Council and Parliament strike a deal on NZIA

20 February 2024: The Council and the Parliament found a provisional agreement on the Net Zero Industry Act (NZIA) on 6 February. ERA welcomes the text that aims to boost the industrial development of net-zero technologies which are needed to achieve EU’s climate goals and reduce CO₂ emissions.

Under the provisional agreement, there will be a single list of net-zero technologies, with criteria for selecting strategic projects in those technologies that will contribute to decarbonisation. Within the list are sustainable transport technologies including Sustainable Aviation Fuel (SAF) as defined in Refuel Maritime, Aviation and RED.
 
The list also includes Carbon Capture, Utilisation and Storage (CCUS) and CO₂ transport technologies and will be applicable with three exceptions. It will be revised based on needs stemming from the National Energy and Climate Plans (NECPs).
 
The Act also included fast permit-granting processes, the promotion of future industrial valleys, rules governing public procurement and the application for auctions to deploy renewable energy sources.
 
Mentioning projects of sustainable transport would mean that new technologies that are key to total decarbonisation would be included in the Act. This will appeal to future SAF investments and projects but more importantly for deploying new technologies. We look forward to reading the consolidated text issued next week from the European Commission confirming this.

Meanwhile, the COREPER adopted the provisional deal on 16 February, and the ITRE Committee is expected to vote on the deal on 22 February. According to the EP agenda, the NZIA is planned to be tabled for vote in the April session if not earlier.

12 December 2023: Member States have adopted their position on the Net Zero Industry Act (NZIA), accelerating the industrial deployment of critical technologies needed to support the transition to climate neutrality. The position includes an increase of the list of strategic net-zero technologies from eight to ten, by including nuclear and sustainable alternative fuels, an enlargement of the list of non-strategic net-zero technologies of biotech climate and energy solutions, and other technologies and transformative industrial technologies for energy-intensive industries. In addition, the mandate foresees a regular evaluation of the regulation in relation to the objectives set, to include other relevant technologies in the future.

Following the adoption, several Member States wrote a letter to recall the importance of technology neutrality and the sovereignty of Member States to determine their energy mix.

Furthermore, the Council position, strategic net-zero technologies will benefit from realistic permitting procedures and from additional support to crowd-in investments. The Member States decided to refer to article 3b(1), meaning the list of strategic technologies does not prejudge the allocation of EU funding. They point out that in application of these provisions, the rules and procedures relating to financing continue to apply and these technologies can and will continue to be eligible for EU funding, including for  support by the European Investment Bank.

Trilogues on the NZIA text will be hold on 13 December.

28 November 2023: The European Parliament Plenary has adopted its position on the Net Zero Industry Act (NZIA) legislation intended to bolster Europe's manufacturing output in technologies needed for decarbonisation, with 376 votes in favour, 139 against and 116 abstentions.

In their amendments, MEPs broadened the scope of the draft legislation to encompass the entire supply chain, including components, materials and machinery for producing net-zero technologies. They proposed a more comprehensive list of technologies to be covered, to be updated periodically and they sustainable aviation fuels (SAFs).

MEPs also proposed the creation of 'Net-Zero Industry Valleys' initiatives, speeding up the permission process by delegating parts of the environmental assessment evidence collection to Member States. MEPs also claimed that the legislation would earmark funding from national Emission Trading System (ETS) revenues and for most strategic projects through the Strategic Technologies for Europe Platform (STEP).

The Council is expected to adopt its position on 7 December, before negotiations can begin.

26 June 2023: ERA has responded to the EC Public Consultation on the Net Zero Industry Act (NZIA).

On 20 March 2023, the Commission published a call for feedback regarding a proposal for regulation on the Net Zero Industry Act that has been delayed to 27 June.

The proposal, adopted in March, aims to simplify the regulatory framework for the production capacity of technologies. However, SAF and hydrogen have not been classified as strategic technologies to meet net-zero emissions objectives. Yet, this classification is necessary to appeal to investors and carry SAF productions and markets.

