EU approves law on stimulating the production of green technologies

EU governments have officially approved a new law designed to ensure 40% of the production of solar panels, wind turbines, heat pumps and other environmentally friendly technological equipment within the bloc. This is stated in the message of the European Council.

The bloc also aims to reach 15% of global production of these technologies by 2040.

In addition, the move also aims to strengthen European industry in the face of competition from the United States and China.

The Net Zero Industry Act (NZIA) will come into force next month or in early July this year, after it is signed by the Presidents of the European Parliament and the Council of the EU and published in the EU’s official journal.

The law will create favorable conditions for investment in green technologies by:

• simplifying the process of obtaining permits for strategic projects;
• facilitating market access for strategic technological products (in particular, through public procurement or auctions for the sale of renewable energy sources);
• improving the skills of the European workforce in these sectors;
• creating a platform for coordinating EU actions in this area.

To foster innovation, the NZIA proposes to create a favorable regulatory framework for the development, testing and validation of innovative technologies (the so-called «regulatory sandboxes»).

In addition, the law sets an annual injection capacity of at least 50 million tons of CO2 to be achieved by 2030 in geological storage facilities located in the EU.

According to Reuters, this law is a central element of the EU’s efforts to become not only a world leader in reducing greenhouse gas emissions, but also in producing the necessary technologies.

Europe is increasingly relying on China, which is projected to have 80% of the world’s solar production capacity. The EU also fears that the $369 billion in green subsidies provided by the US inflation reduction law will encourage European manufacturers to relocate.

As a reminder, the EU industry is seeking a deep reform of the energy market. The deficit of investment in the European energy grid is estimated at €800 billion by 2030, according to a report by the European Round Table (ERT). Renewable energy producers complain that they lack the grid to connect solar panels and wind turbines, while Europe struggles with the high cost of paying for existing power grids.