European Centre for International Political Economy ECIPE

What the Commission proposes

The European Commission is conducting a review of the scope, functioning, and efficiency of Regulation (EU) 2022/1031 on the International Procurement Instrument (IPI). The review evaluates the implementation of the regulation, including investigation processes, consultations, thresholds, exceptions, and the first adopted IPI measure regarding medical devices from China. It aims to assess the instrument's effectiveness in tackling procurement barriers in non-EU countries and ensuring a level playing field for EU operators. The findings will be presented in a report to the European Parliament and the Council by August 2027.

• Review of the scope, functioning, and efficiency of the IPI Regulation pursuant to Article 14.
• Assessment of investigation procedures, third-country consultations, thresholds, and types of measures.
• Evaluation of the application and implementation of the first IPI measure concerning Chinese medical devices.
• Analysis of the efficiency of online complaint tools and rules for determining origin.
• Execution of a 12-week online public consultation through the Have your say portal.
• Publication of a factual summary of consultation results and an implementation report to the European Parliament and the Council.

What is asked: Respondents are asked to provide views and evidence on the implementation, scope, functioning, and efficiency of the IPI Regulation in tackling non-EU procurement barriers, achieving market openness, and ensuring a level playing field, as well as the application of specific measures adopted under the Regulation.

Summary written by AI from the Commission's document.

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1. 4 We are consulting stakeholders to assess the implementation of the IPI Regulation in terms of: - the scope, functioning and efficiency of the Regulation in tackling non-EU countries procurement barriers, achieving openness of non-EU countries public procurement markets and ensuring a level playing field for EU businesses, goods, services and works; - implementation of specific measures adopted under the IPI Regulation. Target audience The target audience is composed of, in particular, interested parties affected by measures or practices in non-EU counties (e.g. businesses, business associations and cross-industry organisations), EU contracting authorities and EU contracting entities.

   Report from the Commission to the European Parliament and to the..., page 4 (EN)

2. B. What does the initiative aim to achieve and how The IPI is designed to promote market openness and ensure a level playing field for EU businesses, goods, services and works in third-country public procurement markets. The IPI Regulation requires continuous monitoring to: (i) ensure that the instrument remains coherent and efficient in tackling evolving public procurement market barriers in non-EU countries; (ii) provide the EU adequate leverage and the appropriate tools to create a level playing field for EU businesses, goods, services and works; and (iii) ensure a smooth application of measures adopted under the IPI. The Commission report will review the scope, functioning and efficiency of the IPI Regulation based on its implementation, in particular with regard to: (i) the scope of application of IPI; (ii) the rules of determination of origin;

   Report from the Commission to the European Parliament and to the..., page 3 (EN)

3. 2 A. Political context, problem definition and subsidiarity check Political context The International Procurement Instrument Regulation (IPI Regulation), which entered into force on 29 August 2022, aims to improve reciprocal access to international procurement markets in areas not covered by international commitments under the Agreement on Government Procurement or bilateral free trade agreements. The IPI Regulation tackles procurement barriers in non-EU countries by empowering the European Commission to initiate investigations against alleged restrictions in third- country procurement markets and consult with the countries concerned to encourage market opening. If consultations do not lead to satisfactory results, the EU may restrict access to its procurement market for companies, goods and services from countries that continue applying restrictions to EU firms.

   Report from the Commission to the European Parliament and to the..., page 2 (EN)

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What the Commission proposes

The European Commission proposes the Cloud and AI Development Act to establish a framework of measures aimed at strengthening Europe's cloud and artificial intelligence ecosystem. The initiative focuses on three pillars, which include research and innovation for greening infrastructure, industrial investments to triple EU data processing capacity, and actions to increase secure data processing capacities for cloud providers in the EU. Ultimately, the proposal seeks to address infrastructure gaps, reduce critical dependencies on non-European providers, and enhance the Union's digital sovereignty and competitiveness.

• Addresses the EU gap in cloud and AI infrastructure capacity through three distinct pillars.
• Promotes research and innovation to accelerate sustainable cloud and AI computing technologies.
• Aims to triple the EU data processing capacity over the next 5 to 7 years via industrial investments.
• Introduces measures to increase secure data processing capacities for high-critical use cases.
• Establishes common criteria for sovereign cloud computing services to reduce extraterritorial dependencies.
• Promotes open-source solutions and joint public procurement activities across the public sector.

