Last updated: June 20th 2025

Net Zero Industry Act

The Net Zero Industry Act is a regulation establishing an EU framework to strengthen the manufacturing ecosystem for net zero technologies, in order to support the Union’s targets of reducing net greenhouse gas emissions and reinforce Europe’s leadership in industrial green technologies. 

The objectives of the regulation are to provide investment certainty, lower administrative burden through facilitated permitting and access to information, and facilitate market access through public procurement, auctions, and schemes to support private demand by consumers. Additionally, the development of skills for quality job creation in these sectors is also addressed.

The main building blocks of the NZIA are:

  • Two overall benchmarks for the manufacturing capacity for net-zero technologies in the EU: by 2030, at least 40 % of the EU's annual deployment needs and, by 2040, 15 % of world production in value.
  • The speeding up of permitting through the establishment of a time limit of max 18 months for construction or enlargement of net-zero technology projects (over 1 GW). For smaller projects (below 1 GW) a 12-month deadline will be applicable with even shorter timelines for strategic projects;
  • Streamlining public procurement schemes to incentivise the purchase of net-zero technology products by sustainability criteria as minimum requirement and resilience contribution (e.g. in case there is a +50% third-country dependence for the specific strategic net-zero technology). 

  • The development of net-zero acceleration valleys, to create clusters of net-zero industrial activity to increase the attractiveness of the EU as a location for manufacturing and development activities and further streamline administrative processes;

     

     

Furthermore, the regulation would allow Member-states the possibility to set up regulatory sandboxes to test innovative net-zero technologies in a controlled environment and for a limited amount of time. Additional provisions include also monitoring activities on the supply chains to track the regulation’s application. 

Focus: Net-Zero Industry Act secondary legislation

The NZIA came with a whole array of secondary legislation — through both legal (Delegated) and non-legal (Implementing) acts, all subject to future revision — detailing the specifications of this the NZIA regulatory framework. Originally conceived as Europe’s response to the IRA, NZIA now serves as a first-of-its-kind blueprint for strengthening European resilience across energy, technology, and security dimensions. Six key pieces of legislation are currently closed or still under development as of 18th April 2025:

  • (DA) Primarily-used components: Components, final products and technologies falling in this list will benefit from specific provisions in the Act, including benchmarks, harmonised permitting rules, and the possibility for projects to obtain strategic project status, with easier access to both public and private funding. 
  • (IA) Guidelines for strategic project selection criteria: gives additional guidance on key concepts such as "first-of-a-kind," "best available net-zero technologies," "significant manufacturing capacity," and "practices that significantly and permanently reduce CO₂-equivalent emissions."
  • (IA) Main specific components: A list of key components will be defined to apply the resilience criterion under public procurement (Article 25) and national auctions (Article 26).
  • (IA) Non-price criteria in auctions: extra focus on the design of non-price criteria, both for pre-qualification and award phases in renewable energy auctions launched by member states from 2026 on.
  • (IA) Environmental sustainability in public procurement: details minimum environmental sustainability requirements for public procurement procedures that fall under the relevant directives and involve some of the technologies listed in NZIA
  • (DA) Carbon storage – Oil & Gas contributions: this implementing act will provide clearer rules on how contributing bodies are identified, how contributions are calculated, and how progress will be reported in order to reach the 50MioT target of CO2 storage in Europe by 2030.

 

What’s in it for hydrogen?

The Net-Zero Industry Act, jointly with the Critical Raw Materials Act, are complementary pieces of legislation for the ramp up of hydrogen technology under the Green Deal Industrial Plan. The NZIA alone will set the basis for permitting procedures and manufacturing ambitions for clean tech in Europe by 2030 and hydrogen is expected to play a pivotal role.

Under the NZIA, electrolysers, fuel cells and other hydrogen technologies, energy storage, RFNBO technologies are all in the scope of the regulation, making them strategic technologies. Upstream components of these technologies are also included. The granting of Net-Zero Strategic Project status can be awarded to those projects that contribute to an increase of production capacity of components or parts related to strategic technologies for which the EU heavily depends on imports, or to projects that provide a systemic benefit towards EU competitiveness, with spill-over effects on manufacturing capacities, sustainability performances, skilling and reskilling. Clean manufacturing projects in Europe’s less developed and transition regions and Just Transition Fund Territories can be considered of strategic importance, upon request from project promoters; the same status can be granted to projects awarded by EU ETS Innovation Fund, Important Projects of Common European Interest (IPCEIs), Hydrogen Valleys and Hydrogen Bank.

Under the proposed streamlined permitting processes for clean tech manufacturing projects, permitting procedures cannot exceed 12 or 18 months, respectively when manufacture output is below or beyond 1GW. In the case of Net-Zero Strategic Projects, they will benefit of even quicker procedures, but not exceeding 9 or 12 months respectively, according to their output (as above). For projects with no GW capacity, permitting process shall not exceed 12 or 18 months, irrespective of status. 

In the final legislation, no specific funding envelope was dedicated to the development of strategic hydrogen technologies, but the co-legislators opened the doors to an easier access to public and private funding.

Under Article 25 on public procurement, new procedures will require the application of sustainability and resilience criteria in procurement calls, to be verified by Member State authorities before granting public funding to bidders.

In a nutshell, sustainability and resilience criteria will be mandatory for the following technologies: electrolysers, fuel cells, hydrogen pipelines, compressors, hydrogen refuelling stations, storage facilities, ammonia crackers, and sustainable alternative fuels technologies.

Resilience requirements will apply when:

  • A third country supplies more than 50% of a specific net-zero technology or its key components to the EU, and/or
  • There is a fast growth trend: an average ≥10 percentage point increase per year (over two years), reaching ≥40% market share of the EU

If one of the conditions exists, the national authorities cannot accept bids from that oversupplying country. Derogations from the resilience criterion are allowed only for GPA countries or in cases where no suitable tenders or requests are received. Sustainability criteria may be bypassed if cost differences exceed 20%, based on objective and transparent data.

When it comes to auctions (Article 26), resilience and sustainability criteria will also apply to RFNBO hydrogen competitive mechanisms. Resilience in national auctions will mainly target electrolysers. Resilience criteria must cover at least 30% of auction volumes (or around 6 GW per year) across Member States. For electrolysers, resilience will apply against China and must cover at least 75% of the electrolyser volumes auctioned. Bids must not include stacks or more than two key essential components originating from, or assembled in, China.

Resilience measures could also extend to other third countries if the Commission identifies supply chain risks through EU-level monitoring, typically conducted at least nine months before the auction’s publication.

Derogations to this resilience criterion are possible if the estimated cost difference exceeds 15% per auction, based on objective and verifiable data. 

 

Links to Legislation and additional information:

Press release: Making the EU the home of clean technologies manufacturing and green jobs

Net Zero Industry Act Proposal

Net Zero Industry Act – Compromise between the co-legislators

Q&A on the Net-Zero Industry Act and the European Hydrogen Bank