European Parliament's adoption of the Net-Zero Industry act: What is it?

Published: 24 Nov 2023

Earlier this week the European Parliament, EP, adopted its position on the Net-Zero Industry Act (NZIA). Initially proposed on 16th March 2023. It aims to boost clean technologies in Europe which is an essential step to reach 2030 and 2050 climate targets. It shows the EU's commitment in leading the way to deliver on the Fit-for-55 and REPowerEU objectives. This comes following critiques that Europe is lagging behind in its deployment of clean energy technologies. Following this adoption, the EP will enter into negotiations with the Council to decide the final shapes of the law.

Climate Techs and other companies have already been in the process of developing these clean energies, and this Act is just the push they needed to scale up production.

Objectives of the Act

The objectives of this Act are foremost, to support the European manufacturing capacity in the face of the increase development of clean energy technologies. As part of the European Green Deal, this Industry Act aims to provide a basis to create an affordable, reliable and sustainable clean energy system. Once the European industry can showcase these traits it will increase the competitiveness and resilience of the EU industry as a whole in the face of future challenges and developments within the energy sector. It mentions the specific goal to promote the following technologies:

• Solar photovoltaic

• Solar thermal technologies

• Onshore wind and offshore renewable technologies

• Battery/storage technologies

• Others...

With the start of the war in Ukraine in early 2022, the EU has noticed the danger of its energy dependency on Russian fossil fuels. Therefore, a second objective is to boost energy security by avoiding energy dependency on non-European countries. This Act also encourages to scale up clean energy production within the EU to avoid any dangers of energy dependency in the future, given the unstable world order.

The third objective, concern carbon removal. The act sets a target that the EU should have the capacity to store at least 50 million tonnes of CO2 by 2030. Currently, there are many Climate Tech companies who specialise in carbon removal techniques, such as UNDO, Climeworks, and Carbon Clean amongst many others.

Along with the encouragement of the development of clean energy industries, comes the development of the skilled workforce. Indeed, rules enforced by EU will enable strategies to train and education workers to be ready for the new technologies. Therefore, European Vocational Education and training systems need to be prepared for the requirements of future industries. People need to have the required theoretical and practical training to successfully support the move to a Net-Zero future.

Reactions

Despite, the encouragements this new brings towards reaching Net-Zero industry targets, some industries are not fully satisfied. NZIA aims to provide competitiveness to EU's clean energy industry at the expense of Chinese and American competitors.

Indeed, SolarPower Europe, a Brussels-based organisation which aims to ensure that more energy is generated by solar, are disappointed about the pre-qualification criteria on local content. This criteria means that technologies that are not produced within Europe are not able to participate in public auctions. This crushes down the hopes of the company who strong advocates that Europe must be part of a globalised supply chain in order to meet climate targets.

Bibliography:

• Net Zero Industry Act: boosting clean technologies in Europe | News | European Parliament (europa.eu)

• Top 10: Leading Carbon Capture Companies | Energy Magazine (energydigital.com)

• EU Parliament’s vote on Net-Zero Industry Act prompts mixed reactions – pv magazine International (pv-magazine.com)

• European Parliament beefs up EU's answer to US and Chinese clean tech competition | Recharge (rechargenews.com)