Changes from adopted text to adopted text

Removed(15) By defining CO2 storage sites that contribute to the Union’s 2030 target as net-zero technology manufacturing projects, or net-zero strategic projects, the development of CO2 storage sites can be accelerated and facilitated, and the increasing industrial demand for storage sites can be channelled towards the most-cost-effective storage sites. An increasing volume of depleting gas and oil fields that could be converted in safe CO2 storage sites are at the end of their useful production lifetime. In addition, the oil and gas industry has affirmed its determination to embark on an energy transition and possesses the assets, skills and knowledge needed to explore and develop additional storage sites. To reach the Union’s target of 50 million tonnes of annual operational CO2 injection capacity by 2030, the sector needs to pool its contributions to ensure that carbon capture and storage as a climate solution is available ahead of demand. In order to ensure a timely, Union-wide and cost-effective development of CO2 storage sites in line with the Union objective for injection capacity, licensees of oil and gas production in the Union should contribute to this target pro rata of their oil and gas manufacturing capacity, while providing flexibilities to cooperate and take into account other contributions of third parties. Licensees of oil and gas production within the Union should make every effort within their authority to undertake the requisite investments in order to meet their respective contribution towards the achieving of annual operational CO2 injection capacity. However, these efforts should be subject to objective commercial, financial, technical, legal, and environmental limitations beyond the control of these companies, which may lead to individual storage projects, despite reasonable and commercially prudent efforts, being objectively unable to be completed in time to fulfil the obligations set out under this Regulation.

Removed(15a) Additional policy effort is necessary to support the cross-border transportation of CO2 as the London Protocol initially prohibits export of CO2 for permanent geological storage below the seabed. The London Protocol was amended by contracting parties in 2009 to allow for cross border transportation of CO2 for sub-seabed storage, but the amendment must be ratified by two thirds of contracting parties to enter into force. It is unlikely that this will occur in the near term. Additional policy effort is necessary to address the barrier to deployment and the creation of an internal market for cross-border transportation of CO2.

Removed(15b) Additional policy effort is essential to secure the deployment of cross-border infrastructure planning. Accessibility and connectivity of the full range of CO2 transportation arrangements play a critical role for the deployment of CCS and Carbon Capture and Utilisation (CCU) projects. Such arrangements cover ship, barge, train and truck as well as fixed facilities for connecting and docking, for liquefaction, buffer storage and converters of CO2 in view of its further transportation through pipelines and in dedicated modes of transport.

Removed(15c) The Commission should ensure a continuous revision and extension of the CO2 injection capacity and storage target for the period post-2030 to reflect the needs of the Union to reach its 2040 climate target and climate neutrality by 2050 in synergy with related Union law.

Removed(15d) Using captured CO2 in certain production processes can permanently store CO2 and/or contribute to reducing the Union's dependence on fossil fuels. Therefore, all entities involved in the value chain of CO2 injection activities set out in this Regulation should be encouraged to consider if the CO2 that is to be stored could be permanently stored in new products or could support the Union's objectives to reduce its reliance on fossil fuels.

Removed(16) The Union has helped build a global economic system based on open, transparent and rules-based trade, pushed for respecting and advancing social and environmental sustainability and climate transition standards, and is fully committed to those values. The Union aims to level the playing field, in particular by fighting against unfair trading practices and production overcapacity, to secure a fair competitive environment for Union industry, including through net-zero industrial partnerships (Net-Zero Industrial Partnerships), providing quality jobs for workers.

