After over a year of negotiations between the European Commission, Parliament and Council, the Net-Zero Industry Act (NZIA) was adopted on 25 April 2024. The aim is to put forward a joint European response to the industrial policy initiatives of other leading industrialised nations, such as the US Inflation Reduction Act, Japan's Green Transformation package and the Chinese Made in China 2025 strategy. In the face of increasingly fierce international competition, the act is intended to support key industries in Europe by strengthening their competitiveness and mitigating unilateral reliance on imports, as a basis for achieving the objectives of the European Green Deal.
The NZIA defines the industries that will be key to the successful implementation of the Green Deal. The list includes technologies relating to renewable energy – wind, solar, heat pumps and geothermal energy –, hydrogen, and CO2 capture and storage, but also technologies for the production of climate-friendly basic materials such as cement, steel and basic chemicals. For all of these key industries, the NZIA has set a target of satisfying 40 per cent of European Union demand from production in the member states by 2030. It envisages the EU achieving a global market share of 15 per cent by 2040.
In their statement, Dr. Lukas Hermwille and Dr. Anna Leipprand, both Co-Heads of the Transformative Industrial Policy Research Unit at the Wuppertal Institute, emphasise that with the NZIA, an active industrial policy is finally being pursued explicitly after many years of reluctance. However, they also recognise one of the EU's major weaknesses in the NZIA, namely that no agreement has yet been reached on substantial financial support for the transformation of the industrial sector at EU level. Nevertheless, with the NZIA the EU commits to an active industrial policy and takes a first step towards developing a genuinely European response to the challenges of a new geopolitical environment for the industrial sector. |