Last week the Commission proposed the Net-Zero Industry Act to scale up manufacturing of clean technologies in the EU and make sure the Union is well-equipped for the clean-energy transition. This initiative was announced by President von der Leyen as a part of the Green Deal Industrial Plan.

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The Act will strengthen the resilience and competitiveness of net-zero technologies manufacturing in the EU, and make our energy system more secure and sustainable. It will create better conditions to set up net-zero projects in Europe and attract investments, with the aim that the Union's overall strategic net-zero technologies manufacturing capacity approaches or reaches at least 40% of the Union's deployment needs by 2030.

This will accelerate the progress towards the EU's 2030 climate and energy targets and the transition to climate neutrality, while boosting the competitiveness of EU industry, creating quality jobs, and supporting the EU's efforts to become energy independent.

Together with the proposal for a European Critical Raw Materials Act and the reform of the electricity market design, the Net-Zero Industry Act sets out a clear European framework to reduce the EU's reliance on highly concentrated imports. By drawing on the lessons learnt from the Covid-19 pandemic and the energy crisis sparked by Russia's invasion of Ukraine, it will help increase the resilience of Europe's clean energy supply chains.

The proposed legislation addresses technologies that will make a significant contribution to decarbonisation. These include:

• solar photovoltaic and solar thermal
• onshore wind and offshore renewable energy
• batteries and storage
• heat pumps and geothermal energy
• electrolysers and fuel cells
• biogas/biomethane
• carbon capture, utilisation and storage
• grid technologies
• sustainable alternative fuels technologies
• advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle
• small modular reactors
• related best-in-class fuels

The Strategic Net Zero technologies identified in the Annex to the Regulation will receive particular support and are subject to the 40% domestic production benchmark.

Next Steps

The proposed Regulation now needs to be discussed and agreed by the European Parliament and the Council of the European Union before its adoption and entry into force.

Background

The European Green Deal, presented by the Commission on 11 December 2019, sets the goal of making Europe the first climate-neutral continent by 2050. The EU's commitment to climate neutrality and the intermediate goal of reducing net greenhouse gas emissions by at least 55% by 2030, relative to 1990 levels, are made legally binding by the European Climate Law.

The legislative package to deliver on the European Green Deal  provides a plan to put the European economy firmly on track to achieve its climate ambitions, with the REPowerEU Plan accelerating the move away from imported Russian fossil fuels. Alongside the Circular Economy Action Plan, this sets the framework for transforming the EU's industry for the net-zero age.