Changes from report parliamentary committee draft to plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

▸7 unchanged paragraphs

on the proposal for a regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act)

(COM(2023)0161 – C90062/2023 – 2023/0081(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0161),

– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90062/2023),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

Changed– having regard to the opinion of the European Economic and Social Committeecommittee of ...13 ,July 2023,

Change 1

Removed– after consulting the Committee of the Regions,

Added– having regard to the opinion of the Committee of Regions of 5 July 2023,

Changed– having regard to the Rule 59 of its RulesRule of Procedure,

– having regard to the opinion of the Committee on International Trade, Committee on Economic and Monetary Affairs, Committee on Employment and Social Affairs, Committee on the Environment, Public Health and Food Safety, Committee on the Internal Market and Consumer Protection, Committee on Transport and Tourism, Committee on Regional Development,

Changed– having regard to the report of the Committee on Industry, Research and Energy (A90000/2023),(A9-0343/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 2

RemovedCitation 1: Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 114, as well as 173 with regards to Chapter VI of this Regulation, thereof,

AddedAMENDMENTS BY THE EUROPEAN PARLIAMENT*

RemovedRecital -1 (new): (-1) The prime medium-term objective of European industrial policy is to enable European industry to implement the energy, climate, environmental and digital transitions, while preserving its competitiveness on the global market, maintaining jobs in Europe and strengthening its ability to innovate and produce in Europe, particularly with regard to clean technologies;

Addedto the Commission proposal

RemovedRecital 1 a (new): (1a) As outlined in the Green Deal Industrial Plan, the Union needs to take measures to ensure it can speed up net-zero industrial transformation at home. This Regulation is part of those measures and sets out measures to enhance the business case for industrial decarbonisation in Europe.

Added---------------------------------------------------------

RemovedRecital 2: (2) The Single Market provides the appropriate environment for enabling access at the necessary scale and pace to the technologies required to achieve the Union’s climate ambition as well as the promise of the European Green Deal to turn decarbonisation into sustainable competitiveness. Given the complexity and the transnational character of net-zero technologies, uncoordinated national measures to ensure access to those technologies would have a high potential of distorting competition and fragmenting the Single market. Therefore, to safeguard the functioning of the Single market it is necessary to create a common Union legal framework to collectively address this central challenge by increasing the Union’s resilience and security of supply in the field of net-zero technologies.

Added2023/0081 (COD)

RemovedRecital 2 a (new): (2a) The International Energy Agency estimates that the global market for key mass-manufactured clean energy technologies will be worth around USD 650 billion a year by 2030, which is more than three times today’s level. The net-zero industry globally is growing at an increasing rate, to the extent of demand sometimes outpacing supply. The European Union industry is part of an open, export-oriented, capital intensive, social market economy that can deliver prosperity for Union citizens only if it is competitive on and open to the global market. The Union’s ambition for the net-zero industry should be aligned with that reality and should aim tocapture a significant global market share.

AddedProposal for a

RemovedRecital 3: (3) Regarding external aspects, the Union will step up its efforts to join forces with open, democratic partners committed to the Paris Agreement. Regarding emerging markets and developing economies, the EU will seek win-win partnerships in the framework of its Global Gateway strategy, which contribute to the diversification of its raw materials supply chain as well as to partner countries’ efforts to pursue twin transition and develop local value addition.

AddedREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

RemovedWith the rise of authoritarianism globally challenging the open, rules-based order embodied by the Union, it is important that we strengthen our bonds with like-minded countries, both politically and economically.

Addedon establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act)

RemovedRecital 4: (4) To fulfil those commitments, the Union must accelerate its pace of transition to a net-zero economy, including by increasing the share of clean energy in its energy mix, as well as by increasing energy efficiency and the share of renewable energy sources. This will contribute to achieving the EU targets of the European Pillar of Social Rights Action Plan for 2030 of an employment rate of at least 78% and participation in training of at least 60% of adults. It will also contribute to ensuring that the green transition is fair and equitable34.

