Net-zero industry act [EU Legislation in Progress]
The Net-Zero Industry Act is a component of the Green Deal Industrial Plan, which focuses on establishing a stable and simplified regulatory environment. The objective is to attract investments in the production capacity of key products that contribute to the European Union's climate neutrality goals. This act aims to enhance the competitiveness and resilience of the EU's net-zero technology industrial sector, which will serve as the foundation for an affordable, reliable, and sustainable clean energy system.
By accelerating the development and production of net-zero technologies, the Act also aims to mitigate the risk of replacing dependence on Russian fossil fuels with other strategic dependencies that could hinder access to crucial technologies and components for the green transition.
The regulation covers products, components, and equipment necessary for the manufacturing of net-zero technologies. It distinguishes between net-zero technologies and strategic net-zero technologies. The latter play a significant role in decarbonization by 2030 and are either commercially available or expected to enter the market soon. While all net-zero technologies benefit from the provisions in this regulation, strategic net-zero technologies enjoy additional advantages. These include benefiting from resilience criteria in auctions and the possibility of being designated as Net-Zero strategic projects, which grants them priority status and shorter timelines.
The selection of such projects is based on three criteria: technology readiness level, contribution to decarbonization and competitiveness, and resilience of the energy system.
The list of technologies covered by the Act includes:
- Solar photovoltaic and solar thermal technologies
- Onshore and offshore renewable technologies
- Battery/storage technologies
- Heat pumps and geothermal energy technologies
- Electrolysers and fuel cells
- Sustainable Biogas/Biomethane technologies
- Carbon Capture and Storage (CCS) technologies
- Grid technologies
The proposal sets a benchmark for the manufacturing capacity of strategic net-zero technologies to meet at least 40% of the EU's annual deployment needs by 2030. This benchmark provides manufacturers and investors with predictability, certainty, and long-term signals, enabling them to track progress. To facilitate carbon capture and storage projects and increase the availability of CO2 storage sites, the Act also aims to create a supportive framework.
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