The EU Council gives final approval to the Net Zero Industry Act aimed at strengthening key manufacturing sectors

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

The Council of the European Union has adopted a regulation on measures to strengthen the net zero manufacturing ecosystem, better known as the Net Zero Industry Act. As announced, the directive, which will finally enter into force, aims to stimulate the industrial deployment of net-zero technologies needed to achieve the EU’s climate goals and position it as a leader in green industrial technologies.

The regulation is intended to reduce the dependencies of the 27-nation bloc, strengthen its strategic autonomy and help economic growth and job creation.

Together with the controversial Critical Raw Materials Act – CRMA and the reform of the electricity and gas markets, NZIA fits into the Green Deal Industrial Plan, which the European Commission formally launched in February last year. At the same time, it is a response to the huge subsidies for decarbonization in the United States under the Inflation Reduction Act, which has been in force for over a year and a half, and to China’s domination in many sectors around the world and in Europe.

Supporting green technologies

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

The implemented solutions aim to improve the skills of the European workforce and support innovation.

The EU aims to achieve a 15% share of global production in the net zero sector by 2040

The EU’s production capacity target for net zero technologies such as solar panels, wind turbines, batteries and heat pumps is to reach 40% of national demand. The second goal is to increase the share to 15% of global production by 2040.

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

Preventing dependence on external actors

The European Commission said that by creating a uniform and predictable business environment for the clean technology manufacturing sector, the regulation will increase the competitiveness and resilience of the country’s industrial base and support the creation of high-quality jobs and a skilled workforce.

“By boosting domestic production of net zero technologies in the EU, NZIA will reduce the risk that we replace dependence on fossil fuels with technological dependence on external actors,” he added.

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

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