Ensuring the Net Zero Industry Act does what it was intended for

As part of the European Commission’s Green Deal Industrial Plan (GDIP) announced in early 2023, the Net Zero Industry Act (NZIA) is part of the EU's direct response to the US Inflation Reduction Act, designed to help  the EU reach its 2030 climate targets while boosting key green technologies within the EU. This is meant to be achieved through setting a clean technology manufacturing goal for the EU and shortening permitting procedures for what the act calls net-zero and strategic net-zero technologies.

As currently drafted, the NZIA raises several concerns regarding what is defined as strategic net-zero technologies and could have negative impacts, through deregulation, on public participation, local communities, biodiversity and nature. On the other hand, a more focused Regulation has the potential to help the EU achieve its 2030 climate targets, while supporting European industry decarbonisation and boosting its competitiveness - all without pitting these different goals against each other.

What will WWF, CAN Europe, T&E and EEB be looking out for?

Strategic net-zero technologies: keep the list focused
With 2030 just around the corner, the European Parliament should vote for a shorter list of strategic net-zero technologies. This list must be focused on technologies with a proven substantial impact in achieving the EU’s 2030 climate targets, such as wind and solar supply chains, heat pumps, batteries, grids and renewable hydrogen for targeted sectors.

Focusing on the deployment of these green technologies is also a key opportunity for European industries' future. Due to their strategic label, the listed net-zero technologies will get the highest support from the NZIA provisions. This support should not be granted to very expensive unproven technologies, which are not yet commercially available or could take decades to become available, like nuclear fusion or Small Modular Reactors. Widening the scope of the NZIA risks diverting taxpayers’ money from the key green technologies needed to decarbonise the European industry on time. 

Carbon Capture and Storage (CCS): only for unavoidable emissions
Support for Carbon Capture & Storage (CCS) is twofold in the NZIA. As drafted, the act encourages the deployment of manufactured CCS technologies while creating storage capacity and infrastructure in the EU. CCS must not be used as an excuse for continued fossil fuel use and it is clearly not a silver bullet to address industrial emissions, in particular not for efforts to address industrial emissions before 2030. There needs to be a very limited and well-targeted use of CCS to address emissions for which there are no alternative abatement options in specific sectors. Members of the European Parliament should support the deployment of CCS technologies only for such unavoidable emissions in targeted sectors and support the creation of frameworks that clearly define the limited scope of potential CCS use. Those unavoidable emissions should be clearly defined as those stemming from industrial processes for which no alternative to phase-out fossil fuels from processes (for example through electrification, fuel switching for example to renewable hydrogen, or direct reduction technologies) is commercially available, or for which no demand-side or ecodesign measures can be implemented to reduce emissions. 

Permitting procedures: public scrutiny in, industrial clusters out of Nature 2000 areas
Members of the European Parliament must not support provisions that would bypass public authorities, communities or environmental impact assessments in permitting procedures. The NZIA must explicitly exclude the deployment of industrial clusters (Net-Zero Industry Valleys) in areas affecting Natura 2000 sites. Placing these Net-Zero Industry Valleys in Natura 2000 areas will potentially harm the environment and biodiversity. While it is crucial to think through where new manufacturing sites should be deployed, it does not make sense to consider natural areas as possible destinations. Proper spatial planning, well staffed permitting authorities able to carry out quick and quality environmental impact assessments, and consulting the local communities must be part of the equation.