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1. • Increase computing capacity deployed in the EU through innovative and sustainable technologies • Ensure attractive conditions for such deployment • Reducing the overall reliance on non-sovereign cloud and AI computing services • Contribute to the protection of public order by enhancing the resilience of supply of cloud and AI computing services, in particular in the public sector Value added at EU-level To boost computing capacity, an EU-level action provides a common approach enabling coherent planning and deployment of capacity in a geographically balanced way, while avoiding a race to the bottom and making the regulatory environment clearer for relevant businesses. To reduce the dependence on services supplied by non-European providers, EU- level action delivers benefits beyond what Member States can achieve individually by pooling resources and creating economies of scale.

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2. 35 Regulation (EU) 2024/903 of the European Parliament and of the Council of 13 March 2024 laying down measures for a high level of public sector interoperability across the Union (Interoperable Europe Act) (OJ L, 2024/903, 22.3.2024, ELI: http://data.europa.eu/eli/reg/2024/903/oj). 36 Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ L 123, 12.5.2016, p. 1, ELI: http://data.europa.eu/eli/agree_interinstit/2016/512/oj).

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3. 10 Joint Communication from the Commission to the European Parliament and the Council, ‘Strengthening EU economic security’, JOIN(2025) 977 final. 11 Council Conclusions on European Competitiveness in the Digital Decade, 5.12.2025, https://data.consilium.europa.eu/doc/document/ST-16430-2025-INIT/en/pdf.

   Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE..., page 16 (EN)

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What the Commission proposes

The European Commission proposes a revision of EU public procurement rules through a new regulation that repeals the existing 2014 directives on public procurement, utilities, and concessions. The initiative aims to modernize and simplify rules, reduce administrative burdens, and enable preferences for European products in strategic sectors to secure supply chains and add EU value. It also amends multiple sector-specific regulations and directives containing procurement provisions to improve coherence and transparency. Furthermore, the proposal addresses high administrative burdens and legal uncertainty identified in previous evaluations regarding public buyers and businesses.

• Revises and replaces Directives 2014/23/EU, 2014/24/EU, and 2014/25/EU with a single Public Procurement Act regulation.
• Enables preference for European products in strategic sectors to ensure security of supply and EU added value.
• Aims to modernize and simplify rules, specifically considering EU start-ups and innovators.
• Amends various sector-specific regulations and directives that contain public procurement provisions.
• Addresses administrative burdens and legal uncertainty that currently affect public buyers and businesses, including SMEs.

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1. PREFERRED OPTION 8.1. Chosen Options Based on the above problem definition, description of options and assessment of the impact of policy options, the following combination is chosen for this EU intervention: Table 9: Comparison of options Specific objectives 1. Simplify and promote flexibility in procurement procedures and increase legal clarity and coherence of applicable rules (FLX) 2. Increase the uptake of environmental, social and innovation public procurement and provide a more coherent legal framework (ESI) 3. Improve EU economic security and strategic autonomy in public procurement, promoting a coherent legal framework (BEU) 4. Facilitate access to public procurement information, data and IT tools (MPL)

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2. • Proportionality The proposed revision respects the principle of proportionality, as set out in Article 5 TEU and follows what is adapted and necessary to achieve the objectives of ensuring a more efficient, transparent and coherent EU public procurement framework, completing the Union’s strategic objectives. The establishment of the EU digital ecosystem is necessary to reduce fragmentation, administrative burden and costs by mandating the interconnection of Member States’ eProcurement systems into a single integrated EU public procurement marketplace, thereby also reducing compliance costs and facilitating cross-border participation and enhancing overall market efficiency. The European preference provisions in sector-specific acts are necessary to respond to the new geopolitical imperatives, while fully respecting the Union’s international commitments.

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3. Increasing the uptake of strategic procurement This Regulation establishes a coherent architecture for integrating strategic policy objectives into procurement design, award and contract performance. The proposal reinforces the quality dimension of award decisions. Contracts will as a rule be awarded on the basis of the best price-quality ratio, with minimum quality weighting requirements, including higher weighting for labour-intensive contracts. 9 https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/review-european- public-procurement-legal-framework.

   Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE..., page 3 (EN)

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What the Commission proposes

The European Commission has launched a public consultation on territorial supply constraints, which are limitations imposed by large manufacturers to prevent retailers from buying products in one Member State and reselling them in another. These practices fragment the Single Market, limit consumer choice, and lead to significant price differences for daily consumer goods across the EU. The initiative aims to introduce new tools to address these constraints beyond situations currently captured by competition law, as announced in the May 2025 Single Market Strategy. This consultation gathers input from stakeholders to better understand the impact and scale of these supply restrictions.

• Territorial supply constraints hinder retailers from buying goods in one Member State to resell in another
• Such practices fragment the Single Market and limit consumer choice
• They contribute to significant price differences for daily consumer goods across the EU
• The initiative follows the Single Market Strategy announced in May 2025
• New tools are proposed to address these constraints beyond existing competition law

What is asked: Respondents are asked to provide information and comments on territorial supply constraints, their impact on the Single Market, consumer choice, and retail prices, as well as views on potential tools to address them.

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What the Commission proposes

The European Commission has published an impact assessment and legislative review concerning Directive 2003/87/EC and Decision (EU) 2015/1814 on the EU Emissions Trading System (EU ETS) and the Market Stability Reserve. This initiative serves as the first part of a broad post-2030 framework package aimed at driving competitiveness and cost-effective decarbonisation. It evaluates how stationary installations, aviation, and maritime sectors can deliver necessary emission reductions while ensuring carbon leakage protection and orderly market functioning. The review addresses the shrinking supply of allowances and adapts the system to align with intermediate 2040 targets and 2050 climate neutrality goals.

• Reviews the EU ETS and the Market Stability Reserve to prepare for post-2030 climate targets.
• Assesses pathways toward the 2050 climate neutrality goal and the intermediate 2040 target.
• Focuses on industrial sectors, maritime transport, and aviation to ensure cost-effective decarbonisation.
• Examines carbon leakage protection, free allocation benchmarks, and the funding transition through EU revenues.
• Analyzes market functioning and allowance supply adjustments to prevent trading frictions and price volatility.
• Accompanies related proposals simplifying monitoring, reporting, and verification regulations.

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1. Adjusting the ETS to the 2040 target for EU GHG reductions, including revising the corresponding legal acts to align with the revision of the ETS, will affect many sectors across the EU economy and coordinated action at the EU level is therefore indispensable and has a much bigger chance of leading to the necessary transformation, acting as a strong driver for cost-effective change and upward convergence. Furthermore, many of the policy elements assessed in this impact assessment have an important internal market dimension. (b) Would national action or the absence of the EU level action conflict with core objectives of the Treaty5 or significantly damage the interests of other Member States?

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2. (6) The rapidly changing geopolitical context further emphasised the importance of delivering on the Clean Industrial Deal to enhance resource security and address Europe’s dependence on imported fossil fuels, which is the main cause of higher, and more volatile, energy prices. Conflicts in Ukraine and the Middle East confront the Union once again with volatile and rising energy prices driven by Europe’s dependence on imported fossil fuels, which damage the competitiveness of European industry. The EU ETS should continue to be a robust, predictable and fit for purpose driver of decarbonisation, thereby lowering the EU’s dependence on fossil fuel imports and strengthening its resilience, while fostering investments in the clean energy transition in homegrown renewables and other zero- and low-carbon energy sources.

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3. 15 The IDB will be placed within the governance of the future European Competitiveness Fund to ensure that both funding instruments are complementary. The European Competitiveness Fund will also support decarbonisation of EIIs. Considering the high investment needs of those sectors both instruments are needed but should be designed as complementary in supporting technological development, types of instruments offered and role in the project’s investment journey. This will be also facilitated by the common governance framework. 16 EASA, European Aviation Environmental Report, 2025 https://www.easa.europa.eu/en/domains/environment/eaer/downloads#download-2025. 17 Source: Figure 76, Direct CO2 emissions from the EU transport sector by mode, Annex 8, Climate Target Impact Assessment, and Section 1.5.5, page 97.

   Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE..., page 6 (EN)

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