EU lawmakers back law to boost domestic clean tech production

The European Parliament approved on Thursday a new law designed to ensure the bloc produces 40% of its renewable energy, fuel cell and other green technology needs within its borders, and to help Europe's industry compete with U.S. and Chinese rivals.

EU lawmakers voted by 361 to 121 against, with 45 abstentions, for the Net Zero Industry Act.

The act is a centrepiece of the EU's push to ensure it is not only a global leader in cutting greenhouse gas emissions, but also in manufacturing the clean tech required.


Europe is increasingly relying on China, which is for example forecast to have 80% of global manufacturing capacity in solar power. The EU also has concerns that the $369 billion of green subsidies in the U.S. Inflation Reduction Act (IRA) will entice European producers to relocate.

The bloc has set a 2030 target of producing 40% of the products it needs to reduce greenhouse gas emissions. These will cover renewable energy, nuclear power, heat pumps, electrolysers and other decarbonising technologies, including carbon capture.

Likely to enter force later this year, the NZIA proposes streamlining the granting of permits for projects that boost EU manufacturing, ensuring most are issued within six to nine months.

Public authorities buying clean tech products will have to base their choices not only on price, but with a 30% weighting to an offer's sustainability and resilience - the degree to which the EU relies on supply from a single third country.

Hitting the target will be particularly tough in solar, given EU manufacturers supply less than 3% of EU panel deployments and are fighting for survival. The EU wind energy sector is far stronger, although Chinese companies are starting to gain a foothold.