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What Is the European Union Net-Zero Industry Act? Five Things to Know

March 20, 2023 by Joe Panettieri

The European Union has announced the Net-Zero Industry Act as part of an effort to "scale up manufacturing of clean technologies in the EU and make sure the Union is well-equipped for the clean-energy transition."

Read between the lines, and the European Union is striving to be less dependent on net-zero technologies manufactured in China. Also, the EU wants to accelerate technology innovations vs. the United States.

The Net-Zero Industry Act and the related Critical Raw Materials Act are part of the EU's Green Deal Industrial Plan. The overall strategy calls for the EU to be a leader in cutting carbon emissions, while also self-producing the technology required to do so, Reuters reported.

EU Net-Zero Industry Act: Five European Union Sustainability Goals to Know

Here are five things that technology partners, business management consultants, chief information officers (CIOs) and chief sustainability officers (CSOs) should know about the Net-Zero Industry Act, according to the EU announcement:

  1. Manufacturing: The act is designed to "strengthen the resilience and competitiveness of net-zero technologies manufacturing in the EU, and make our energy system more secure and sustainable."
  2. Funding: The act will "create better conditions to set up net-zero projects in Europe and attract investments, with the aim that the Union's overall strategic net-zero technologies manufacturing capacity approaches or reaches at least 40% of the Union's deployment needs by 2030."
  3. Climate Neutrality, Job Creation and Energy Independence: The effort will "accelerate the progress towards the EU's 2030 climate and energy targets and the transition to climate neutrality, while boosting the competitiveness of EU industry, creating quality jobs, and supporting the EU's efforts to become energy independent."
  4. Net-Zero Technologies: The act will support such strategic net-zero technologies as solar photovoltaic and solar thermal; electrolysers and fuel cells; onshore wind and offshore renewables; sustainable biogas/biomethane; batteries and storage; carbon capture and storage; heat pumps and geothermal energy; and grid technologies.
  5. Overall Investment Stimulation: The act will stimulate net-zero strategic projects; carbon capture and storage projects; net-zero technology training & career education; red tape removal; financial investments; and regulatory sandboxes to help "develop and test innovative net-zero technologies and create a level playing field for innovation.

EU Sustainability Goals: Net-Zero Challenges to Know

Still, the Net-Zero Industry Act and the European Union face multiple challenges on the journey toward sustainability. Chief among them, the EU concedes that the continent is too dependent on technologies imported from China. Examples, according to the EU, include:

  • Solar Power Technology: More than 90% of solar photovoltaic (PV) wafers and certain other PV technology components are imported from China.
  • Electric Cars: More than one-fourth of electric cars and batteries are imported from China.
  • Manufacturing: China accounts for more than 90% of global investments in net-zero technology manufacturing facilities.

Net-Zero Industry Act and Critical Raw Materials Act: Mixed Reviews

Meanwhile, some third-party groups offered feedback and raised concerns about the Net-Zero Industry Act. For example:

  • According to Business Europe: "The attempt to speed up the expansion of manufacturing projects for net-zero technologies in Europe is highly welcomed." However, "The limited scope of the proposal of the Net-Zero Industry Act risks to become a handicap for Europe’s net-zero transformation. The EU must acknowledge that the decarbonisation of Europe is a matter of priority for the whole economy, industries and businesses."
  • According to Wind Europe: "As it stands Europe’s Industrial Plan falls short of what’s needed to support and expand Europe’s wind supply chain and deliver on our energy security and climate targets."

Here's the complete text of the Net Zero Industry Act, as of March 20, 2023.

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