Core Insights - The Industrial Decarbonisation Accelerator Act (IDAA) is set to be the most stringent market access policy in recent years, causing significant market reactions, particularly in the renewable energy sector [2][3] - The IDAA reflects a shift in global resource competition from "market for technology" to "rules for technology," emphasizing the need for companies to enhance core technology independence and supply chain resilience [2][12] Summary by Sections IDAA Overview - The IDAA is not the first EU policy targeting Chinese renewable manufacturers, following previous regulations like the New Battery Regulation and the Critical Materials Act, aimed at establishing a European self-sufficient standard system [3][4] - The IDAA introduces unprecedented requirements, including mandatory technology sharing, local content thresholds, and control over corporate governance, marking a significant escalation in market access barriers [5][6] Impact on Chinese Manufacturers - European markets have become a profit center for Chinese energy storage companies, with overseas orders reaching 214.7 GWh in the first three quarters of 2025, a year-on-year increase of over 130% [6] - Companies like Sungrow Power Supply Co., Ltd. have seen substantial overseas revenue, with a gross margin of 40% in Europe, significantly higher than domestic margins [6][7] Strategic Responses - The IDAA's requirements necessitate a shift in business models for companies like Sungrow, which may face increased costs and compliance pressures due to local sourcing mandates [7][9] - Companies are encouraged to localize production in Europe to meet the IDAA's requirements, with the EU aiming for 10% of strategic materials to be mined and 40% processed locally by 2030 [9][10] Long-term Strategies - The IDAA poses a core threat of technology transfer, compelling companies to choose between technology and market access, leading to strategies such as substituting non-core technologies to comply with regulations [10][11] - Companies are exploring new markets in the Middle East and Latin America to mitigate risks associated with European policy changes, while also leveraging their manufacturing and system integration strengths [10][12] Conclusion - The IDAA signifies a profound change in the competitive landscape, presenting both challenges and opportunities for Chinese energy storage firms to enhance their competitiveness and adapt to evolving market conditions [11][12]