Lawmakers in the European Parliament voted 361 – 121 to approve the Net-Zero industry Act (NZIA), a new law aimed at supporting EU manufacturing of key technologies needed to achieve Europe’s climate and energy goals.
The NZIA was initially proposed by the European Commission in March 2023, forming one of the key elements of its Green Deal Industrial Plan strategy to enhance the competitiveness of Europe’s net zero industries, and supporting the EU’s transition to climate neutrality. With the vote completed, the legislation will now need to be approved by the EU Council before entering into force. The vote follows an informal agreement on the legislation earlier this year between Parliament and the EU Council on the new law.
According to the EU Commission, the NZIA was launched as Europe currently imports the technologies necessary to reach its climate and energy objectives, and as major government initiatives globally heat up to grab a stake in the rapidly emerging market to facilitate the net zero transition. The race kicked into high gear with the passage of the U.S.’ Inflation Reduction Act, which allocated nearly $270 billion through a series of tax credits, loans, grants and subsidies to areas including renewable energy and industrial decarbonization solutions.
The new legislation supports a series of 19 specific technologies, ranging from solar photovoltaic and thermal technologies, onshore and offshore renewable energy, and batteries and storage, to heat pumps and geothermal energy, electrolyzers and fuel cells, biogas/biomethane, carbon capture and storage (CCS), nuclear power and grid technologies, and details a series of targeted actions to support their development in the EU, including streamlining permitting processes, setting an objective to reach 50 million tonnes of annual CO2 storage by 2030, and introducing sustainability and resilience criteria in public procurement and auctions, as well as setting up “Net-Zero Industry Academies” to support the development of a net zero skilled workforce.
The NZIA also sets targets for the EU to produce at least 40% of its annual deployment needs for the technologies necessary to achieve the EU’s 2030 climate and energy targets, as well as to capture 15% of the global market value for the technologies.
In the agreement with the EU Council and Parliament, the NZIA was amended to include the promotion of the establishment of net-zero acceleration “valleys,” or areas concentrating several companies involved in specific technologies, in order to create clusters of net zero-focused industrial activity.
Following the vote to adopt the NZIA, lead MEP Christian Ehler said:
“This vote is good news for European industry and sets the tone for the next term. To achieve all our economic, climate and energy ambitions, we need industry in Europe. This Act is the first step to making our market fit for this purpose.”