EU Parliament passes Net-Zero Industry Act

2024/04/30 at 7:00 AM

The European Parliament adopted the Net-Zero Industry Act in a plenary vote on 25 April. According to the new regulations, by 2030, the European Union is to build production capacity ensuring at least 40 per cent of the demand for zero-emission energy and fuels in Europe. The European Parliament’s decision was welcomed by representatives of the European shipping industry.

The directive assumes that the EU is to build production capacity for green fuels based on the National Energy and Climate Plans. Europe wants to build production capacity that will meet at least 15 per cent of global demand for green energy. In accordance with the Directive, support will be given to investments in renewable energy sources, decarbonisation of industry, modernisation of energy networks, energy storage, biofuels, and nuclear energy. The latter was not included in the draft Directive submitted to the legislators by the European Commission but was added to the draft during negotiations between the EU Council and the European Parliament last December. Thus, the European Union is moving away from the anti-nuclear policy that has caused major problems in Germany’s energy sector and is slowing down the decarbonisation of the local economy.

Investments in industry

Member States will create the so-called “Net-Zero Acceleration Pathways”, which will support the creation of zero-emission industry clusters. Another important provision of the Directive is the obligation of the Member States to provide financial support to residents and companies that want to move away from emission technologies. Changes will also be introduced in public procurement to promote the use of ecological technologies, which currently often prevail in tenders where the only criterion for selecting an offer is the lowest price. Investments in zero-emission technologies and production capacity will be co-financed from funds obtained from trading in EU ETS emission allowances.

The new regulations gained great support in the European Parliament. The directive was supported by 361 MEPs, 121 were against and 45 abstained. “This vote is good news for European industry and sets the tone for the next term. To achieve all our economic, climate and energy ambitions, we need industry in Europe. This law is the first step in adapting our market to this purpose,” commented legislator Christian Ehler from the European People’s Party.

Shipping expectations

The maritime industry is also happy with the voting results and hopes that the new law will be an impulse for the development of the alternative fuels market in shipping. “European shipowners have consistently requested for a mandate on the European fuel suppliers to scale up and make clean, affordable and safe fuels available in the market. Matching European fuel industrial capacity with the EU targets under the FuelEU Maritime is essential. We welcome the 40% benchmark for the production of clean fuels such as advanced biofuels and e-fuels as a stepping stone towards an international scale-up of alternative sustainable fuels for shipping. We will work closely with the Commission to ensure that the 40% benchmark is translated into immediate action,” commented Sotiris Raptis, Secretary General of the European Community Shipowners’ Association (ECSA).

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