Companies operating in Europe renewable energy and other clean tech sectors are set to enjoy streamlined permitting and public procurement procedures and other policy support in line with the EU’s climate and environmental targets, following a decisive vote today (April 25) in the European Parliament.

MEPs backed the Net-Zero Industry Act (NZIA) in the last plenary session in Strasbourg before the EU elections by 361 votes to 121, paving the way for an acceleration of the green industrialisation of the bloc. The new legal framework is intended to boost the domestic production of technologies needed for decarbonisation, such as electric vehicle batteries, heat pumps, solar panels, electrolysers and wind turbines.

Tabled by the EU executive in March 2023 as a response to multi-billion-dollar subsidies via the Inflation Reduction Act (IRA) in the US and growing competition from China, it sets the goal of producing 40% of clean technologies at home by 2030, with a view to fulfilling member states’ energy and climate plans. After several rounds of negotiations with governments in the EU Council, the EU also aims to meet 15% of global demand.

“If we don’t have a competitive industry, the Green Deal is doomed to fail,” said lawmaker Christian Ehler (Germany/EPP), who steered the bill through Parliament, referring to a convergence with other recent legislation such as the Critical Raw Materials Act and a range of EU-level funding opportunities to support investments in the relevant sectors.

“We won’t be able to produce solar panels in Germany or in Europe if we don’t have the right materials, and for that we established a clear framework,” said Ehler, who said the outcome of lengthy negotiations was a realistic piece of legislation with a clear supply chain approach.

MEP Tiemo Wölken (Germany/S&D) recognised the importance of industrial competitiveness, but cautioned that the transition towards a net-zero emissions economy shouldn’t come at the cost of citizens or the environment. “We can’t forget social justice and fairness,” he stressed.

For the Greens/EFA group, German lawmaker Henrike Hahn (Germany/Greens) argued that support should be targeted to genuinely sustainable technologies. ““We need to end dinosaur technologies like nuclear, and we don’t want greenwashing of strategic projects,” she said.

But not all factions were satisfied with the outcome. Hailing from the European Conservatives and Reformists (ECR), which was split in the vote, the Polish lawmaker Kosma Zlotowski said in a debate ahead of the vote that the EU’s climate policy and its ambition of being a global leader climate action was a “way towards crisis and poverty”.

“Regardless of how much we will invest in building a zero-emissions economy, we will never compete with those economies [China, the US], which are not limited by such strict environmental norms,” said Zlotowski.

Speaking for the industry side, Jorgo Chatzimarkakis, CEO of Hydrogen Europe, urged lawmakers to “bridge the gap between ambition and reality” by increasing available funding for strategic technologies and implementing a Capital Markets Union that maximises Europes potential.

Cleantech for Europe, another trade association representing manufacturers of net-zero tech, was among various industry representatives that welcomed the adoption of the NZIA, but regretted in an open letter its falling short of making the Europe “the home of cleantech manufacturing”, and called for an EU competitiveness deal.

Environmental NGOs also had reservations about the legislation’s final form, citing the lack of a social dimension to the NZIA, as well as what they saw as excessive reliance on “unproven” technologies.

Boris Jankowiak, who specialise in industrial policy at the NGO Climate Action Network (CAN) Europe, said the NZIA had lost its original focus on genuine green technologies. Camille Maury, senior policy officer on the decarbonisation of industry at WWF Europe, agreed, and saw the vote as a “missed opportunity”.

“This Regulation was supposed to target only technologies with a proven substantial impact in achieving the EU’s 2030 climate targets,” Maury said. “Broadening the scope to a long list of technologies will now divert taxpayers’ money to magical future techno-fixes.”

The legislation awaits formal adoption by the EU Council before entering into force.