Added(Text with EEA relevance)

RemovedRecital 6: (6) The net-zero transformation is already causing huge industrial, economic, and geopolitical shifts across the globe, which will become ever more pronounced as the world advances in its decarbonisation efforts. The road to net zero translates into strong opportunities for the expansion of Union’s net-zero industry, making use of the strength of the Single Market, by promoting investment in net-zero technologies and their supply chains, allowing for the decarbonisation of our economic sectors, from energy supply to transport, buildings, and industry. A strong net zero industry within the European Union can help significantly in reaching the Union’s climate and energy targets effectively, as well as in supporting other Green Deal objectives, such as creating sustainable jobs and growth, by creating an industrial base geared towards export as well as domestic supply.

AddedTHE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

RemovedClarifying what the promise of the Green Deal was from the beginning.

AddedHaving regard to the Treaty on the Functioning of the European Union, and in particular Articles 114 thereof,

RemovedRecital 7: (7) To meet the climate and energy targets, energy efficiency needs to be prioritised. Saving energy is the cheapest, safest and cleanest way to meet those targets. ‘Energy efficiency first’ is an overall principle of EU energy policy and is important in both its practical applications in policy and investment decisions. Therefore, it is essential to expand the Union’s manufacturing capacity for energy efficient technologies, such as heat pumps and smart grid technologies, that help the EU reduce and control its energy consumption.

AddedHaving regard to the proposal from the European Commission,

RemovedEnergy efficiency remains important post-2030

AddedAfter transmission of the draft legislative act to the national Parliaments,

RemovedRecital 8 a (new): (8a) Clustering industrial activity directed towards industrial symbiosis minimises the environmental impact of the activities as well as providing efficiency gains for industry. As such, clustering can contribute substantially to achieving the objectives of this Regulation. This Regulation promotes in this regard the development of Net-Zero Industry Valleys (Valleys). Those Valleys shall be limited in geographical and technology scope in order to promote industrial symbiosis.

AddedHaving regard to the opinion of the European Economic and Social Committee,

RemovedRecital 8 b (new): (8b) Member States should be able to designate and support Valleys. When designating a Valley the Member State should draw up a plan for the Valley specifying which net-zero manufacturing activity is to be covered in the Valley (Plan). The Member State should also conduct the environmental impact assessments as required for the net-zero manufacturing activities that are to take place in the Valley. Such an impact assessment eliminates the need for undertakings to perform those assessments for permits for the net-zero manufacturing activities in the scope of the Valley. The Plan should include the results of the environmental impact assessments as well as the national measures to be taken to minimise or mitigate negative environmental impact. The Plan should also include concrete national measures to support industrial activity in the scope of the Valley. Those measures should include measures to invest in or trigger private investment in energy, digital and transport infrastructure as well as measures to reduce the operational expenditure for the industry in the Valley, such as contracts of difference for energy prices. In order to provide investment security for industry, the Plan should also specify the duration of the support measures.

AddedHaving regard to the opinion of the Committee of the Regions,

RemovedRecital 9: (9) Additional policy effort is necessary to support those technologies that are commercially available and have a good potential for rapid scale up to support the Union’s climate targets, improve the security of supply for net-zero technologies and their supply chains, and safeguard or strengthen the overall resilience and competitiveness of the Union’s energy system. It includes access to a safe and sustainable source of best in class fuels, as described in recital 8 of Commission Delegated Regulation (EU) 2022/1214.

AddedActing in accordance with the ordinary legislative procedure,

RemovedThe efforts under this Act will contribute to the objectives post-2030

AddedWhereas:

RemovedRecital 10: deleted

Added(-1) The prime medium-term objective of European industrial policy is to enable Union industry to implement the energy, climate, environmental and digital transitions, while preserving its competitiveness on the global market, maintaining quality jobs in Europe and strengthening its ability to innovate and produce in Europe, particularly with regard to clean technologies.

RemovedRecital 11 a (new): (11a) Since 2007 the Strategic Energy Technology Plan (SET Plan) has been driving the Union's innovation in energy technologies1a. As such the SET Plan has significantly contributed to strong knowledge base on energy technologies and has been essential for the alignment of strategic priorities on research, innovation and deployment of clean energy technologies. To ensure that the Union can deliver its full carbon-neutrality objectives by 2050, that knowledge base needs to be leveraged and further enhanced. The SET Plan is therefore an irreplaceable instrument for the achievement of the objectives of this Regulation and is the backbone for the innovation agenda of this Regulation. / 1a [Reference to 2007 and 2015 Commission Communications on SET Plan to be added]

Added(1) The Union has committed to the accelerated decarbonisation of its economy and ambitious deployment of renewable energy sources to achieve climate neutrality or net zero emissions (emissions after deduction of removals) by 2050. That objective is at the heart of the European Green Deal, the updated EU Industrial Strategy, and in line with the Union’s commitment to global climate action under the Paris Agreement1. To reach the climate neutrality goal, Regulation (EU) 2021/1119 of the European Parliament and of the Council sets a binding Union climate target to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990. The proposed “Fit for 55” package aims to deliver on the Union’s 2030 climate target and revises and updates Union legislation in this respect.

