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Net-zero industry act

In “A Europe Fit for the Digital Age”

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The Commission presented on 1st February 2023 a ‘Green Deal industrial plan for the net-zero age’. The plan sets out a European approach to boost the EU’s net-zero industry. The Commission announced in this plan that it would present a net-zero industry act. 'Net-zero technologies' are key for the EU to achieve climate-neutrality (net-zero emissions, i.e. emissions after deduction of removals) by 2050. 

The proposed regulation would set up the framework of measures for innovating and scaling up the manufacturing capacity of net-zero technologies in the EU, to support the 
EU's 2030 target of reducing net greenhouse gas emissions by at least 55 % 
relative to 1990 levels and the Union’s 2050 climate neutrality target. It would also aim to ensure the EU's access to a secure and sustainable supply of net-zero technologies.

It puts forward measures aimed at ensuring that by 2030, the manufacturing capacity in the EU of the strategic net-zero technologies listed in the annex approaches or reaches at least 40% of the EU's annual deployment needs. These strategic technologies include solar photovoltaic and solar thermal technologies; onshore wind 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 technologies, and grid technologies. 

The proposed regulation would set up enabling conditions for net-zero technology manufacturing ('one stop shop' in Member States, streamlined permitting processes, rules for the selection and implementation of 'net-zero strategic projects' that would be granted priority status to ensure the fastest permitting processes and predictable permitting timelines).

It would also set an EU-level objective for an annual injection capacity of at least 50 million tons of CO2 by 2030 and would include measures to implement it.

The proposed regulation also includes measures aimed at accelerating access to markets for net-zero technologies.  

It also aims to set up mechanisms to support the development of the skills needed for the net-zero industries. The Commission would support the establishment of 'European net zero industry academies', each focusing on a net-zero technology. A 'net-zero Europe platform' would assist the availability and deployment of people with skills needed in net-zero technologies. 

Furthermore, the proposal would give Member States the possibility to set up regulatory sandboxes to test innovative net-zero technologies in a controlled environment and for a limited amount of time. The proposed regulation would also set up monitoring activities on the supply chains to track its application.

In the Parliament, the proposal has been referred to the Committee on Industry, Research and 
Energy (ITRE). The Committee on the Environment, Public Health and Food Safety (ENVI) is associated under rule 57 of Parliament’s Rules of Procedure with exclusive and shared competence. The Committee on Employment and Social Affairs (EMPL) is associated with exclusive competence. The Committees on Economic and Monetary Affairs (ECON), Internal Market and Consumer Protection (IMCO) and Regional Development (REGI) are associated with shared competence.

Christian Ehler (EPP, Germany) was appointed rapporteur in ITRE in March 2023. 1553 amendments were tabled in ITRE. The ITRE committee adopted its report on 25 October with 43 votes in favor, 12 against, and 3 abstentions. According to the report, the scope of the proposed regulation should be widened, to cover the components, materials and machinery along the supply chains of 16 categories of net-zero technologies (listed in a new article), such as nuclear fission and fusion energy technologies, including nuclear fuel cycle technologies; carbon dioxide, methane, and nitrous oxide, removal, capture, transport, injection; or hydrogen transport infrastructure technologies or recycling technologies. A new benchmark for the EU's net-zero technologies annual manufacturing capacity, set at 25 % of global demand for the corresponding technologies, would also be added. Member States could designate 'net-zero industry valleys' to create clusters of net-zero industrial activities, to be accompanied by a plan detailing which net-zero manufacturing activities it would cover. 

During its November II 2023 plenary session, the Parliament adopted the ITRE report unchanged, with 376 votes in favor, 139 against, and 116 abstentions.

The Council adopted its position on 7 December 2023. As compared to the Commission proposal, the Council particularly increases the list of strategic net-zero technologies from 8 to 10, by including nuclear and sustainable alternative fuels.

The Parliament and Council found a provisional agreement on 6 February 2024. Under the agreement, the Regulation applies to 19 ’net-zero technologies’. The Commission and Member States should support manufacturing projects to reduce the EU’s strategic dependencies on these net-zero technologies by reaching a manufacturing capacity of: a benchmark of at least 40% of the EU’s annual deployment needs for the corresponding technologies necessary to achieve the EU’s 2030 climate and energy targets; with a view to reach 15 % of world production by 2040, except where the increased EU's manufacturing capacity would be higher than needed to achieve the EU’s 2040 climate and energy targets. For more information, read the legislative briefing mentioned in the 'further reading' section.

The Coreper endorsed the agreement on 16 February 2024 and ITRE approved the agreement on 22 February. The Parliament adopted the agreement on 25 April. The Council gave its final approval to the new Regulation on 27 May 2024. The new Regulation was signed on 13 June 2024. It was published in the Official Journal of the EU on 28 June 2024, and entered into force on the following day.

References:

Further reading:

Author: Guillaume Ragonnaud, Members' Research Service, legislative-train@europarl.europa.eu

As of 15/12/2024.