Energy World To Enter Age Of Clean Energy Technology Manufacturing

The Net-Zero Industry Act’s driving objective is to establish an environment that is friendly to regulatory and investment activity for the advancement of priority net-zero technologies.

Energy World To Enter Age Of Clean Energy Technology Manufacturing

The European Commission unveiled a draft Net-Zero Industry Act last month with the intention of encouraging investment and expansion in the manufacturing sector for clean technology. The proposed Act is a component of the February announcement’s Green Deal Industrial Plan.

The Net-Zero Industry Act’s driving objective is to establish an environment that is friendly to regulatory and investment activity for the advancement of priority net-zero technologies, with the long-term objective of having the EU’s net-zero technology manufacturing capacity reach at least 40% of the EU’s overall needs by 2030.

The Act aims to expedite the construction of priority net-zero technology projects to contribute to the EU’s decarbonization objectives. It requires a single responsible administrative agency, online access to permitting resources, and simplified permit-granting processes.

Prioritized “strategic” net-zero technologies are those that will contribute to the “Fit-for-55” target of reducing net greenhouse gas emissions by 55% by 2030, operate in markets with technological readiness and maturity, and benefit from increased manufacturing capacity in situations where the EU relies heavily on imports.

Solar, wind, batteries and storage, heat pumps and geothermal energy, electrolyzers and fuel cells, biogas/biomethane, carbon capture, utilization and storage, and grid technologies should be given priority status and urgent treatment in all judicial and dispute resolution processes.

The proposed legislation, component of Green Deal Industrial Plan would prioritize projects to accelerate CO2 capture and storage EU-wide, with an objective of annual 50Mt injection capacity by 2030. Oil and gas companies would contribute significant funding to the development of these projects.

The EC’s proposal calls for easier access to private and public investment funding for strategic net-zero technology projects, including working with the European Investment Bank and other partners to develop public-private financing programs, and encouraging the deployment of state aid. It also calls for the development of a European Sovereignty Fund to meet investment needs across the EU.

In addition to introducing a number of mandates and measures for member states, the Act also allocates €5.5 million in seed money for the creation of EU Net-Zero Industry Academies.

The creation of programmes and funding for these training organisations to retrain and upskill workers is anticipated to involve member states, business, and other stakeholders.

The proposal assumes that the establishment of the academies, as well as facilitating skilled worker mobility within the EU and the matching of skill sets and jobs, will depend on the Net-Zero Europe Platform, a central information and coordination resource for Member States and the EC around the implementation of the Act.

The Act proposes a rubric for member states to set up “regulatory sandboxes” to foster innovation. Companies must meet eligibility and selection criteria, and small- and medium-sized enterprises will be given priority access. Member states are expected to coordinate regulatory activities and share relevant information.

The development of green technologies is central to global efforts to develop and source capital to pay for investment in clean technology. The Net-Zero Industrial Act is a response to the U.S. Inflation Reduction Act, which included $370 billion in climate and energy-related provisions, including $121 billion in investment and production tax credits.

The EU is currently a net importer of net-zero energy technologies, with the majority of imports coming from China. Even in sectors where EU industry is strong, the trade balance is deteriorating, and EU producers face rising energy and input costs.

The Act and its companion Critical Raw Materials Act are designed to address import-heavy supply chains and the need for the EU to reduce its reliance on imports, particularly in sectors crucial to the bloc’s ability to meet its net-zero emissions goals on schedule.

The Critical Raw Materials Act identifies and ensures the availability of raw materials required in the manufacture of net-zero technologies. Both legislative initiatives are widely regarded as essential to accelerating the EU’s efforts to both meet the bloc’s ambitious decarbonization targets and compete in the race for technological advancement in green technology.

Nuclear energy is not included in the Green Transition Act, but small modular reactors and nuclear plants with limited waste are included as second-tier priority technologies, allowing them to benefit from incentives such as streamlined permitting procedures.