The Parliament approved its stance on legislation aimed at strengthening Europe's manufacturing capacity for technologies crucial in achieving decarbonization goals. The "Net-Zero Industry Act" establishes a milestone for Europe: to generate 40% of its yearly deployment requirements in net-zero technologies by 2030, aligning with the National Energy and Climate Plans (NECPs), and to secure a quarter of the global market value for these technologies. Additionally, this act aims to address the hurdles related to expanding manufacturing capabilities in these crucial technologies.

In their amendments, MEPs broadened the scope of the draft legislation to encompass the entire supply chain, including components, materials, and machinery for producing net-zero technologies. They propose a wider, more comprehensive list of technologies to be covered, to be updated periodically. Notably, MEPs included nuclear fission and fusion technologies, sustainable aviation fuels (SAFs), and specific industrial technologies.

A clear negotiation mandate for #NZIA.

This is good news for our industry and for the climate.

We will finally make the #GreenDeal work. pic.twitter.com/BCaxCs8gQv

— Dr Christian Ehler (@MEP_Ehler) November 21, 2023

Net-zero industry valleys

The law retains two project classifications: net-zero technology manufacturing projects and net-zero strategic projects. It also aims to streamline the permitting process, setting a timeline of 9 to 12 months for regular projects and 6 to 9 months for strategic projects to be authorised. MEPs propose the creation of "Net-Zero Industry Valleys" initiatives, speeding up the permitting process by delegating parts of the environmental assessment evidence collection to member states.

The legislation would earmark funding from national Emission Trading System (ETS) revenues and for most strategic projects through the Strategic Technologies for Europe Platform (STEP), a step towards a European Sovereignty fund, MEPs say.

“With the adoption of this proposal, MEPs are showing they are serious about making Europe fit for industrial manufacturing. Without these steps to reduce the administrative burden, speed up processes, and increased public investment in our industry and innovation, Europe would face decarbonisation by deindustrialisation. This proposal shows we can prevent this”, said lead MEP Christian Ehler.

Next steps

The legislation was adopted with 376 votes to 139, with 116 abstentions. Once Council has also adopted its position, talks on the final shape of the law can start.