EU Adopts ‘Net Zero Industrial Act’ to Boost Domestically-Made Net-Zero Technologies and Compete with China in Global Market

The European Union (EU) has formally adopted the Net Zero Industrial Act (NZIA) to boost the production and deployment of domestically-made net-zero technologies, including hydrogen equipment. The European Parliament (EP) passed the bill by a vote of 361 to 121, with 45 abstentions. Now, it awaits approval from the European Council, made up of member-state governments, before becoming EU law.

The NZIA includes targets for EU-made net-zero equipment such as electrolysers, fuel cells, and other H2 kit. It also grants streamlined permitting and regulatory perks to net-zero equipment makers to enhance manufacturing capacity. The goal is for 40% of total electrolyser deployment to be “Made In Europe.” Additionally, the bill sets a target for Europe to capture 15% of the global market of these technologies.

Key provisions of the NZIA include creating “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 bill is crucial for European industry and sets the stage for future economic, climate, and energy goals.

The NZIA is a 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 expanding net-zero market by promoting domestic production and deployment while maintaining high standards for quality and sustainability.