Net Zero Industry Act sets ambitious permitting rules, but stronger market signals for cleantech are needed

Brussels, BE 17.03.23

Yesterday, the European Commission unveiled the much-awaited legislative proposal known as the Net Zero Industry Act (NZIA), a sorely needed piece of legislation aiming to increase Europe’s competitiveness in the global cleantech race.

Cleantech for Europe has long called for such an act, as the EU – a powerhouse of clean technology innovation and early-stage investment – falls short of the capital needed to scale these technologies sufficiently to meet our commitments to achieve a 55% reduction of greenhouse gas reductions by 2030.

The act rightly sets out a number of strategic clean technologies for the EU, including electrolysers, batteries and energy storage, renewables and grid technologies. It is great to see that the Commission intends to fast-track permitting for these technologies. This could become a global competitive advantage, especially as the US is unlikely to make progress on permitting with a divided Congress. The Act also mandates Green Public Procurement for strategic net-zero technologies, a measure which is likely to boost demand for EU clean technologies.

On the other hand, the Commission could have gone much further by setting sectoral production targets in the proposal. Clean technologies would have greatly benefited from the market signal of clear domestic production targets expressed in gigawatts of installed capacity. Furthermore, the Act proposes no clear funding mechanism of strategic clean technologies, putting the EU at a significant disadvantage. For example, the Inflation Reduction Act, passed last August by the US Congress, is far clearer with regards to what sectors are qualified to receive what types and amounts of public funding.

“The proposed Net Zero Industry Act contains some steps towards accelerating cleantech deployment, but could set a much stronger market signal by providing sector-specific production targets and putting clear funding mechanisms in place to support those. This is not enough for Europe to take the lead in the global cleantech race.”
Jules Besnainou

Executive Director, Cleantech for Europe

The absence of deep decarbonisation of industry from the list of strategic sectors is also regrettable. Completely designing out emissions from production processes is greatly preferrable to capturing and storing emitted carbon, to which the NZIA attributes great importance. The level of attention given to carbon capture and storage in the NZIA should have been the level of attention given to cleantech manufacturing deployment.

“This legislative act is very much defining the future of the European Union and this is why it’s vital that the European Parliament and Council improve this proposal, by expanding the scope to deep industrial decarbonisation, clarifying financing options for cleantech, but also by showing that we can indeed have a European Response in addition to the 27 different ones. The European Parliament has wrongly been left out of the Net-Zero Europe Platform structure which means we can expect it to be extra hawkish as the file moves through Parliament Committees"
Suzana Carp

Deputy Executive Director, Cleantech for Europe

About Cleantech for Europe

Cleantech for Europe represents the trailblazers developing, deploying and investing in clean technologies across the EU. Our mission is to bridge the gap between cleantech and policy leaders, by equipping policymakers with insights about cleantech and build coalitions to chart a path to EU cleantech leadership. The initiative convenes 24 investors supporting more than 400 cleantech portfolio companies, as well as 12 leading European scale-ups representing the next generation of European industry.

Press Contact:
Zach Sporn

Communications Director, Cleantech for Europe

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