EU Approves Legislation to Boost Domestic Green Technology Manufacturing

EU Clears Net Zero Industry Act to Boost Clean Tech Production

EU Clears Net Zero Industry Act to Boost Clean Tech Production

European Union governments have officially approved a new law aimed at ensuring that the bloc produces 40% of its solar panels, wind turbines, heat pumps, and other clean tech equipment. The Net Zero Industry Act (NZIA) is designed to help European industry compete with U.S. and Chinese rivals.

Importance of the Act

The NZIA is a crucial component of the EU’s efforts to maintain its position as a global leader in reducing greenhouse gas emissions and manufacturing the necessary technology.

Current Situation

Europe’s reliance on China, which is projected to have 80% of global manufacturing capacity in solar power, is a cause for concern. Additionally, the EU is wary of the $369 billion in green subsidies provided by the U.S. Inflation Reduction Act, fearing that European producers may be enticed to relocate.

2030 and 2040 Targets

The EU has set a target to produce 40% of the products necessary to reduce greenhouse gas emissions by 2030. These products include renewable energy sources, nuclear power, heat pumps, electrolysers, and other decarbonizing technologies such as carbon capture. Furthermore, the EU aims to account for 15% of global production of these technologies by 2040.

Key Provisions of the NZIA

The NZIA aims to expedite the permitting process for projects that enhance EU manufacturing, with most permits expected to be issued within six to nine months. Furthermore, public authorities procuring clean tech products must prioritize sustainability and resilience, with a 30% weighting on these factors in addition to price.

Challenges Ahead

Achieving the 40% target will be particularly challenging in the solar sector, as EU manufacturers currently only supply less than 3% of EU panel deployments and are struggling to stay afloat. While the EU wind energy sector is more robust, Chinese companies are beginning to make inroads.

Reporting by Philip Blenkinsop; Editing by Mark Potter

Read More of this Story at – 2024-05-27 14:06:13

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