Council of EU gives final approval to Net Zero Industry Act to bolster key manufacturing sectors

By paving the way, with the Net Zero Industry Act (NZIA), for a unified and predictable business environment for the clean tech manufacturing sector, the EU aims to increase the competitiveness and resilience of its industrial base and support quality jobs creation and a skilled workforce.

The Council of the European Union adopted a regulation on measures for strengthening the net zero technology manufacturing ecosystem, better known as the Net Zero Industry Act. Finally coming into force, it aims to boost the industrial deployment of net zero technologies needed to achieve the EU’s climate and energy goals and position it as a leader in industrial green technologies, according to the announcement.

The regulation is envisaged to reduce the 27-member bloc’s dependencies, reinforce its strategic autonomy and help growth and job creation.

Together with the controversial Critical Raw Materials Act – CRMA and the electricity and gas market reform, NZIA is part of the Green Deal Industrial Plan, which the European Commission formally launched in February of last year. At the same time, it is a response to massive subsidies for decarbonization in the United States through its Inflation Reduction Act, which is more than a year and a half old already, and to China’s dominance worldwide and in Europe in a range of sectors.

Boosting green technologies

In marathon negotiations, the European Parliament, European Commission and Council of the EU agreed to introduce favorable conditions for investment in green technologies. NZIA simplifies the permit-granting process for strategic projects and facilitates market access for strategic technology products.

The enacted measures are supposed to enhance the skills of the European workforce and foster innovation.

The EU aspires to reach a 15% share of world production in the net zero sector by 2040

The target for the EU’s manufacturing capacity of net zero technologies such as solar panels, wind turbines, batteries and heat pumps is to reach 40% of the domestic needs. The other objective is to increase the share to 15% of world production by 2040.

The Net Zero Industry Act sets up an annual injection capacity of at least 50 million tonnes of carbon dioxide to be achieved by 2030 in geological storage sites in the EU.

Preventing dependence on external actors

By creating a unified and predictable business environment for the clean tech manufacturing sector, the regulation will increase the competitiveness and resilience of the domestic industrial base and support quality jobs creation and a skilled workforce, the European Commission said.

“By boosting the EU domestic production of net-zero technologies, NZIA will reduce the risk that we replace fossil fuel dependencies by technology dependencies on external actors,” it added.

Member states can now support net zero technologies such as photovoltaics, wind, heat pumps, nuclear energy, hydrogen, battery energy storage and grid solutions by establishing strategic projects. Energy-intensive industries like steel, chemicals and cement that produce components used in net zero technologies and invest in decarbonization can also be supported.