The European Parliament’s recent backing of the Net Zero Industry Act (NZIA) elicited reaction from across the bloc… but it was far from unanimous. The NZIA represents a significant step in the EU’s commitment to boosting its domestic production of green technologies and achieving its climate goals. The NZIA aims to increase the EU’s share in the global market for decarbonization technologies, with a specific target for Europe to produce 40% of its annual deployment needs in net-zero technologies by 2030. This legislation also seeks to capture 25% of the global market value for these technologies. To achieve this, the Act proposes actions such as accelerating permits, enhancing cooperation between the Commission and member states, increasing skilled workers, and establishing regulatory sandboxes for testing innovative technologies​​​​.

“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.”

Lead MEP Christian Ehler (EPP, DE).

However, the NZIA received a mixed reaction. While major solar lobby groups in Europe mostly welcome the NZIA, they are divided over a clause related to non-EU-made technology used for tendered projects. The Act includes limitations on procuring and tendering projects using net-zero technologies sourced from outside the EU, aiming to reduce dependencies on other countries for clean technologies. Despite the potential benefits of this Act, the inclusion of non-price criteria in auctions and the focus on local content has raised concerns about the balance between supporting European solar manufacturing and being part of a globalized solar supply chain​​.

“Using non-price criteria is a good idea to reward more sustainable and more locally produced technologies.

However, we’ve been clear that a fundamental shift in public auctions and procurement like this should be phased-in gradually and be tailored to the specific supply chain starting point of solar PV, as also proposed by the European Solar Industry Alliance. 

It would be a mistake to apply these criteria sweepingly to all auctions and to all technologies alike from day one. So, we’re pleased to see the Parliament proposal to have technology-specific guidance from the European Commission six months after adoption of the Act on how and when to apply these non-price criteria.

The Parliament position, however, has one ugly turn. It introduces pre-qualification criteria on local content, meaning that technologies that are partially produced outside Europe are not even allowed to bid into public auctions. This is a red flag for the solar sector and for those committed to the EU’s energy security and climate goals. 

Two things can be true; We must work harder to support European solar manufacturing and Europe needs to be part of a globalised solar supply chain to meet climate and energy targets.”

Dries Acke, Policy Director at SolarPower Europe

WWF’s reaction to the NZIA has also been hedged with concerns. The organisation expressed disappointment over the European Parliament’s approach. WWF criticizes the broadening of the list of strategic net-zero technologies to include unproven technologies, such as nuclear fusion or Small Modular Reactors, which may not be commercially viable for decades. This shift in focus is seen as diverting funds from key green technologies essential for timely decarbonization of European industry. Furthermore, WWF highlights concerns about the deployment of Carbon Capture and Storage (CCS) technologies and the failure to exclude the deployment of industrial clusters, termed ‘Net Zero Industry Valleys’, in protected Natura 2000 sites, which risks harming the environment and biodiversity​​.

With this vote the European Parliament has lost its green focus and is instead relying on hocus-pocus. The list of strategic technologies was supposed to target those with a proven and substantial impact in achieving the EU’s 2030 climate targets, such as wind and solar, heat pumps, batteries, electricity grids and renewable hydrogen for targeted sectors. But in what can only be described as magical thinking, the Parliament has opened up the list to imaginary silver bullets that may never materialise, meaning taxpayers’ money will be diverted from the key green technologies needed to decarbonise the European industry on time.”

Camille Maury, Senior Policy Officer on the Decarbonisation of Industry at WWF European Policy Office.

The next steps involve the Council of the European Union deciding on its approach before starting negotiations, likely in December. The various perspectives on the NZIA underscore the complexity and challenges in balancing the need for rapid decarbonization, industrial competitiveness, and environmental protection.

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