The Net-Zero Industry Act (NZIA) creates a regulatory framework to boost the competitiveness of EU industry and technologies crucial for decarbonisation.
The Net-Zero Industry Act aims to enhance European manufacturing capacity for net-zero technologies and their key components, addressing barriers to scaling up production in Europe. The Regulation will increase the competitiveness of the net-zero technology sector, attract investments, and improve market access for clean tech in the EU. This supports the clean energy transition and improves the EU’s energy resilience.
The Act sets a goal for net-zero manufacturing capacity to meet at least 40% of the EU’s annual deployment needs by 2030, providing predictability, certainty and long-term signals to manufacturers and investors. By 2030, the act aims to create a Union market for CO2 storage services. It sets a Union-level goal and mandates an annual CO2 storage capacity of at least 50 million tonnes.
Overview of the Net-Zero Industry Act
Scope of application
The NZIA encompasses final products, components, and machinery necessary for manufacturing net-zero technologies, including
- Solar photovoltaic and solar thermal technologies
- Onshore and offshore renewable technologies
- Battery/storage technologies
- Heat pumps and geothermal energy technologies
- Hydrogen technologies, including electrolysers and fuel cells
- Sustainable biogas/biomethane technologies
- Carbon capture and storage (CCS) technologies
- Grid technologies
- Nuclear fission energy technologies, including nuclear fuel cycle technologies
- Sustainable alternative fuels technologies
- Hydropower technologies
- Other renewable energy technologies
- Energy system-related energy efficiency technologies, including heat grid technologies
- Renewable fuels of non-biological origin technologies
- Biotech climate and energy solutions
- Other transformative industrial technologies for decarbonisation
- CO2 transport and utilisation technologies
- Wind propulsion and electric propulsion technologies for transport
- Other nuclear technologies
The Act also covers manufacturers in energy-intensive industries like steel, chemicals, and cement that produce components used in net-zero technologies and invest in decarbonisation.
Enhancing skills
A sizeable skilled workforce is key for net-zero technology manufacturing. The Act establishes Net-Zero Industry Academies to develop learning content for education and training providers in EU countries. These academies will develop learning credentials to facilitate the mobility of learners and the portability of qualifications in regulated professions. Each academy will focus on one net-zero industry technology and aim to train 100.000 learners each within three years of establishment.
Enabling net-zero industries in the EU
European industries with hard-to-abate CO2 emissions face significant uncertainties due to the lack of geological CO2 storage sites. The EU’s target of 50 million tonnes of annual CO2 injection capacity by 2030 aims to address this by coordinating investments in a European net-zero CO2 transport and storage value chain to decarbonise industrial operations. To reach this target, EU oil and gas production licensees must invest and use their assets, skills and knowledge to make CO2 capture a reliable industrial carbon management solution.
Net-zero strategic project status
The Act allows for the establishment of net-zero strategic projects, essential for enhancing the resilience, strategic autonomy, and competitiveness of the EU’s net-zero industry. Net-zero strategic projects receive additional advantages, such as ‘priority status' at national level, faster permitting, focused attention in the Net-Zero Europe Platform (including financing advice), and urgent treatment in judicial and dispute resolution procedures, in line with national and EU laws.
Net-zero technology manufacturing projects can apply for this status through a dedicated application process available via this website from the end of July 2024.
New mandatory rules in in public procurement, auctions and other schemes
The Net-Zero Industry Act boosts demand for renewable energy by implementing mandatory non-price criteria in procurement procedures for clean technologies and renewable energy auctions. Public authorities must consider criteria such as sustainability, resilience, cybersecurity and other qualitative factors.
For public procurement, sustainability is a minimum mandatory requirement. The resilience criterion requires public buyers to diversify supply sources in cases of high dependency. Authorities must also consider at least one criterion among social sustainability, cyber security and timely delivery obligations.
In renewable energy auctions like solar or wind farms, authorities must evaluate the auction's contribution to sustainability and resilience, cybersecurity, responsible business conduct, and ability to to complete projects on time. These criteria must apply to least 30% of the volume auctioned annually in each EU country or 6 gigawatts, respectively.
The Act also covers public intervention forms, such as support schemes that incentivise households’ and businesses to purchase net-zero technology products, such as schemes supporting rooftop photovoltaics installations on private homes.
Net-Zero Europe Platform
The Net-Zero Industry Act establishes the ‘Net-Zero Europe Platform’, a governance body that comprises the Commission and EU countries to monitor progress, discuss developments, and engage with civil society stakeholders. The platform advises on financing for net-zero strategic projects and engages in international net-zero industrial partnerships to with facilitate global clean energy transition.
See more information on the Net-Zero Europe Platform web page.
Background
President von der Leyen announced the European Green Deal Industrial Plan in January 2023. It outlines how the EU will lead the path to climate neutrality by investing in clean technology and improving investment conditions to safeguard the EU's resilience and competitiveness.
The Green Deal Industrial Plan is based on the following four pillars.
- A predictable and simplified regulatory environment
- Faster access to sufficient funding
- Skills development
- Open trade for resilient supply chains
In response to the plan, the Commission proposed the Critical Raw Materials Act, which accompanies the Net Zero Industry Act to ensure access to vital rare earths for key technologies, and the reform of the electricity market design to let consumers benefit from lower renewable energy costs.
More information
- Net-Zero Strategic Projects website (July 2024)
- Net Zero Industry Act press release
- Net-Zero Industry Act Q&A
- Green Deal Industrial Plan page