The EU Council on 27.05.2024 NZIAthe "Net Zero Industry Act", also known as the "Net Zero Industry Act". The regulation is intended to reduce the industrial use of Net-zero technologies It is intended to promote the measures necessary to achieve the EU’s climate goals. It is said to be one of the cornerstones of a new industrial policy. Moreover, it is intended to help Europe take the lead in the global race for green technologies. At the same time, it is intended to reduce dependencies and create jobs.
Background and objectives of the NZIA
The European Commission proposed the Net-Zero Industry Act (NZIA) already on March 16, 2023. The NZIA aims to strengthen European manufacturing capacity for net-zero technologies. It is also intended to remove barriers to the expansion of this capacity. The measures in the regulation are intended to increase the competitiveness of the industrial base for net-zero technologies and to Improving the EU's energy supply. These proposals underline Europe's commitment to playing a leading role in the transition to net-zero technologies. The goals of "Fit-for-55" and REPowerEU are to be achieved.
Overview of the Net-Zero Industry Act
The NZIA regulation is part of the „Green Deal Industrial Plan“ and aims to create predictability and certainty for companies. Simplified regulatory environment It promotes investments in the production capacity of products that are crucial to achieving the EU’s climate neutrality goals. The Net-Zero Industry Act aims to increase the competitiveness and resilience of the EU industrial base for net-zero technologies. They are intended to form the backbone of an affordable, reliable, and sustainable clean energy system. A key goal is to minimize dependence on external fossil fuels. Another is to promote key technologies and components for the green transition.
Measures and key points of the Net Zero Industry Act
The NZIA distinguishes between net-zero technologies and strategic net-zero technologies. The difference lies primarily in their role in planning and implementing climate protection measures. Strategic net-zero technologies are specific technological approaches. The EU integrates and prioritizes them specifically in long-term climate protection strategies to achieve systematic and far-reaching changes. These technologies are embedded in comprehensive action plans and receive special political and economic support.
Net-zero technologies, on the other hand, encompass all technological solutions that contribute to reducing or neutralizing CO₂ emissions. They do not necessarily need to be integrated into a broader strategy. They will Flexible and in diverse contexts from small local projects to large industrial applications.
Projects are generally evaluated according to their technological maturity, their Contribution to decarbonization and Competitiveness and their Resilience of the energy system selected. The list of technologies is long. It includes photovoltaics, solar thermal energy, onshore and offshore wind energy, battery and storage technologies and geothermal energy. Heat pumps, electrolyzers and fuel cells, biogas/biomethane technologies, carbon capture and storage (CCS) technologies or energy efficiency, e-mobility and grid technologies are also included. The list also includes green hydrogen, fuel cells, sustainable agriculture, recycling and waste prevention.
Creation of investment conditions by NZIA
The NZIA creates the necessary conditions to facilitate investment in net zero technology manufacturing projects and makes it easier for project promoters to establish net zero industrial production. This is achieved through measures such as:
- Reduction the administrative burden by streamlining administrative requirements and facilitating approval procedures
- Securing the Access to information
- Facilitation of the Market access for public Procurement procedure and Auctions and support for private demand by consumers
- Support for innovations through Regulatory freedom
Examples of promotion by NZIA
Specifically, NZIA promotes and supports projects in green infrastructurewhereby funds were invested in the expansion of the Charging infrastructure for electric vehicles and the modernization of electricity grids. Regulatory measures, such as stricter emission limits and the obligation to use more climate-friendly processes, are intended to ensure that companies reduce their emissions.
For example, the NZIA also simplifies the approval process for strategic projects and facilitates market access for strategic technology products, particularly in public procurement or the auctioning of renewable energies. To support the workforce, their qualifications are being improved through net-zero industrial academies and industrial areas with a high concentration ("valleys").
Storage capacities for geological injection of at least 50 million tons of CO₂ per year should be available in the EU by 2030. Research and innovation in this area will also be promoted to ensure that Europe remains a global leader.
Another aim of the NZIA is to protect the competitiveness of European industry. Special measures are intended to ensure that European companies are not disadvantaged in global competition because they have to comply with stricter environmental regulations. One example of this is CBAMthe CO₂ border adjustment system. The transition to a climate-neutral industry should also lead to the creation of new jobs in green technologies and industries.
Progress in achieving the objectives of the law is measured on the basis of two benchmarks. Firstly, production capacity for net-zero technologies such as photovoltaic panels, wind turbines, batteries and heat pumps must reach 40 percent of the EU's deployment needs. Secondly, a concrete target is set for a higher EU share of these technologies to reach 15 percent of global production by 2040.
Conclusion
The decision on the Net-Zero Industry Act (NZIA) is a significant step by the EU to promote the industrial use of net-zero technologies and achieve climate targets. Through targeted incentives and investments in green projects as well as regulatory measures, the NZIA creates a predictable and simplified environment for companies. The regulation supports the development and deployment of technologies to reduce greenhouse gas emissions and strengthens Europe's competitiveness in the global race for green technologies.
The NZIA measures are aimed at overcoming obstacles to the expansion of production capacities in Europe. The Act promotes the qualification of the workforce and ensures the creation of new jobs in green industries. The establishment of geological CO₂ storage capacities and support for strategic technologies will strengthen the resilience and sustainability of the European energy system.