The EU is finalizing the Green Deal Industrial Plan while the Net Zero Industry Act awaits the green light

The European Union’s Net Zero Industry Act is about to come into force, completing the legislative work within the Green Deal Industrial Plan package. It consists of measures to decarbonize the economy, energy market reforms and the pursuit of strategic autonomy over key raw materials and technologies.

The Council of the European Union is set to approve the Net Zero Industry Act, NZIA, as the European elections are just five weeks away. The European Parliament adopted it with 361 votes in favor and 121 against, with 45 abstentions. The two institutions reached a provisional agreement in February.

The idea behind the Net Zero Industry Act is to boost EU production in technologies needed for decarbonizing the economy. It aims to achieve a domestic share of 40% of the annual deployment needs of net-zero technologies by 2030, based on National Energy and Climate Plans (NECPs), and capture 15% of the global market value for the technologies.

NZIA will simplify the permitting process and set maximum timelines for project approval

The law covers the entire supply chain: components, materials and machines, for an extensive list of technologies.

Renewables, nuclear energy (including nuclear fission), industrial decarbonisation, networks, energy storage technologies, sustainable aviation fuels (SAFs), carbon capture and biotechnology are all eligible for support. The law will simplify the permitting process and set maximum deadlines for approving projects depending on their scope and output, the European Parliament said.

The agreement provides for the creation of so-called net zero acceleration valleys, speeding up the permitting process by delegating parts of the evidence collection for environmental assessments to member states.

Sustainability, resilience criteria

National support schemes aimed at helping households and consumers switch more quickly to technologies such as solar panels and heat pumps will have to take sustainability and resilience criteria into account. Members of the European Parliament who negotiated the law explained that public procurement procedures and auctions for the deployment of renewable energy sources must also meet such criteria, albeit under conditions to be determined by the European Commission, and for a minimum of 30% of the auctioned volume per year. per year in the Member State, or otherwise for a maximum of 6 GW auctioned per year and per country.

Ehler: To achieve all our economic, climate and energy ambitions, we need industry in Europe

The legislation will encourage financing from national revenues from the Emissions Trading System (ETS) and for most strategic projects through the Strategic Technologies for Europe Platform (STEP), and it is a step towards the envisioned European Sovereignty Fund, lawmakers stressed.

“This vote is good news for European industry and sets the tone for the next term. To achieve all our economic, climate and energy ambitions, we need industry in Europe. This law is the first step in making our market fit for this purpose,” said EU member Christian Ehler.

Much delayed response to US subsidies, China’s industrial power

NZIA is part of the Green Deal Industrial Plan, which the European Commission formally launched in February last year. It includes the Critical Raw Materials Act (CRMA) and electricity market design reform. The package is also in line with other initiatives: the Fit-for-55 package, the European Green Deal and the REPowerEU plan.

The government in Brussels plans to facilitate an increase in clean energy technology capacity needed to achieve the 2030 and 2050 climate goals. The EU largely imports such equipment.

NZIA is simultaneously the response to the United States’ massive decarbonization subsidies through the Inflation Reduction Act, which is more than a year and a half old, and to China’s dominance globally and in Europe in a range of sectors.

Post views: 1