What changed between the adopted text of 21 Nov 2023 and the adopted text of 25 Apr 2024

Removed:P9_TA(2023)0401

Added:P9_TA(2024)0378

Changed:Framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act)

Committee on Industry, Research and Energy

PE749.154

Changed:Amendments adopted by the European Parliament onlegislative 21resolution Novemberof 202325 April 2024 on the proposal for a regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act) (COM(2023)0161 – C9-0062/2023 – 2023/0081(COD))

(Ordinary legislative procedure: first reading)

Changed:AMENDMENTS BY THEThe EUROPEANEuropean PARLIAMENT*Parliament,

Changed:– having regard to the Commission proposal to Parliament and the Council (COM(2023)0161),

Change 1

Removed:---------------------------------------------------------

Added:– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90062/2023),

Removed:2023/0081 (COD)

Added:– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

Removed:Proposal for a

Added:– having regard to the opinion of the European Economic and Social committee of 13 July 2023,

Removed:REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Added:– having regard to the opinion of the Committee of Regions of 5 July 2023,

Removed:on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act)

Added:– having regard to the provisional agreement approved by the committee responsible under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council representative by letter of 16 February 2024 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

Removed:(Text with EEA relevance)

Added:– having regard to the Rule 59 of its Rule of Procedure,

Removed:THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Added:– having regard to the opinion of the Committee on International Trade, Committee on Economic and Monetary Affairs, Committee on Employment and Social Affairs, Committee on the Environment, Public Health and Food Safety, Committee on the Internal Market and Consumer Protection, Committee on Transport and Tourism, Committee on Regional Development,

Changed:Having– having regard to the Treaty on the Functioningreport of the European Union,Committee andon inIndustry, particularResearch Articlesand 114Energy thereof,(A9-0343/2023),

Change 2

Removed:Having regard to the proposal from the European Commission,

Added:1. Adopts its position at first reading hereinafter set out;

Removed:After transmission of the draft legislative act to the national Parliaments,

Added:2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

Removed:Having regard to the opinion of the European Economic and Social Committee,

Added:3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Removed:Having regard to the opinion of the Committee of the Regions,

Added:P9_TC1-COD(2023)0081

Removed:Acting in accordance with the ordinary legislative procedure,

Added:Position of the European Parliament adopted at first reading on 25 April 2024 with a view to the adoption of Regulation (EU) 2024/… of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724

Removed:Whereas:

Added:(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU) 2024/1735.)

Removed:(-1) The prime medium-term objective of European industrial policy is to enable Union industry to implement the energy, climate, environmental and digital transitions, while preserving its competitiveness on the global market, maintaining quality jobs in Europe and strengthening its ability to innovate and produce in Europe, particularly with regard to clean technologies.

Removed:(1) The Union has committed to the accelerated decarbonisation of its economy and ambitious deployment of renewable energy sources to achieve climate neutrality or net zero emissions (emissions after deduction of removals) by 2050. That objective is at the heart of the European Green Deal, the updated EU Industrial Strategy, and in line with the Union’s commitment to global climate action under the Paris Agreement. To reach the climate neutrality goal, Regulation (EU) 2021/1119 of the European Parliament and of the Council sets a binding Union climate target to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990. The proposed “Fit for 55” package aims to deliver on the Union’s 2030 climate target and revises and updates Union legislation in this respect.

Removed:(1a) As outlined in the Green Deal Industrial Plan, the Union needs to take measures to ensure it can speed up net-zero industrial transformation at home. This Regulation is part of those measures and aims to enhance the business case for industrial decarbonisation in the Union.

Removed:(1b) In the interest of the Union's strategic autonomy, a greater focus on the circularity and long lifespans of technologies is essential to strengthen the resilience of Union’s manufacturing industry, while reducing its environmental impacts to contribute to its sustainable competitiveness.

Removed:(2) The Single Market provides the appropriate environment for enabling access at the necessary scale and pace to the technologies required to achieve the Union’s climate ambition as well as the promise of the European Green Deal to turn decarbonisation into sustainable competitiveness. Given the complexity and the transnational character of net-zero technologies, uncoordinated national measures to ensure access to those technologies would have a high potential of distorting competition and fragmenting the Single market. Therefore, to safeguard the functioning of the Single market it is necessary to create a common Union legal framework to collectively address this central challenge by increasing the Union’s resilience and security of supply in the field of net-zero technologies.

