The European Union’s Net Zero Industrial Act: Boosting Domestically-Made Net-Zero Technologies and Competitiveness in the Global Market

The European Union’s (EU) legislative branch has formally adopted the Net Zero Industrial Act (NZIA) to boost the production and deployment of domestically-made net-zero technologies, including hydrogen equipment. The European Parliament (EP) passed the bill with a vote of 361 to 121, with 45 abstentions. The NZIA awaits approval from the European Council before becoming EU law.

The NZIA includes deployment targets for EU-made net-zero equipment such as electrolysers, fuel cells, and other H2 kit. It also grants streamlined permitting and regulatory perks to net-zero equipment makers to enhance manufacturing capacity. The goal is for 40% of total electrolyser deployment to be “Made in Europe.” Additionally, the bill sets a target for Europe to capture 15% of the global market for these technologies.

Key provisions of the NZIA include creating “Net-Zero Acceleration Valleys” where projects seeking to build new manufacturing facilities can delegate parts of the evidence collection necessary for environmental assessments to host governments. This legislation is vital for European industry and paves the way for future economic, climate, and energy goals.

The NZIA is a response to China’s dominance in the global net-zero technology market. Currently, Chinese manufacturers hold 34% of the global electrolyser market, while Europe follows closely behind at 27%. European electrolyser manufacturers have expressed concerns that EU subsidy schemes favoring lower production costs could unintentionally subsidize cheap Chinese equipment. This legislation aims to ensure that European industry remains competitive in the growing net-zero market.