EU Adopts Net-Zero Industry Act to Bolster Clean Technology Manufacturing.

The European Commission has announced the final adoption of the Net-Zero Industry Act (NZIA), marking a significant step in the European Union’s (EU) endeavour to enhance its domestic manufacturing capabilities in key clean technologies. This legislation aims to provide a streamlined and predictable business environment for the clean tech sector, thereby augmenting the EU’s industrial competitiveness and resilience. It is also designed to support the creation of quality jobs and cultivate a skilled workforce within the EU.

The NZIA is centred around reducing the EU’s dependence on fossil fuels and external technological inputs, with a strategic focus on boosting domestic production of net-zero technologies. This approach is anticipated to facilitate a cleaner, more secure energy system within the EU, characterised by an increased reliance on locally produced, clean energy sources.

A core component of the NZIA is the establishment of benchmarks for domestic manufacturing capacity. By 2030, the EU aims to fulfil at least 40% of its annual needs for strategic net-zero technologies through internal production. This target is supported by a goal to achieve 50 million tonnes of annual CO2 injection capacity in geological storage sites across the EU by the same year.

The NZIA also introduces regulatory measures aimed at enhancing investment in net-zero technologies. These include the simplification of permitting procedures, reduction of administrative burdens, and improvement of market access. The legislation encourages member states to promote a variety of net-zero technologies through the identification of ‘strategic projects’, which will enjoy benefits such as priority status and expedited permitting processes. Support is also extended to energy-intensive industries that invest in decarbonisation efforts.

Furthermore, the Act facilitates the development of Net-Zero Acceleration Valleys to promote clusters of net-zero industrial activity. It emphasises the importance of workforce development, with the establishment of Net-Zero Industry Academies to train 100,000 workers over three years and support the mutual recognition of professional qualifications. Additionally, regulatory sandboxes will be created to test innovative net-zero technologies under flexible conditions.

The NZIA is positioned as a key component of the broader Green Deal Industrial Plan, introduced by European Commission President Ursula von der Leyen in February 2023. Following a provisional agreement reached by the European Parliament and Council and subsequent legislative approvals, the Act is set to enter into force, contributing to the EU’s strategic objectives of achieving net-zero emissions by 2050.

Image: EC – Audiovisual Service. Bogdan Hoyaux. © European Union, 2024

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