Removed:(2a) Any additional mobilisation of State aid should be targeted and temporary, and should be consistent with Union policy objectives such as the Green Deal and the European Pillar of Social Rights. Such financing should not lead to additional disparities among Member States in line with the Union's competition and cohesion policies.

Removed:(2b) The International Energy Agency estimates that the global market for key mass manufactured clean energy technologies will be worth around USD 650 billion a year by 2030, which is more than three times the current level. The net-zero industry globally is growing at an increasing rate, to the extent of demand sometimes outpacing supply. The Union industry is part of an open, export-oriented, capital intensive, social market economy that can deliver prosperity for Union citizens only if it is competitive on and open to the global market. The Union’s ambition for the net-zero industry should be aligned with that reality and should aim to capture a significant global market share.

Removed:(3) Regarding external aspects, the Union will step up its efforts to join forces with open, democratic partners committed to the Paris Agreement. Regarding emerging markets and developing economies, the Union will seek mutually beneficial partnerships in the framework of its Global Gateway strategy, which contribute to the diversification of its raw materials supply chain, to the achievement of global climate objectives as well as to partner countries’ efforts to pursue twin transition and develop local value addition.

Removed:(4) To fulfil those commitments, the Union must accelerate its pace of transition to a net-zero economy, including by increasing the share of clean energy in its energy mix, as well asby increasing energy efficiency and the share of renewable energy sources. This will contribute to achieving the Union targets of the European Pillar of Social Rights Action Plan for 2030 of an employment rate of at least 78% and participation in training of at least 60% of adults. It will also contribute to ensuring that the green transition is fair and equitable.

Removed:(5) The higher energy prices after the unjustified and unlawful military aggression by the Russian Federation against Ukraine, gave a strong impetus to accelerate the implementation of the European Green Deal and reinforce the resilience of the Energy Union by speeding up the clean energy transition and ending any dependence on fossil fuels exported from the Russian Federation. The REPowerEU plan plays a key role in responding to the hardships and global energy market disruption caused by the invasion of Ukraine by the Russian Federation. That plan aims to accelerate the energy transition in the European Union, in order to reduce the Union’s gas and electricity consumption and to boost investments in the deployment of energy efficient and low carbon solutions. That plan sets inter alia the targets to double solar photovoltaic capacity by 2025 and to install 600 GW of solar photovoltaic capacity by 2030; to double the rate of deployment of heat pumps; to produce 10 million tonnes of domestic renewable hydrogen by 2030; and to substantially increase production of biomethane up to 35 billion cubic meters by 2030. The plan also sets out that achieving the REPowerEU goals will require diversifying the supply of low carbon energy equipment and of critical raw materials, reducing sectoral dependencies, overcoming supply chain bottlenecks and expanding the Union’s clean energy technology manufacturing capacity. As part of its efforts to increase the share of renewable energy in power generation, industry, buildings and transport, the Commission proposes to increase the target in the Renewable Energy Directive to 45% by 2030 and to increase the target in the Energy Efficiency Directive to 13%. This would bring the total renewable energy generation capacities to 1236 GW by 2030, in comparison to 1067 GW by 2030 envisaged under the 2021 proposal and will see increased needs for storage through batteries to deal with intermittency in the electricity grid. Similarly, policies related to the decarbonisation of the road sector, such as Regulation (EU) 2019/631 and Regulation (EU) 2019/1242 of the European Parliament and the Council will be strong drivers for a further electrification of the road transport sector and thus increasing demand for batteries.

Removed:(6) The net-zero transformation is already causing huge industrial, economic, and geopolitical shifts across the globe, which will become ever more pronounced as the world advances in its decarbonisation efforts. The road towards a climate neutral, resource-efficient and net zero economy translates into strong opportunities for the expansion of Union’s net-zero industry, making use of the strength of the Single Market, by promoting investment in net-zero technologies ▌and their supply chains. These are the technologies needed to deliver the objectives of the National Energy and Climate Plans, contributing to the resilience and competitiveness of Union industry, allowing for the decarbonisation of our economic sectors, from energy supply to transport, buildings, and industry. A strong net zero industry within the ▌Union can help significantly in reaching the Union’s climate and energy targets effectively, as well as in supporting other Green Deal objectives, such as creating quality jobs and sustainable growth, by creating an industrial base geared towards export as well as domestic supply.

