EU Targets 40% Domestically Made Green Technology Use by 2030

EU Adopts Net-Zero Industry Act to Boost Green Industry and Manufacturing

February 15, 2024


The European Union (EU) has reached a provisional agreement on legislation aimed at boosting the bloc’s production of green technologies needed to achieve its goal of cutting carbon emissions by at least 55% by 2030 compared to 1990 levels.

The legislation called the “Net-Zero Industry Act” (NZIA) is intended to support domestic manufacturing of key technologies like solar panels, wind turbines, batteries, and carbon capture. The goal is to use domestically produced green technology to cover 40% of the EU’s needs by 2030.

Under the deal struck between the European Council and Parliament, projects identified as having a high potential to cut emissions will benefit from faster permitting for construction and expansion. For large projects over 1 GW, permitting time will be limited to 18 months, while smaller projects will get decisions within 12 months. Even faster timelines are envisioned for strategic projects.

The law will also promote “industrial valleys” that concentrate multiple companies in one technology sector in the same region.

Members of the European Parliament had proposed amendments to the act last year to expedite authorization procedures and establish net-zero industry clusters.

On public procurement, the act will introduce mandatory sustainability criteria, allowing factors beyond price to be considered for the tenders. The factors may include the product’s climate impact, ease of repair, recycling, and microplastic release, among others.

Additionally, in order to reduce reliance on a single source, the act will consider the procurement “not diverse enough” if one source supplies over 50% of the demand for a specific net-zero technology and its components.

These criteria will have to apply to at least 30% of the volume auctioned every year per member state.

However, if the sustainability or diversification criteria result in a disproportionate cost difference or if no suitable tenders have been submitted, contracting authorities may decide to forego the requirements.

The proposal, which still needs formal approval by the Parliament and the Council, also aims to improve the skills of European workers in the clean-tech industry by starting net-zero industry academies, and it plans to establish a platform to coordinate EU’s efforts in this field.

However, the NZIA’s efforts to spur home-grown production may be thwarted by foreign competition. Last year, the European solar manufacturing industry, represented by SolarPower Europe, wrote to the European Commission highlighting how Chinese photovoltaic manufacturers were intentionally undercutting prices and pushing many European PV manufacturers towards insolvency.