Introduction
The Net Zero Industry Act (NZIA) is a project meant to upscale the manufacturing of clean technologies in the European Union and to ensure that it has the appropriate equipment for a clean energy transition. President von der Leyen has offered it as a counterpart to the Green Deal Industry Plan. The act promotes eight net-zero technologies, ranging from batteries and storage to biogas.
This project consists of seven pillars that represent actions, such as decreasing CO2 emissions and creating a certain structure to achieve the objectives. For it to be accepted, the European Parliament and the EU Council should discuss and agree with it. This project could be highly influential for the outcomes of 2030 and 2050. The following essay will review the main takeaways, how the NZIA can become a regulation, and the political, economic, and environmental motivators.
The Seven Pillars and Highlights
As mentioned earlier, the NZIA consists of seven pillars that help discuss the areas in which the Union must take action. Said pillars are facilitating investments, decreasing the level of CO2, improving market access, and improving skills to create proper jobs in net-zero technologies, innovation, governance, and monitoring (European Commission 2, 2023).
Regarding the first pillar, the proposal will promote technological capacity building in the EU to start the development and manufacturing of net-zero (NZ) technologies and ensure the implementation of NZ-manufacturing projects, including strategic ones, using streamlining, permit-providing, and administrative processes. For the second pillar, there must be coordinated action on a Union level to promote efforts nationally.
The third pillar requires actions targeted towards accelerating investments in NZ technologies that can be suitably designed and formed at the Union level due to the scale of the demanded investments and manufacturing facilities assisting with serving the internal market. Regarding the fourth pillar, efforts are coordinated to guarantee that skilled employees for the European NZ industry are available.
It is done by promoting the creation of Academies and an NZ European platform. The Commission plans to cooperate with Member States, social partners, industry, and other stakeholders to create training courses (European Commission 2, 2023). That way, the employees will acquire the necessary skills for this project.
The fifth pillar means that by creating regulatory sandboxes, a level-playing field is created for innovations on NZ technologies in the EU and to grant exemptions from the Union law. The innovations will be stimulated using lenient regulatory conditions (European Commission, 3, 2023). For the sixth pillar, the formation of a specific structure at this level, that is, the NZ Europe Platform, will let the Commission coordinate the deeds mentioned above. This is performed in cooperation with the Member States to guarantee a specific application of the Regulation in the Union.
Finally, the seventh pillar, proper Union cooperation, will grant the required and comparable intelligence gathering. Some of its highlights include upscaling technology manufacturing required for climate neutrality, making the regulatory framework easier for said manufacturing, and increasing Europe’s net-zero industry competitiveness. This will motivate Member States and the Commission to predict and prevent shortages and implement the required measures to empower the EU’s clean energy technologies.
Legislative Procedure
Similar to any other project, the NZIA needs to pass a certain process before becoming a regulation. The measures that have been taken currently feature consultations with stakeholders, gathering, and implementation of expertise. Unfortunately, there is no formal impact assessment for this project.
Due to its urgency, it could not have been provided in the previously existing timeframe before the proposal was adopted. This is why the analysis and extra evidence will be gathered in a staff working document created three months after the proposal was published. The Commission will assess the project’s output, results, and impact three years after it is accepted and every four years afterward (European Commission 2, 2023). The most important data of the review will be provided as a report to the EU Parliament and the Council, which will then be available to the public.
Economic, Political, and Environmental Motivators
There are multiple political, economic, and environmental reasons why the project should be implemented. At the moment, Europe is a net importer of NZ technologies, with approximately 25 percent of electric cars and batteries and the majority of solar PV modules and fuel cells gathered from China (European Commission 2, 2023). This dependency represents more than 90 percent of products in specific upstream counterparts of the value chain, for example, ingots and wafers (European Commission 2, 2023). For areas such as wind turbines and heat pumps, in which the European industry is fairly successful, the trade balance is deteriorating, and EU producers are facing challenges from increasing energy and input costs.
Moreover, NZ technologies are the focus of powerful geostrategic interests and are the foundation of the global technological race. Many countries desire to protect their supply with the most modern energy production technologies and lead the clean transition. They invest and grant support measures to empower their production capabilities.
For example, Japan’s green transformation objectives are targeted to gather over 20 trillion Japanese yen through green transition bonds (European Commission 2, 2023). India has promoted the Production Linked Incentive Scheme to strengthen competitive skills in aspects such as solar photovoltaics and batteries. This creates a strong validation for further promotion of the NZIA in Europe.
Other reasons motivate further promotion of this proposal. It aims towards decarbonization and giving citizens clean, affordable, and safe energy. This includes low and lower-middle-income individuals and consumers as well. The measure suitably follows the EU’s approach to provide a fair and just green transition. Energy efficiency is a crucial aspect of achieving the 2030 climate and energy objectives (European Commission 2, 2023).
By saving energy, the targets can be achieved in the safest, cheapest, and cleanest way. This is why the EU’s manufacturing capacity for energy-efficient technologies, including heat pumps, should be diversified. Some of the NZ technologies need to be focused on for the 2030 objectives as well. Besides that, their impact on the road to NZ by 2050 needs to be assessed.
By increasing the manufacturing capacity of NZ technologies in the Union, it will be easier to supply NZ technologies and transition towards clean energy sources around the world. Moreover, they will assist with the Union’s resilience and security in the supply of clean energy. Such technologies will help provide benefits to other crucial economic sectors, such as food production, by ensuring access to clean energy (European Commission 2, 2023). That way, sustainability will be implemented in EU food security, and a larger outlet will be ensured for bio-based alternatives via a circular economy.
Conclusion
The Net Zero Industry Act is a project that will assist with upscaling the manufacturing of green products in the EU. Moreover, it helps guarantee that the necessary equipment for a clean energy transition is present. To come into power, it needs to be reviewed by the European Parliament and Council using a report.
This proposal consists of seven pillars, with some of them being innovation, governance, and monitoring. The proposal has been motivated by dependence on China as an importer of technology, improvement of crucial economic features, and energy efficiency. After being implemented, it could assist with achieving the ecological goals for 2030.
References
European Commission 1. (2023). Net-Zero Industry Act: Making the EU the home of clean technologies manufacturing and green jobs. Web.
European Commission 2. (2023). Proposal for a regulation of the European Parliament and of the Council. EUR-Lex. Web.
European Commission 3. (2023). Questions and answers: The Net-Zero Industry Act and the European Hydrogen Bank. Web.