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Producing 40% of Europe’s net-zero technology demand in Europe
The Net Zero Industry Act (NZIA) is part of the European Green Deal and aims to scale up clean technology production in the EU with a target to provide at least 40% of the EU’s annual deployment needs for strategic net-zero technologies by 2030. Affected technologies include solar, wind, batteries and storage, heat pumps and geothermal energy.
In general, the law aims to achieve three long-term targets:
- 1Strengthen the resilience and competitiveness of net-zero technologies manufacturing in the EU
- 2Improve conditions for setting up net-zero projects in Europe and attract foreign direct investments into the European Union
- 3Accelerate progress towards the EU’s 2030 climate and energy targets and create additional high-quality jobs
“The Net Zero Industry Act represents an existential opportunity and threat for European and global players alike, requiring decision-makers to challenge the status quo and actively plan the journey ahead.”
Strong incentives to increase net-zero manufacturing capacity by 2030
In 2021, only wind power, electrolyzers, and heat pumps have been significantly ahead of the 40% target, while in all other areas current manufacturing capacity were below or just around the target. Without a significant increase in production capacity, the EU will probably not be able to meet 40% of its demand in all selected technologies except wind power by 2030.
Expected impact on EU energy sector employment
In 2019, 7.6 million people were employed in the European energy sector. Taking into account the effects of the NZIA and other ongoing initiatives, Europe is expected to create a total of 3 million additional jobs in the energy sector by 2030.
The additional jobs will be created as a result of the expansion of manufacturing capacity and the associated expansion of the value chain required to support growth. Therefore, NZIA represents a significant growth opportunity for the entire European energy sector.
Required actions
A quick implementation of the NZIA could be an adequate answer to the U.S. Inflation Reduction Act (IRA) and can create new opportunities in the EU.
European Commission
Speed up consultation and decision process and facilitate simple and pragmatic implementation
European
players
Transform operations and build partnerships with much higher ambitions to avoid being forced out of business
Non-European players
Establish European manufacturing quickly to secure access to one of the world's most important markets
Jan Pasemann has also contributed to this report.
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