The European Parliament has endorsed the Net Zero Industry Act (NZIA) on Tuesday, signaling a decisive move to encourage onshoring of manufacturing for renewable energy technologies within the EU. The legislation, adopted with 376 votes in favor, 139 against, and 116 abstentions, aims to focus on the domestic production of solar PV, battery energy storage, and wind technologies.
The NZIA seeks to facilitate Europe in meeting 40% of its clean energy deployment needs through domestically manufactured products. The legislation's scope has been expanded to cover the entire supply chain, including components, materials, and machinery for producing net-zero technologies, following final amendments voted on by the Parliament.
Parliament's decision has generated mixed reactions within the European solar industry, prompting approval and some reservations. The NZIA will now undergo negotiations with the European Council to clarify its specific details.
The NZIA proposes non-price and pre-qualification criteria for renewable energy capacity auctions and tenders. Pre-qualification criteria include introducing a local content requirement for projects and technologies involved in public procurements. However, the operational details of this local content requirement are yet to be clarified, raising concerns within the solar sector about potential restrictions on technologies produced outside Europe.
Dries Acke, policy director at SolarPower Europe, expressed concern about a local content ruling, describing it as an “ugly turn” that may exclude technologies partially produced outside Europe from participating in public auctions. Meanwhile, the European Solar Manufacturing Council (ESMC) praised the inclusion of pre-qualification criteria, restricting no more than 50% of the net-zero technology part of the tender from originating in third countries.
The NZIA's non-price criteria include sustainability and resilience to global supply insecurity, which will be considered in the eligibility assessment for public procurement. Acke suggested a phased-in approach tailored to the specific supply chain starting point of solar PV, emphasizing the need for technology-specific guidance from the European Commission.
The NZIA's passage represents a significant step in aligning Europe's renewable energy goals with localized manufacturing, addressing concerns of supply chain security and contributing to a more sustainable and resilient energy infrastructure.
