European Parliament Adopts Net Zero Industrial Act to Boost Domestic Production of Green Technologies

Yesterday, the European Parliament (EP) officially adopted the Net Zero Industrial Act (NZIA) in an effort to promote the production and deployment of domestically-made net-zero technologies, such as hydrogen equipment. The bill aims to boost manufacturing capability and deployment targets for EU-produced net-zero equipment, including electrolyzers, fuel cells, and other H2 kit. It is now awaiting approval from the European Council, made up of member-state governments, before becoming European law.

The joint position on the NZIA was agreed upon by the EP and Council in February, making it highly likely to pass this final hurdle as well. The bill includes provisions for streamlining permitting and offering regulatory perks to net-zero equipment manufacturers, with a goal of 40% of total electrolyzer deployment being “Made In Europe”. Additionally, the text of the NZIA adopted by the EP outlines the creation of “Net-Zero Acceleration Valleys” to support projects seeking to build new manufacturing facilities.

The bill also sets a target for Europe to capture 15% of the global market for net-zero technologies. Christian Ehler, the Member of the European Parliament leading the bill, stated that the vote is positive news for European industry and sets the tone for future economic, climate, and energy ambitions. The NZIA is seen as a step towards making the European market suitable for achieving these goals.

The adoption of this act is seen as a measure to counteract Chinese dominance in global net-zero technology market. Chinese manufacturers currently hold 34% of global electrolyzer market while Europe holds second place at 27%. European electrolyzer manufacturers have raised concerns that EU subsidy schemes favoring low cost production could unintentionally support cheap Chinese equipment. This act aims to promote domestic production and reduce dependence on foreign manufacturers while also promoting green technologies that will help mitigate climate change efforts.