European Parliament Green Lights Net-Zero Industry Act

The EU aims to produce 40% of its annual deployment needs in net-zero technologies by 2030


Members of the European Parliament (MEPs) have backed the Net-Zero Industry Act, which aims to fortify Europe’s manufacturing capabilities in crucial technologies essential to meet the climate goals.

The objective of the legislation is to propel Europe to domestically produce 40% of its annual deployment needs in net-zero technologies by 2030, as outlined in the National Energy and Climate Plans. Simultaneously, the legislation envisions capturing 25% of the global market value for these technologies.

Members proposed amendments to expedite authorization procedures and establish net-zero industry clusters to address the challenges associated with scaling up manufacturing capacities in these critical sectors.

They also broadened the scope of the legislation to encompass the entire supply chain, including components, materials, and machinery required for manufacturing net-zero technologies.

The proposed list of technologies is comprehensive and will be periodically updated to stay abreast of advancements. Nuclear fission and fusion technologies, sustainable aviation fuels, and specific industrial technologies have been included.

The legislation maintains two project classifications – net-zero technology manufacturing projects and net-zero strategic projects. It also aims to streamline the permitting process, setting specific timelines for regular and strategic projects to be authorized.

Creating “net-zero industry valleys” initiatives is proposed to expedite the permitting process by involving member states in the environmental assessment evidence collection.

Funding for the legislation is proposed to be sourced from National Emission Trading System revenues and, for most strategic projects, through the Strategic Technologies for Europe Platform .

This aligns with the broader goal of establishing a European sovereignty fund, indicating a significant step towards increased public investment in industry and innovation.

The next phase involves the European Council adopting its position, paving the way for discussions on the final shape of the law.

As Europe strives to meet its 2030 and 2050 climate targets, a considerable amount of clean energy technology is required.

The EU relies on imports for these technologies, prompting the need for the proposed regulation. By setting a benchmark of at least 40% of the EU’s annual deployment needs for strategic net-zero technologies by 2030, the legislation aims to strengthen Europe’s manufacturing capacity in this crucial sector.

To achieve net-zero emissions by 2050 globally, annual wind capacity additions should reach a minimum of 329 GW annually, four times the current deployment levels.

The action plan will also indirectly support other clean power sectors, including the solar industry, given that several of the proposed actions are relevant to all renewable sources. This is a necessary move after the EU Parliament voted to boost the domestic renewable energy share to 42.5% by 2030 in October.

Europe’s power industry recently called for ramping up investments in aging grid infrastructure by 84% annually until 2050. According to Eurelectric, which represents the interests of the European electricity industry, the grid infrastructure is ill-suited for accommodating decentralized renewables, electric vehicles, and smart grids.