RemovedRecital 12 a (new): (12a) Carbon dioxide capture and storage (CCS) is a technology that will contribute to mitigating climate change. It consists of the capture of carbon dioxide (CO2) from industrial installations, its transport to a storage site and its injection into a suitable underground geological formation for the purposes of permanent storage.

Added(1a) As outlined in the Green Deal Industrial Plan, the Union needs to take measures to ensure it can speed up net-zero industrial transformation at home. This Regulation is part of those measures and aims to enhance the business case for industrial decarbonisation in the Union.

RemovedRecital 13: (13) The development of carbon capture and storage solutions for industry is confronted with a coordination failure. Firstly, despite the growing CO2 price incentive provided by the EU Emissions Trading System, for industry to invest into capturing CO2 emissions making such investments economically viable, they face a significant risk of not being able to access a permitted geological storage site. Secondly, investors into first CO2 storage sites face upfront costs to identify develop and appraise them even before they can apply for a regulatory storage permit. Transparency about potential CO2 storage capacity in terms of the geological suitability of relevant areas and existing geological data, in particular from the exploration of hydrocarbon production sites, can support market operators to plan their investments. Member State should make such data publicly available and report regularly in a forward-looking perspective about progress in developing CO2 storage sites and the corresponding needs for injection and storage capacities above, in order to collectively reach the Union-wide target for CO2 injection capacity. Thirdly, CO2 storage projects are only economically viable when there is a business case along the full value chain, including transportation. Any legal storage obligations should therefore be accompanied by effective policies and measures to ensure coordination and investment across the value chain.

Added(1b) In the interest of the Union's strategic autonomy, a greater focus on the circularity and long lifespans of technologies is essential to strengthen the resilience of Union’s manufacturing industry, while reducing its environmental impacts to contribute to its sustainable competitiveness.

RemovedRecital 14: (14) A key bottleneck for carbon capture investments that are today increasingly economically viable is the availability of operating CO2 storage sites in Europe, which underpin the incentives from Directive 2003/87/EC. To scale up the technology and expand its leading manufacturing capacities, the EU needs to develop a forward-looking supply of permanent geological CO2 storage sites permitted in accordance with Directive 2009/31/EU36. By defining a Union target of 50 million tonnes of annual operational CO2 injection capacity by 2030, in line with the expected capacities needed in 2030, the relevant sectors can coordinate their investments towards a European Net-Zero CO2 transport and storage value chain that industries can use to decarbonise their operations. This initial deployment will also support further CO2 storage in a 2050 perspective. According to the Commission’s estimates, the Union could need to capture up to 550 million tonnes of CO2 annually by 2050 to meet the net zero objective37 , including for carbon removals. Such a first industrial-scale storage capacity will de-risk investments into the capturing of CO2 emissions as important tool to reach climate neutrality. In view of the expected storage requirements in 205038a, the EU CO2 storage market will have to be complemented by a market that covers third countries in Europe with large storage potential. When this regulation is incorporated into the EEA Agreement, the Union target of annual operational CO2 inje…

Added(2) The Single Market provides the appropriate environment for enabling access at the necessary scale and pace to the technologies required to achieve the Union’s climate ambition as well as the promise of the European Green Deal to turn decarbonisation into sustainable competitiveness. Given the complexity and the transnational character of net-zero technologies, uncoordinated national measures to ensure access to those technologies would have a high potential of distorting competition and fragmenting the Single market. Therefore, to safeguard the functioning of the Single market it is necessary to create a common Union legal framework to collectively address this central challenge by increasing the Union’s resilience and security of supply in the field of net-zero technologies.

RemovedA significant amount of storage potential is available in the territory of the Union's neighbouring countries. This should be utilised in the long-term.