Removed:(7) To meet the Union’s climate and energy targets, energy efficiency needs to be prioritised. Saving energy is the cheapest, safest and cleanest way to meet those targets. ‘Energy efficiency first’ is an overall principle of Union’s energy policy and is important in both its practical applications in policy and investment decisions. Therefore, it is essential to expand the Union’s manufacturing capacity for energy efficient technologies, such as heat pumps and smart grid technologies, that help the EU reduce and control its energy consumption.

Removed:(8) The Union’s decarbonisation objectives, security of energy supply, digitalisation of the energy system and electrification of demand, for example in mobility and the need for fast recharging points, require an enormous expansion of electricity grids in the ▌Union, both at transmission level and at distribution level. At transmission level, high-voltage direct current (HVDC) systems are needed to connect offshore renewable energies; while at distribution level, connecting electricity providers and managing demand-side flexibility builds on investments in innovative grid technologies, such as electric vehicles smart charging (EVSC), energy efficiency building and industry automation and smart controls, advanced meter infrastructure (AMI) and home energy management systems (HEMS). The electricity grid needs to interact with many actors or devices based on a detailed level of observability, and hence availability of data, to enable flexibility, smart charging and smart buildings with smart electricity grids and small-scale flexibility services enabling demand-side response from consumers and the uptake of renewables. Connecting the net-zero technologies to the network of the ▌Union requires the substantial expansion of manufacturing capabilities for electricity grids in areas such as offshore and onshore cables, substations and transformers.

Removed:(8a) Clustering industrial activity directed towards industrial symbiosis can minimises the environmental impact of the activities as well as providing efficiency gains for industry. As such, clustering can contribute substantially to achieving the objectives of this Regulation. In this regard; this Regulation promotes the development of Net-Zero Industry Valleys (Valleys). Those Valleys should be limited in geographical and technology scope in order to promote industrial symbiosis. Valleys should be designated by Member States and each designation should be accompanied by a Plan with concrete national measures to increase the attractiveness of the Valley as a location for manufacturing activities. Valleys should in particularly be used as a tool for re-industrialisation of regions, especially for coal regions in transition.

Removed:(8b) Member States should be able to designate and support Valleys. When designating a Valley the Member State should draw up a plan for the Valley specifying which net-zero manufacturing activity is to be covered in the Valley (Plan). The Member State should also conduct environmental impact assessments as required for the net-zero manufacturing activities that are to take place in the Valley. Such impact assessments substantially limits the need for undertakings to perform those assessments for permits for the net-zero manufacturing activities in the scope of the Valley. The Plan should include the results of the environmental impact assessments as well as the national measures to be taken to minimise or mitigate negative environmental impact. The Plan should also include concrete national measures to support industrial activity in the scope of the Valley. Those measures should include measures to invest in or trigger private investment in energy, digital and transport infrastructure as well as measures to reduce the operational expenditure for the industry in the Valley, such as contracts of difference for energy prices. Other measures to be considered are measures to strengthen IP protection, the setting up of an innovation hub in the Valley as well as to attract start-ups to the Valley. In order to provide investment security for industry, the Plan should also specify the duration of the support measures.

Removed:(9) Additional policy effort is necessary to support those technologies that are commercially available and have a good potential for rapid scale up to support the Union’s climate targets, improve the security of supply for net-zero technologies and their supply chains, and safeguard or strengthen the overall resilience and competitiveness of the Union’s energy system. It includes access to a safe and sustainable source of best-in-class fuels, as described in recital 8 of Commission Delegated Regulation (EU) 2022/1214.

Removed:(10) To achieve the 2030 objectives a particular focus is needed on the net-zero strategic projects, also in view of their significant contribution towards the path to net zero by 2050. These projects play a key role in the Union’s open strategic autonomy, ensuring that citizens have access to clean, affordable, secure energy. Given their role, these projects should benefit from even faster permitting procedures, obtain the status of the highest national significance possible under national law and benefit from additional support to crowd-in investments. To be recognised as a strategic project, the project promoter should comply with applicable obligations in the fields of social and labour law established by Union or national law.

Removed:(10a) Net-zero strategic projects should be implemented sustainably by relying on the use of socially responsible practices including respect of human and labour rights, by meaningfully engaging with local communities and by relying on transparent business practices with adequate compliance policies to prevent and minimise risks of adverse impacts on the proper functioning of public administration, including corruption and bribery.

Removed:(11) In order to ensure that the Union’s future energy system is resilient this scaling-up should be carried out across the whole supply chain of the technologies in question, in full complementarity with the Critical Raw Materials Act.

