European Council Gives Final Approval to Net-Zero Industry Act

The Council has officially adopted the regulation aimed at establishing a framework for Europe's net-zero technology manufacturing ecosystem, known as the 'Net-Zero Industry Act'. This regulation marks the final step in the decision-making process, aiming to enhance the deployment of net-zero technologies critical for the EU's climate goals, leveraging the single market to fortify Europe’s leadership in green industrial technologies.

The Net-Zero Industry Act is a cornerstone of the new industrial policy, designed to position Europe at the forefront of the global green technology race. It aims to ensure that Europe’s fight against climate change not only strengthens strategic autonomy but also fosters growth and job creation within the EU.

The regulation is set to create a conducive environment for investments in green technologies by:

• Streamlining Permit Processes: Simplifying the permit-granting procedure for strategic projects.
• Market Access Facilitation: Easing access to markets for strategic technology products, especially in public procurement and renewable energy auctions.
• Enhancing Workforce Skills: Developing the European workforce’s skills through net-zero industry academies and industrial 'valleys'.
• Coordinating EU Actions: Establishing a platform for coordinated EU action in the net-zero sector.
• To further innovation, the act proposes creating regulatory frameworks for the development, testing, and validation of innovative technologies, referred to as 'regulatory sandboxes'.

The regulation outlines two key benchmarks to measure progress:

• Manufacturing Capacity: Achieving 40% of the EU’s deployment needs for net-zero technologies such as solar panels, wind turbines, batteries, and heat pumps.
• Global Production Share: Increasing the EU's share of global production of these technologies to 15% by 2040.

Additionally, the act mandates an annual injection capacity of at least 50 million tonnes of CO2 in geological storage sites within the EU by 2030.

Following the Council's approval of the European Parliament's position, the legislative act is now adopted. It will be signed by the Presidents of the European Parliament and the Council, subsequently published in the Official Journal of the European Union, and will come into force on the day of its publication.

The Net-Zero Industry Act is part of the green deal industrial plan's three key legislative initiatives, alongside the Critical Raw Materials Act and the Electricity Market Design Reform, aimed at boosting the competitiveness of Europe's net-zero industry and accelerating the transition to climate neutrality.

The European Commission proposed the act on March 16, 2023. The European Parliament adopted its position on November 21, 2023, followed by the Council’s general approach on December 7, 2023. A provisional agreement was reached on February 6, 2024, and voted on in the European Parliament’s plenary session on April 25, 2024.