Net-Zero Industry Act makes the EU the home of clean tech manufacturing and green jobs

This article is brought to you in association with the European Commission.

The Commission welcomes the final adoption of the Net-Zero Industry Act (NZIA) today, which puts the EU on track to strengthen its domestic manufacturing capacities of key clean technologies. By creating a unified and predictable business environment for the clean tech manufacturing sector, NZIA will increase the competitiveness and resilience of the EU’s industrial base and support quality jobs creation and a skilled workforce.

President of the European Commission, Ursula von der Leyen, said: “With the Net-Zero Industry Act, the EU has now a regulatory environment that allows us to scale up clean technologies manufacturing quickly. The Act creates the best conditions for those sectors that are crucial for us to reach net-zero by 2050. Demand is growing in Europe and globally, and we are now equipped to meet more of this demand with European supply.”

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. This will in turn help to make our energy system cleaner and more secure, with affordable and home-produced clean energy sources replacing volatile fossil fuel imports.

Main measures of the Act

For the EU to become a leader in the clean tech sector, NZIA sets a benchmark for the manufacturing capacity of strategic net-zero technologies to meet at least 40% of the EU’s annual deployment needs by 2030. The benchmark provides predictability, certainty and long-term signals to manufacturers and investors and allows progress to be tracked. To support carbon capture and storage projects and increase the availability of CO₂ storage sites in Europe, NZIA also sets a target of 50 million tonnes of annual injection capacity in EU geological CO₂ storage sites by 2030.

In addition to setting objectives, the new regulation improves the conditions for investment in net-zero technologies by simplifying and accelerating permitting procedures, reducing administrative burden and facilitating access to markets. Public authorities will have to consider sustainability, resilience, cybersecurity and other qualitative criteria in procurements procedures for clean technologies and auctions for the deployment of renewable energy. Member States will be able to support a set of net-zero technologies such as solar photovoltaic, wind, heat pumps, nuclear technologies, hydrogen technologies, batteries and grid technologies by establishing ‘strategic projects’ which would benefit from priority status at national level, shorter permitting timelines and streamlined procedures.

Energy-intensive industries such as steel, chemicals or cement that produce components that are used in these net-zero technologies and that invest in decarbonisation can also be supported via the measures in the Act. The creation of Net-Zero Acceleration Valleys will further facilitate the establishment of clusters of net-zero industrial activity in the EU.

NZIA includes measures for investment in education, training and innovation with the establishment of Net-Zero Industry Academies to train 100,000 workers within three years and support the mutual recognition of professional qualifications. Regulatory sandboxes will be established for testing innovative net-zero technologies under flexible regulatory conditions. Finally, the Net-Zero Europe Platform will serve as a central coordination hub, where the Commission and EU countries can discuss and exchange information as well as gather input from stakeholders.

Background

The Net-Zero Industry Act was announced by President von der Leyen as part of the Green Deal Industrial Plan presented on 1 February 2023. The Plan set out how the EU will sharpen its competitive edge by scaling up the EU’s manufacturing capacity for net-zero technologies and products required to meet the EU’s ambitious climate targets. The Commission presented the NZIA proposal on 16 March 2023, alongside the Critical Raw Materials Act (CRMA) and the reform of the electricity market design. The European Parliament and Council reached a provisional agreement on 6 February 2024 and Parliament voted on the legislation on 25 April 2024. The Council vote today is the final step in the legislative process. The Act will enter into force 1 day after the publication in the Official Journal which is expected towards the end of June.

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*Updated on 27/05/2024 at 15:00

Quote(s)

With the Net-Zero Industry Act, the EU has now a regulatory environment that allows us to scale up clean technologies manufacturing quickly. The Act creates the best conditions for those sectors that are crucial for us to reach net-zero by 2050. Demand is growing in Europe and globally, and we are now equipped to meet more of this demand with European supply.

Ursula von der Leyen, President of the European Commission

With the final adoption of the Net-Zero Industry Act, we further simplify and accelerate permitting procedures and reduce administrative burdens. This will equip the EU with a robust framework to foster innovation and enhance competitiveness in the transition to a sustainable economy, for the benefit of all Europeans.

Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age

The European Green Deal is our growth strategy, and it needs competitive European industries to thrive in the clean tech markets of the future. The Net Zero Industry Act will guarantee European support to a wide range of strategic and critical sectors, helping them to develop their markets, train and recruit European workers, and compete on a level playing field with international competitors. The rapid negotiation and adoption of this Commission proposal shows that Europe is ready to react to global challenges and support its industry and workers to deliver together the European Green Deal.

Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight

With the Net Zero industry Act, the EU aims to lead in the booming clean tech market – for the sake of our climate neutrality, but also for European competitiveness, jobs, energy security, and economic and political resilience. The NZIA sets ambitious objectives to multiply our clean tech manufacturing capacity by 2030. Because without industrial production, we risk becoming net importers, losing jobs, and re-creating dependencies that we do not wish to reproduce after the Russian gas experience. The strategy was the easy part – what matters now is implementation and results on the ground. And I am confident, based on my on-site visits across European regions and discussions with Member States, financial institutions and industry, that Europe is ready to attract and accelerate investment. The Commission is determined to offer all support to make NZIA a success story.

Thierry Breton, Commissioner for Internal Market

The energy crisis taught us a key lesson: we must avoid any dependency on a single supplier. With the Net-Zero Industry Act, Europe will be well equipped with a stronger industrial base to achieve the clean energy transition. Through easier and faster permitting for manufacturing projects, support for innovation and skills and better market access for high-quality clean tech products, we will make sure European clean tech manufacturers can compete on a level playing field. This will ensure we can reach our ambitious renewables and energy efficiency targets for 2030 while maintaining our industrial competitiveness.

Kadri Simson, Commissioner for Energy