Removed:(11a) Since 2007 and the Commission communications of 22 November 2007 entitled ‘A European Strategic Energy Technology Plan (Set-Plan) - Towards a low carbon future' and 20 October 2023 on the revision of the Strategic Energy Technology (SET) Plan, the Strategic Energy Technology Plan (SET Plan) has been driving the Union's innovation in energy technologies. As such, the SET Plan has significantly contributed to strong knowledge base on energy technologies and has been essential for the alignment of strategic priorities on research, innovation and deployment of clean energy technologies. To ensure that the Union can deliver its full carbon-neutrality objectives by 2050, that knowledge base needs to be leveraged and further enhanced. The SET Plan is therefore an irreplaceable instrument for the achievement of the objectives of this Regulation and is the backbone for the innovation agenda of this Regulation.

Removed:(12) In 2020 the ▌Commission adopted an EU strategy for energy system integration. It set out a vision on how to accelerate the transition towards a more integrated energy system, one that supports a climate neutral economy at the least cost across sectors. It encompasses three complementary and mutually reinforcing concepts: first, a more ‘circular’ energy system, with energy efficiency at its core; second, a greater direct electrification of end-use sectors; third, the use of renewable and low-carbon fuels, including hydrogen ▌.Considerations related to energy system integration refer to solutions for fully integrating all the electricity generated by renewable energy installations into the wider energy system. This means, for instance, adopting technical solutions that allow for the integration of surplus electricity generated by renewable electricity installations, including through storage and by expanding plannable fossil free power sources in the grid, in its various forms and demand-side management.

Removed:(12a) Carbon dioxide capture and storage (CCS) is a technology that will contribute to mitigating climate change. It consists of the capture of carbon dioxide (CO2) from industrial installations, its transport to a storage site and its injection into a suitable underground geological formation for the purposes of permanent storage.

Removed:(13) The development of carbon capture and storage solutions for industry is confronted with a coordination failure. First, despite the growing CO2 price incentive provided by the EU Emissions Trading System, for industry to invest into capturing CO2 emissions making such investments economically viable, they face a significant risk of not being able to access a permitted geological storage site. Second, investors into first CO2 storage sites face upfront costs to identify develop and appraise them even before they can apply for a regulatory storage permit. Transparency about potential CO2 storage capacity in terms of the geological suitability of relevant areas and existing geological data, in particular from the exploration of hydrocarbon production sites, can support market operators to plan their investments. Member State should make such data publicly available and report regularly in a forward-looking perspective about progress in developing CO2 storage sites and the corresponding needs for injection and storage capacities above, in order to collectively reach the Union-wide target for CO2 injection capacity. Third, CO2 storage projects are only economically viable when there is a business case along the full value chain, including transportation. Any legal storage obligations should therefore be accompanied by effective Union and national policies and measures to ensure coordination and investment across the value chain.

Removed:(14) A key bottleneck for carbon capture investments that are today increasingly economically viable is the availability of operating CO2 storage sites in the Union, which underpin the incentives from Directive 2003/87/EC of the European Parliament and the Council. To scale up the technology and expand its leading manufacturing capacities, the Union needs to develop a forward-looking supply of permanent geological CO2 storage sites permitted in accordance with Directive 2009/31/EC of the European Parliament and of the Council. By defining a Union target of 50 million tonnes of annual operational CO2 injection capacity by 2030, in line with the expected capacities needed in 2030, the relevant sectors can coordinate their investments towards a Union Net-Zero CO2 transport and storage value chain that industries can use to decarbonise their operations. This initial deployment will also support further CO2 storage in a 2050 perspective. According to the Commission’s estimates, the Union could need to capture up to 550 million tonnes of CO2 annually by 2050 to meet the net zero objective, including for carbon removals. Such a first industrial-scale storage capacity will de-risk investments into the capturing of CO2 emissions as important tool to reach climate neutrality. In view of the expected storage requirements in 2050, the Union’s CO2 storage market will have to be complemented by a market that covers third countries in Europe with large storage potential. When this regulation is incorporated into the EEA Agreement, the Union target of ▌annual operational CO2 injection capacity ▌will be adjusted accordingly. To ensure the achievement of Union’s target, Member States should take the necessary measures to facilitate and incentivize the deployment of carbon capture and storage projects. Such measures should be able to include measures incentivizing emitters to capture emissions, funding support for investors for needed infrastructure to transport CO2 to the storage site and direct funding of CO2 storage projects.