The EU passes a law strengthening the clean energy production sector

The European Council adopted the Net Zero Industry Act (NZIA), providing a framework to enable the European Union’s manufacturing sector to meet 40 percent of the region’s annual demand for the deployment of clean energy technologies by 2030.

The aim of the legislation is also to increase the share of the 27-member bloc in the global market for this type of technology to 15% by 2040.

It simplifies the project permitting process, establishes an auction to award contracts, and creates skills training platforms to secure the supply of needed labor.

“The regulation aims to stimulate the industrial deployment of net-zero emissions technologies that are needed to meet the EU’s climate goals, by using the power of the single market to strengthen Europe’s position as a leader in green industrial technologies,” the Council said in a statement.

In terms of permitting, Member States designate a single national authority to oversee the conduct of reviews or impact studies, resolve disputes, consider documentation requirements and issue permits.

The regulation also obliges contracting authorities to base the award of contracts “in public procurement proceedings on the most economically advantageous offer, which should take into account the best price-quality ratio, including at least the offer’s contribution to durability and resistance,” we read in the text of the proposal. .

To help ensure labor availability, the regulation calls for the creation of Net Zero European Vocational Academies. These academies are designed to develop educational programs and materials related to the development, production, installation, commissioning, operation, maintenance and recycling of net zero technologies.

In addition to the regional regulatory framework, “Member States may, on their own initiative, establish net-zero regulatory sandboxes, enabling the development, testing and validation of innovative net-zero technologies in a controlled real-world environment for a limited time before they are placed on the market or put into service, improving in thereby gaining regulatory knowledge and potentially scaling up and implementing more widely,” as stated in the text of the proposal.

In addition, the Net Zero Industry Act establishes an annual capacity to inject at least 50 million metric tons of carbon dioxide by 2030 using storage sites within the Union, in exclusive economic zones or on the continental shelf. Oil and gas companies will receive mandatory contributions to meet the injection target.

The regulation was proposed for 2023 as part of the EU’s Green Industrial Plan, a package of manufacturing-focused initiatives to support the region’s goal of climate neutrality by 2050. The European Council and Parliament reached a provisional agreement on the legislative proposal on 6 February 2024.

“The Act creates the best conditions for those sectors that are key for us to achieve net zero by 2050.” – said the President of the European Commission, Ursula von der Leyen, in a statement. “Demand is growing in Europe and globally, and we are now equipped to better meet this demand with supplies from Europe.”

EU Commissioner for the Internal Market, Thierry Breton, said: “NZIA sets ambitious targets to scale up our clean technology production capacity by 2030.”

“Because without industrial production, we risk becoming net importers, losing jobs and re-creating dependencies that we do not want to recreate after the experience with Russian gas,” Breton added.

“Strategy was the easy part – now it’s implementation and results on the ground that count. Based on my on-site visits to European regions and conversations with Member States, financial institutions and industry, I am confident that Europe is ready to attract and accelerate investment.”

Before the introduction of the Net Zero Industry Act, EU member states were already ordered to set an indicative target for “innovative renewable energy technology” to represent at least five percent of newly installed renewable capacity by 2030.

This target is part of the Renewable Energy Directive adopted on 9 October. It sets a binding target for the share of renewable energy sources in the bloc’s energy mix to be 42.5 percent by the end of this decade, up from 32 percent.

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