BRUSSELS (Reuters) – European Union governments on Monday formally approved a new law aimed at ensuring the bloc produces 40% of its solar panels, wind turbines, heat pumps and other clean technology equipment and helping industry European Union to compete with rivals from the USA and China.
The Net Zero Industry Act (NZIA) will come into force next month or early July, once it is signed by the presidents of the European Parliament and Council and published in the EU’s official journal.
BECAUSE IT’S IMPORTANT
The law is a centerpiece of the EU’s effort to ensure it is not only a global leader in reducing greenhouse gas emissions, but also in producing the necessary technology.
Europe is increasingly dependent on China, which is expected to have 80% of global solar energy production capacity. The EU also fears that the $369 billion in green subsidies provided for in the US Inflation Reduction Act could motivate European producers to relocate.
CONTEXT
The bloc has set a 2030 target of producing 40% of the products it needs to reduce greenhouse gas emissions. These will cover renewable energy, nuclear power, heat pumps, electrolysers and other decarbonisation technologies, including carbon capture.
The EU also aims to reach 15% of global production of these technologies by 2040.
NZIA proposes to simplify the granting of licenses for projects that boost production in the EU, ensuring most are issued within six to nine months.
Public authorities purchasing cleantech products will have to base their choices not just on price, but also with a 30% weighting on the sustainability and resilience of an offering – the degree to which the EU depends on supply from a single third country .
Achieving the target will be particularly difficult in the solar sector, as EU manufacturers supply less than 3% of EU panel deployments and are fighting for survival. The EU’s wind energy sector is much stronger, although Chinese companies are gaining ground.
(Reporting by Philip Blenkinsop; Editing by Mark Potter)
