Europe Takes a Bold Step Towards Boosting Domestic Production of Net-Zero Technologies with Passage of Net Zero Industrial Act

The European Union (EU) has passed the Net Zero Industrial Act (NZIA) with the goal of boosting the production and deployment of domestically-made net-zero technologies, including hydrogen equipment. The bill was passed by a vote of 361 to 121, with 45 abstentions, and now awaits approval from the European Council before becoming EU law.

The NZIA sets targets for the deployment of EU-made net-zero equipment such as electrolysers, fuel cells, and other H2 kit. It also offers streamlined permitting and regulatory incentives to manufacturers to increase their manufacturing capacity. The aim is for 40% of total electrolyzer deployment to be “Made in Europe.” Additionally, Europe is set to capture 15% of the global market for these technologies.

Key provisions of the NZIA include the creation of “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 seen as crucial for European industry and lays the groundwork for future economic, climate, and energy goals.

The NZIA was introduced in response to China’s dominance in the global net-zero technology market. Currently, Chinese manufacturers hold 34% of the global electrolyser market, with Europe following 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.