The Net-Zero Industry Act (NZIA), aimed at supporting the production of key technologies necessary for Europe to achieve its climate and energy goals, has been approved. Initially proposed by the European Commission in March 2023, the NZIA was approved by Members of the European Parliament on April 26, 2024, with 361 votes in favor and 121 against.
The NZIA is a key element of the European Green Deal Industrial Plan strategy, aiming to enhance the competitiveness of Europe’s net-zero industries and support the European Union’s (EU) transition to climate neutrality. The NZIA supports the critical components of various strategies and initiatives intended to boost the competitiveness of the EU’s net-zero industries and support the EU’s transition to climate neutrality.
The NZIA aims to prevent Europe from falling behind in a rapidly evolving market as major government initiatives are developed to facilitate the net-zero transition. Work on this initiative was accelerated by the passage of the US Inflation Reduction Act, which allocated approximately $270 billion through grants and subsidies.
The NZIA contains a series of measures aimed at increasing the production of technologies that are key to achieving climate neutrality. It sets a target for at least 40% of the annual deployment needs for strategic net-zero technologies to be produced within the EU by 2030.
The law supports 19 specific technologies, including solar photovoltaics and solar thermal technologies, onshore wind and offshore renewable energy, batteries and storage, heat pumps and geothermal energy, electrolyzers and fuel cells, biogas/biomethane, carbon capture and storage, and grid technologies.
To help scale up these essential technologies, the targeted actions include:
- Streamlining permitting processes,
- Setting a goal of achieving 50 million tons of annual CO2 storage capacity by 2030,
- Introducing sustainability and flexibility criteria in public procurement and tenders, along with actions to support specific demand, with requirements for oil and gas producers to contribute to this goal,
- Establishing “Net-Zero Industry Academies” to support the development of a net-zero-skilled workforce,
- Creating “regulatory sandboxes” to allow EU member states to establish temporary regulatory regimes for the development, testing, and validation of potential new net-zero technologies,
- Forming a Net-Zero Europe Platform to coordinate actions and share information between member states and the European Commission.
The NZIA also aims for the EU to produce at least 40% of the annual needs for technologies required to meet the 2030 climate and energy targets and to capture 15% of the global market value for these technologies.
Next Steps
Following the completion of the vote, the legislation must also be approved by the European Council to enter into force.