the Netherlands and Germany. The objections concern Oranjewoud, TenCate Grass, Sports & Leisure Group, Domo Sports Grass Nederland, and Sport Group. Practices included coordinated commercial conduct, exclusive use of recycling services, fixed pricing, and information exchanges on prices and capacities. The investigation covers case numbers AT.40957 (Netherlands) and AT.40956 (Germany).
Commission presents plan to secure Europe's fertiliser supply and food security
On 18 May 2026, the Commission launched the Fertiliser Action Plan to tackle supply disruptions and price volatility affecting farmers. The plan includes targeted support to reinforce domestic production, improve supply resilience, promote bio-based and low-carbon fertilisers, and market transparency. Measures cover facilitating digestates use, reviewing the Nitrates and Waste Framework Directives, and creating a value chain partnership for stakeholders. The Commission will assess impacts from CBAM, ETS, and consider stockpiling strategies.
Commission publishes guidance for consistent assessment of water laws in critical projects
On 21 May, the Commission published guidance clarifying application of the Water Framework Directive and its daughter directives. The guidance supports resilience by harmonising procedures for environmental impact assessments, particularly for mining and critical raw materials. New exemptions allow simplified permitting for projects that result only in short-term deterioration or pollution relocation. The document also outlines faster assessment protocols for sectors under the Renewable Energy Directive III, Chips Act, and Net Zero Industry Act.
EU Legislation (Official Journal)
Commission Implementing Regulation (EU) 2026/1085 on registration of acrylic ester imports
On 21 May 2026, Commission Implementing Regulation (EU) 2026/1085 directed customs authorities to register imports of butyl acrylate and 2-ethylhexyl acrylate from China, Saudi Arabia, South Africa, and the US, classified under TARIC code 2916 12 00 15. The registration aims for potential retroactive anti-dumping duties following the March 2026 anti-dumping proceeding pursuant to Regulation (EU) 2016/1036. Registration expires after nine months.
Decision (EU) 2026/1134 on mobilisation of European Globalisation Adjustment Fund for Belgium
Decision (EU) 2026/1134, dated 29 April 2026, mobilises €2,033,869 from the European Globalisation Adjustment Fund, following an application from Belgium—EGF/2025/008 BE/Liberty. The support assists workers displaced due to restructuring at Liberty Galaţi Belgian Branch, under Regulation (EU) 2021/691.
UN Regulation No 94 [2026/1075] on frontal collision protection for vehicles
UN Regulation No 94 [2026/1075], published 22 May 2026, sets technical standards for approving vehicles regarding occupant protection in frontal collisions. The regulation details requirements for protective systems, crash test procedures, conformity, and transitional provisions. Entry into force of the 05 series amendments is scheduled for 1 September 2027.
Agreement in the form of exchange of letters between EU and China on tariff rate quotas following UK withdrawal
On 18 May 2026, the EU and China concluded an agreement on modification of concessions for all tariff rate quotas in EU Schedule CLXXV, under GATT Article XXVIII, resulting from the UK's EU withdrawal. Quantitative commitments for products such as garlic, rice, plywood, and food preparations are apportioned between the EU and UK, to reflect revised trade arrangements.
Council Decision (EU) 2026/1076 approving tariff quota agreement between EU and China
Council Decision (EU) 2026/1076, adopted 5 May 2026, formalises EU approval of the tariff rate quota agreement with China (see OJ L, 2026/1077), which is based on GATT Article XXVIII and adjusts the EU's market access following the UK's withdrawal.
EU Council
EU-Mexico summit marks signature of modernised global agreement and interim trade deal
On 22 May 2026, EU and Mexican leaders held the 8th EU-Mexico summit, endorsing the modernised global agreement and interim trade agreement. Both sides reaffirmed commitment to multilateralism and rules-based trade.
Foreign Affairs Council (Trade) reviews EU economic security and WTO reform
On 22 May 2026, EU trade ministers discussed the impact of the Middle East conflict on EU trade, followed up on the 14th WTO ministerial conference, and considered WTO reform. Lunch focused on ongoing trade negotiations.
Economic and Financial Affairs Council holds informal meeting in May
ECOFIN ministers met informally on 22 May 2026 for discussions on current economic and financial affairs.
EP Committee Work
INTA DRAFT REPORT: Regulation on monitoring and controlling drug precursors
On 20 May 2026, the International Trade Committee (INTA) published a draft report on the proposal for a regulation monitoring and controlling drug precursors, with Nicolas Bay (rapporteur). The regulation will repeal Regulations (EC) No 273/2004 and (EC) No 111/2005, addressing trade and supply chain oversight for substances used in drug manufacturing.
ITRE DRAFT OPINION: CO2 emission standards and vehicle labelling for new light duty vehicles
On 20 May 2026, ITRE committee issued a draft opinion (rapporteur: Matej Tonin) on amending Regulation (EU) 2019/631 regarding CO2 emission standards and repealing Directive 1999/94/EC. The opinion discusses standards for new light duty vehicles and labelling practices relevant to automotive manufacturing and trade.
What We're Reading This Week
- Von der Leyen calls for completing the European single market in EU parliament address: European Commission President urges renewed efforts to fully integrate the EU single market, emphasizing growth and competitiveness benefits.
- Newsletter: EU makes its trade play in Mexico: EU intensifies efforts to secure economic influence in Mexico amid shifting global trade alliances and growing competition from major powers.
- European companies are reindustrialising — just with less money: European firms are ramping up production at home but investing less than in previous reindustrialisation efforts.
