Debates lasted until the last minute in the College of Commissioners on the Net-Zero Industry Act. However, on Thursday 16 March, they managed to agree on a text that was somewhat amended from the provisional version we had commented on (see EUROPE 13135/1). At the heart of the disagreement is whether or not to include nuclear power among the ‘net-zero’ technologies.
The European Commission has split the difference: the regulation should include some nuclear technologies (small modular reactors, or SMRs), but they will not be treated in the same way as the so-called ‘strategic net-zero technologies’.
The target of 40% production of strategic net-zero technologies in the EU by 2030 has not moved.
“Strategic” technologies in the spotlight
The eight strategic net-zero technologies are listed in the annex to the regulation and will be eligible for the full benefits of the regulation. They include: - Solar photovoltaic and solar thermal technologies; - onshore wind and offshore renewables; - battery/storage technologies; - heat pumps and geothermal technologies; - electrolysers and fuel cells; - sustainable biogas/biomethane technologies; - carbon capture and storage technologies; - grid technologies.
Among the facilitation measures affecting them is a priority status with the authorities. In particular, it reduces the waiting time for the granting of permits for a project involving these technologies (9 to 12 months, depending on the production capacity). Promoters of such projects should also receive support from the Member States and the Commission for administrative obligations and advice on financing, according to the European Commission’s plans.
Priority status is based on the fact that the project can be considered to be in the public interest. This can also help in assessing the impact of the project, as the public interest takes precedence over other considerations.
“What used to happen was that environmental considerations prevailed. Here, the authorities will have to analyse the contribution of the project to the EU’s resilience, additional capacity and cannot reject the project solely on environmental grounds”, explains a European official.
The European Environmental Bureau (EEB) regretted this choice to somehow override environmental aspects.
Nuclear, renewable fuels, served last
The Commission plans to give less favourable treatment to ‘net-zero’ technologies considered less strategic. These include mini-reactors, but also electricity and heat storage technologies, renewable fuels and sustainable alternative fuel technologies.
The facilitation measures for which net-zero projects will be eligible are: - the use of a one-stop shop for administrative procedures; - accelerated permitting procedures, although longer than for strategic projects (12 or 18 months depending on the production capacity of the project).
New criteria for awarding public procurement contracts
The “access to markets” chapter of the regulation has also been fine-tuned to fulfil the Commission’s ambitions to keep its single market open to competition, but not at any price.
Thus, contracting authorities will have to base their assessments not only on the price and quality of offers, but also on the “sustainability and contribution to the resilience” of the EU.
The regulation aims to require authorities to take these two criteria into account for 15-30% of their total assessment. It is up to them to choose the exact percentage within this range and how they allocate it between sustainability and resilience.
The contribution to resilience is summarised as follows: if a technology proposed in a tender comes from an entity that already supplies the EU with more than 65% of that technology, this should be taken into account in the evaluation by the contracting authority.
However, this obligation is lifted if the prices of the other offers are disproportionate or if they lead to technical incompatibilities, the Commission says.
MEP Anna Cavazzini (Greens/EFA, German) welcomed “these new mandatory sustainability criteria in public procurement”.
CO2 storage
The regulation sets a European target of 50 million tonnes of annual injection capacity into strategic CO2 storage sites in the EU by 2030. Strategic net-zero projects for CO2 storage should accelerate the development of a European net-zero CO2 transport and storage value chain that industries can use to decarbonise their activities.
The Commission also wants to demand transparency from the Member States, which will have to provide it with information on potential CO2 storage capacities. Investors in storage sites will be provided with information on CO2 capture projects planned for the next five years.
In addition, the regulation requires EU oil and gas producers to contribute proportionately to the establishment of the necessary CO2 storage sites in the EU. These sites can be recognised as strategic ‘net-zero' projects if they are located within the EU and aim to provide operational CO2 injection capacity by 2030 or earlier, among other criteria.
Reactions
MEP Valérie Hayer (Renew Europe, French), co-rapporteur of the resolution adopted in February in the European Parliament on the European industrial strategy, welcomed the Commission's proposals, which she said “go in the right direction”. However, she insisted on the need to address the issue of funding for this industrial policy: “The proposals on the European sovereignty fund are eagerly awaited!”
As for BusinessEurope, the scope of the proposal is too narrow: “The EU must acknowledge that the decarbonisation of Europe is a matter of priority for the whole economy, industries and businesses”.
See the regulation and its annex: https://aeur.eu/f/5uz (Original version in French by Léa Marchal)