Net-Zero Industry Act is first step, but EU industrial strategy will need to foster innovation across technologies

Yesterday during trialogues, Member States within the Council and the European Parliament reached an agreement on the Net-Zero Industry Act (NZIA). While expediting permitting procedures for critical net-zero technologies is crucial for advancing the green transformation, it is imperative that the NZIA be complemented by a broader revamp of the EU’s industrial policy and the establishment of a dedicated funding instrument.

European automotive suppliers possess cutting-edge technological knowledge that is essential for the green and digital transition. However, to maintain competitiveness in an evolving landscape, European policies must ensure that EU industry is the true driving force of the transformation. 

The NZIA aims to boost Europe’s manufacturing capacity for net-zero technologies, streamlining approval processes and proposes to ease market access for strategic technology products, enhance the skills of the European workforce in these sectors and create a platform to coordinate EU action in this area. 

CLEPA welcomes the significant efforts of Members States and the European Parliament, particularly with regards to increasing the technology openness of the proposed regulation, including the language on renewable and energy storage technologies. The addition of battery/energy storage systems and fuel cell technologies, along with their critical components, would be a necessary first step for the automotive supply industry.  

However, the NZIA approach of focusing on a predefined list of technologies has important shortcomings. We need an industrial policy framework that stimulates innovation across automotive technologies. This includes a focus on stimulating innovation not only in the battery itself but also in its associated components. The strength of Europe’s automotive sector is the interplay between specialised suppliers and vehicle manufacturers. Vehicles are complex systems of thousands of components that together will deliver safe, smart and sustainable mobility. Zero emission vehicles are therefore more than a battery or fuel cell on wheels. 

Europe’s automotive industry has the technological capabilities to deliver and optimise net zero-emission vehicles, produced in smart factories that help overcome disadvantages in energy and production costs. A holistic industrial strategy should ensure that Europe will be the continent where these innovations continue to advance.