The EU's Net-Zero Industry Act (NZIA) is set to come into force at the end of June following its final adoption today. The key regulation aims to ensure that domestic cleantech companies can meet at least 40% of the bloc's needs by 2030.
“Demand is growing in Europe and worldwide and we are now in a position to meet a larger share of this demand with European supplies,” EU Commissioner Ursula von der Leyen said in a statement.
The Union hopes that by increasing its domestic production capacity, it can reduce its dependence on third countries to develop net-zero technologies. This includes the bloc's reliance on China to import solar panels.
NZIA’s main actions
The law focuses on the development of a range of technologies that are strategically important for the EU's decarbonisation plans, including solar energy, batteries and energy storage, wind energy and renewable hydrogen.
In addition, the creation of more favourable processes, such as regulatory real-world laboratories and faster approval processes, is intended to mobilise investments.
In addition, the NZIA will focus on providing vocational training and introducing net zero ‘valleys’ with the aim of creating clusters that can boost manufacturing activity.
Global race for green technologies
The NZIA is part of the EU's Green Deal industrial plan, which aims to make Europe the “home of clean technology”. But competition for leadership in green technologies is heating up and the bloc is at risk of falling behind international rivals.
One of them is the USA. In 2022, the Biden administration introduced the Inflation Reduction Act (IRA) – a $369 billion subsidy package for cleantech products made in North America.
Since its announcement, EU leaders have expressed concern that the law has the potential to discriminate against companies based in the Union or lure them across the Atlantic.
Another competitor is China. The Asian country dominates the production of solar technology and has a market share of 80 percent. The EU is also investigating China for unfair competition practices in the production and supply of wind turbines.
It remains to be seen whether the NZIA, together with the other Green Deal initiatives, can attract the €1.5 trillion in annual investment that Brussels considers essential to meet the EU's latest climate target: a 90% reduction in CO2 emissions by 2040.
