EU agreement on the Net-Zero Industry Act found
(sustainabilityenvironment.com) – Provisional agreement on the Net-Zero Industry Act, the new European law on the zero emissions industry. On 6 February, the negotiators of the Parliament and the Council of the Union approved a shared text that will now have to be formally voted by both “chambers“. This text is very different from the original proposal put forward by the European Commission. In the hands of the co-legislators, the act has become a means of mediation between the many industrial interests at stake with a final result that does not fully satisfy either industry associations or civil society organizations.
Net-Zero Industry Act, what is it?
First announced as part of the Commission’s Green Deal business plan in early 2023, the Net-Zero Industry Act (NZIA) is part of the EU’s direct response to the US Inflation Reduction Act. Executive von der Leyen has designed the proposed legislation to help the bloc achieve its 2030 climate goals while stimulating the production of key transition technologies within EU borders
The act sets precise targets for the end of this decade: to manufacture in Europe 40% of the zero-emission technologies needed by the 27, capturing 25% of the value of the global market. How to reach the goal? Mainly by facilitating market access for technology products through better investment conditions, lower administrative burdens and simplified permit granting procedures. At the same time, the law aims to improve the skills of the European workforce in these areas (notably through the launch of training academies) and to create a platform for coordinating Community action in this area.
The Commission proposal identified eight “net emission-free strategic technologies“, to which special support could be given, with shortened procedures and subject to the national production parameter of 40%. The list included the following:
- photovoltaic and thermal solar technologies;
- onshore and offshore renewable energy;
- batteries and storage media;
- heat pumps and geothermal energy;
- electrolyzers and fuel cells;
- biogas/biomethane;
- carbon capture and storage (CCS);
- network technologies.
The list was accompanied by another containing all the technologies with zero net emissions, (therefore also nuclear and SAF) and able to benefit in this case only a speeding up of the authorization procedures. With shorter timeframes for strategic versus non-strategic.
Law on Net-Zero Industry Act, the changes
Last year, Parliament and the Council of the European Union defined their position on this issue, calling for several changes to the original text. Some of these were accepted by the interim agreement. During the negotiations, for example, Members obtained that the list of technologies to be supported is linked to national differences.
In detail, projects resulting from the new list of technologies can become “net emission-free strategic projects” if a Member State so wishes. It will be up to each EU country to decide which technology to consider “strategic” and finance its implementation. Which also makes the production of nuclear technologies labeled as strategic.
This change brings another one. The maximum time for granting permits for the construction or expansion of large manufacturing projects with zero net emission technology (more than 1 GW), as well as those not measured in gigawatts, shall not exceed 18 months. For smaller projects (less than 1 GW), the deadline will be 12 months. Shorter deadlines for strategic projects.
Sustainability and Resilience criteria for auctions and tenders
Another key point for the Net-Zero Industry Act: national support schemes to accelerate the spread of clean technologies among households and consumers (for example solar panels, heat pumps) should take into account sustainability and resilience criteria of the supply chain. Public procurement procedures and auctions for renewables should also meet these criteria, albeit under conditions defined by the Commission.
In detail, the rules of public tenders for the purchase of goods, works and services related to strategic technologies must ensure transparent, feasible and harmonised requirements; and that the supply of these products in the block is diversified. In this case, the contribution to environmental sustainability will be a mandatory minimum requirement, while the contribution to resilience will be applied if there is a dependence on third countries above 50%. On the auctions side, the interim agreement provides that the Member State may apply both pre-qualification and non-price-related award criteria, such as environmental sustainability, contribution to innovation or integration of energy systems. These criteria should apply to at least 30% of the volume auctioned each year per Member State.
The Commission will define the criteria for procurement and auctions and review the auctioned volume in the light of an assessment of the functioning of the system.