Aim is to make EU internal market fit for industrial decarbonisation

The bill supports manufacturing of key technologies needed for EU’s climate and energy objectives

Faster permitting procedures and establishing net-zero industry valleys

New criteria for public procurement procedures, auctions for renewable energy sources

On Thursday, Parliament approved the Net-Zero industry Act to bolster EU production in technologies needed for decarbonisation.

The "Net-Zero industry Act", already informally agreed upon with the Council, sets a target for Europe to produce 40% of its annual deployment needs in net-zero technologies by 2030, based on National Energy and Climate Plans (NECPs) and to capture 15% of the global market value for these technologies.

Technologies to be supported include all renewable technologies, nuclear, industrial decarbonisation, grid, energy storage technologies, and biotech. The law will simplify the permitting process, setting maximum timelines for projects to be authorised depending on their scope and output.

The agreement provides for the creation of "Net-Zero Acceleration Valleys" initiatives, speeding up the permitting process by delegating parts of the evidence collection for environmental assessments to member states.

Sustainability and resilience criteria

National support schemes aiming to get households and consumers to move over to technologies such as solar panels and heat pumps more quickly will have to take into account sustainability and resilience criteria. Public procurement procedures and auctions to deploy renewable energy sources should also meet such criteria, albeit under conditions to be defined by the Commission, and for a minimum of 30% of the volume auctioned per year in the member state, or alternatively for a maximum of six Gigawatt auctioned per year and per country.

The legislation will encourage funding from national Emission Trading System (ETS) revenues and for most strategic projects through the Strategic Technologies for Europe Platform (STEP), and it is a step towards a European Sovereignty fund.

Quote

“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”, said lead MEP Christian Ehler (EPP, DE).

Next steps

The legislation was adopted with 361 votes to 121, with 45 abstentions. It will now have to be formally adopted by Council in order to become law.

Background

A considerable amount of clean energy technology is needed to support reaching Europe’s 2030 and 2050 climate targets. Europe largely imports these technologies, and many non-EU countries have stepped up their efforts to expand their clean energy manufacturing capacity.

Conference on the future of Europe

The "Net Zero Industry Act" aligns with the conclusions of the Conference on the Future of Europe through several key proposals and measures.. Specifically, the Act reflects Proposal 3 (measures 1, 3, 5, 6), Proposal 11 (measure 1), Proposal 12 (measure 5), Proposal 17 (measure 1), and Proposal 18 (measure 2), which collectively aim to foster a sustainable, resilient, and independent energy framework within the EU.