This regulatory initiative is even more important to make the EU able to compete with other international regions that are investing in decarbonizing aviation. Indeed, the NZIA should be able to cover the same fields as the Inflation Reduction Act proposed in the US. Otherwise, there is a risk that investors will prefer to focus on other regions rather than the EU, so it cannnot become self-sufficient in the production of SAF.

ERA responded to the public consultation stressing the need to include the full value chain of hydrogen, SAF and electric batteries in the list of strategic technologies for their development. The association also attached a position paper highlighting the investments needed to meet EU climate goals in aviation and resuming our key suggestions:  

• classifying SAF, liquid hydrogen and electric batteries as “strategic net-zero” technologies
• prioritising CCU at the same level as SAF
• the incorporation of a revision clause allowing it to reflect new technological developments in a timely way
• labelling SAF market developments as Important Projects of Common European Interest

After the public consultation, the European Commission will assess all the feedback received and subsequently publish the final act. The text will then enter the codecision process with the Parliament and the Council.

12 May 2023: The European Commission has published a call for feedback regarding a proposal for regulation on the Net Zero Industry Act (NZIA) that is now open until 27 June. 

On 20 March 2023, the Commission published a call for feedback regarding a proposal for regulation on the Net Zero Industry Act that has been delayed to 27 June.

The proposal for regulation on the NZIA was adopted in March and has the aim to simplify the regulatory framework for the production capacity of technologies. As they are key to meet the Union’s climate neutrality goals, this act will provide measures improving investment certainty, lowering administrative burden for projects, facilitating access to market, facilitating carbon capture and storage and supporting innovation.

ERA will circulate a draft response to the call for feedback in the coming weeks that will stress the importance of including Sustainable Aviation Fuel among the strategic technologies, as SAF will be crucial to achieve net-zero emissions and reaching EU climate goals.

It is disappointing that there is no explicit support for existing pathways to SAF in the draft Regulation or in the list of supported technologies. We are concerned the consequence could be that investment in SAF will be less attractive than alternative products like renewable diesel. We don’t want to see a scenario where the EU needs to import SAF to meet its own targets, missing the opportunity to create green jobs in the sector.

In the meantime, please feel free to provide us with comments on the impact that these criteria could have on your business.

21 March 2023: The EU Commission has adopted a proposal for a regulation on the Net-Zero Industry Act (NZIA) to simplify the regulatory framework for the production capacity of technologies that are key to meet the Union’s climate neutrality goals by measures improving investment certainty, lowering administrative burden for projects, facilitating access to market, facilitating carbon capture and storage and supporting innovation. It is a response to the US Inflation Reduction Act.

The Net-Zero Industry Act addresses the net zero technologies essential to the EU's decarbonisation objectives. These technologies will have a significant contribution towards the path to net zero by 2050.

The Act supports in particular 8 strategic net-zero technologies:

• solar photovoltaic and solar thermal technologies,
• onshore wind and offshore renewable energy,
• batteries and storage; iv) heat pumps and geothermal energy,
• electrolysers and fuel cells; vi) biogas/biomethane,
• carbon capture and storage (CCS),
• grid technologies.

Other net-zero technologies are also supported by the measures in the act, to a different degree, including sustainable alternative fuels technologies, advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle, small modular reactors, and related best-in-class fuels.

The legislative proposal will follow the ordinary EU legislative procedure (co-decision) whereby the EU Parliament and Council will scrutinise and potentially amend the proposal – this process will take several months.

On 20 March 2023, the EC issued a public consultation on the NZIA.

Despite the consultation being launched after the adoption of legislative, it may still influence the EU Parliament and Council in the next steps of the legislative process.  The deadline for submissions is 15 May.

ERA will stress the importance of including Sustainable Aviation Fuel among the strategic technologies, as SAF will be crucial to achieve net-zero emissions and reaching  EU climate goals. It is disappointing that there is no explicit support for existing pathways to SAF in the draft Regulation or in the list of supported technologies. We are concerned the consequence could be that investment in SAF will be less attractive than alternative products like renewable diesel. We don’t want to see a scenario where the EU needs to import SAF to meet its own targets, missing the opportunity to create green jobs in the sector.