EU steps up clean-tech industry rules but campaigners rue inclusion of carbon capture

European lawmakers have reached a deal for new rules to bolster EU production of technologies needed for decarbonisation.

Under the Net-Zero Industry Act, Europe will produce 40% of its annual deployment needs in net-zero technologies by 2030, and aim to capture 15% of the global market value for these technologies.

First announced under the Commission’s Green Deal in early 2023, the NZIA is part of the EU’s direct response to the US Inflation Reduction Act, and to help the EU reach its 2030 climate targets while boosting the production of key green technologies within the EU.

MEPs produced a list of technologies to be supported: renewable technologies, nuclear, industrial decarbonisation, grid, energy storage technologies, and biotech. The law will simplify the permitting process, setting maximum timelines for projects to be authorised depending on their scope and output.

Net-Zero Acceleration Valleys will also allow faster permits for industrial zones in areas that require environmental assessment evidence. These territories will concentrate several companies involved with a certain technology to increase the attractiveness of the EU as a location for manufacturing activities and to further streamline the administrative procedures for setting up net-zero manufacturing capacity.

But while the NZIA is expected to give an urgent boost to existing clean technologies, environmental campaigners said that by broadening the list to technologies not yet commercially available, the EU had effectively dropped the main objective of the regulation to achieve the EU’s 2030 climate targets.

“Unfortunately the European Parliament and Council decided to steer away from the original list of green technologies, losing the focus of the act and opening it up to many more unproven technologies,” said Camille Maury, senior policy officer on the Decarbonisation of Industry at WWF Europe.

It will be up to each member state to decide which technology they want to consider as ‘strategic’ and finance the deployment. This means technologies with a proven track-record for quick decarbonisation, such as solar and wind, are placed on the same footing as unproven and expensive ones, such as nuclear fission and Carbon Capture and Storage (CCS).

“With this final deal, the European Parliament and Council have lost their green focus and are instead relying on hocus-pocus… broadening the scope while public investments are limited, risks diverting taxpayers’ money to magical future techno-fixes, and away from the available and proven key green technologies we need to achieve the EU’s 2030 climate targets and decarbonise our industry on time,” Maury said.

Under the proposed rules, national schemes must speed up the deployment of solar panels and heat pumps among households and consumers.

The proposal also sets a specific target for CO2 carbon capture and storage, with an annual injection capacity of at least 50 million tonnes to be achieved by 2030.

The legislation will encourage funding from national Emission Trading System (ETS) revenues and for most strategic projects through the Strategic Technologies for Europe Platform (STEP), and it is a step towards a European Sovereignty fund, MEPs said.

“This deal is good news for European industry and sets the tune for the next term. To achieve all our economic, climate and energy ambitions we need industry in Europe. This Act is the first step to making our market fit for this purpose”, said lead MEP Christian Ehler (EPP).

The informal agreement now needs the approval of both Parliament and Council in order to become law. The Industry, Research and Energy Committee will hold a vote on the file during a forthcoming meeting.

WWF said it was regretful that CCS technologies had not been limited due to the unavoidable emissions in targeted sectors.

“CCS must not be used as an excuse for continued fossil fuel use and is clearly not a silver bullet to address all industrial emissions, in particular before 2030,” Maury said.

“It sends the wrong message to European manufacturers and investors, as focusing on scaling up the right green technologies is what will provide an opportunity for the future of EU industry. Achieving the EU 2030 climate targets and supporting the decarbonisation of European industry while boosting its competitiveness is possible, but will now require member states to ‘pick’ the right green technologies from this terribly long list.”