Removed(17) To address security of supply issues and contribute to supporting the resilience of Union’s energy system and decarbonisation and modernisation efforts, the net-zero technology manufacturing capacity in the Union needs to expand. Union manufacturers of solar photovoltaic (PV) technologies need to increase their competitive edge and improve security of supply perspectives, by aiming to reach at least 30 gigawatt of operational solar PV manufacturing capacity by 2030 across the full PV value chain, in line with the goals set out in the European Solar Photovoltaic Industry Alliance, which is supported under the Union’s Solar Energy Strategy. Union manufacturers of wind and heat pump technologies need to consolidate their competitive edge and maintain or expand their current market shares throughout this decade, in line with the Union’s technology deployment projections that meet its 2030 energy and climate targets. This translates into a Union manufacturing capacity for wind of at least 36 GW and, respectively, for heat pumps of at least 31 GW in 2030. Union manufacturers of batteries and electrolysers need to consolidate their technology leadership and actively contribute to shaping these markets. For battery technologies this would mean contributing to the objectives of the European Battery Alliance and aim at almost 90% of the Union’s battery annual demand being met by the Union’s battery manufacturers, translating into a Union manufacturing capacity of at least 550 GWh in 2030. For Union electrolyser manufacturers, the REPowerEU plan projects 10 million tonnes of domestic renewable hydrogen production and a further up to 10 million tonnes of renewable hydrogen imports by 2030. To ensure Union’s technological leadership translates into commercial leadership, as supported under the Electrolyser Joint Declaration of the Commission and the European Clean Hydrogen Alliance, Union’s electrolyser manufacturers should further boost their capacity, such that the overall installed electrolyser capacity being deployed reaches at least 100 GW hydrogen by 2030. The RePowerEU plan sets furthermore an objective of boosting sustainable biomethane production to 35 billion cubic meter by 2030. With its supply chain largely based in Europe today, biomethane already makes a contribution to Union’s resilience which should be further promoted.

Removed(18) Considering these objectives together, while also taking into account that for certain elements of the supply chain (such as inverters, as well as solar cells, wafers, and ingots for solar PV or cathodes and anodes for batteries) the Union manufacturing capacity is low, the Union’s annual manufacturing capacity should aim to reachleast 40% of annual deployment needs by 2030 for the net-zero technologies defined in this Regulation. Moreover, the Union’s net-zero technologies annual manufacturing capacity should cover at least 25% of global demand for the corresponding technologies.

Removed(19) Increasing the manufacturing capacity of net-zero technologies in the ▌Union will increase the global supply of net-zero technologies and the transition towards clean economic development globally. Together with other measures to enhance the Union’s competitiveness, measures to increase the manufacturing capacity in the Union should also ensure that the Union should play a dominant role in strategic parts of the value chain, including final products, to ensure the level of security of supply that the Union needs for the purpose of achieving its climate objectives.

Removed(20) At the same time, net-zero technology products will contribute to the Union’s resilience and security of supply of clean energy. A secure supply of clean energy is a prerequisite for economic development, as well as for public order and security. Net-zero technology products will also yield benefits to other strategically important economic sectors, such as farming and food production by securing access to clean energy and machinery at competitive prices, thus contributing sustainably to EU food security and to providing an increasing outlet for bio-based alternatives through circular economy. In the same way, the fulfilment of the Union’s climate ambitions will translate both into economic growth and social well-being.

Removed(21) The manufacturing of net-zero technologies depends on complex and globally interlinked value chains. In order to maintain competitiveness and reduce current strategic import dependencies in key net-zero technology products and their supply chains, while avoiding the formation of new ones, the Union needs to continue strengthening its ▌industrial base and become more competitive and innovation friendly. The Union needs to enable the development of manufacturing capacity faster, simpler and in a more predictable way by reducing the regulatory and administrative burden on industrial activities within its territory and levelling the playing field with international competitors. In particular, the Union should, by 2030, aim to achieve a 20% reduction of the general regulatory burden on industry, a 40% reduction of the regulatory burden for placing a new product on the internal market, and a 40% reduction of the administrative burden for SMEs and start-ups. Those efforts should, in particular, be made within the Better Regulation framework and without prejudice to the Union’s environmental and labour standards. The Commission should report on the progress towards those objectives in its Annual Burden Survey.

Removed(21a) In order to ensure the Union’s access to a secure and sustainable supply of net-zero technologies needed to safeguard the Union’s resilience and in order to reach its climate neutrality targets, the internal market needs to be a supportive environment for innovation in net-zero technologies to take place. Innovation will be a crucial factor in ensuring the Union’s competitiveness as well as reaching net-zero objectives as soon as possible. Given the rapid developments in net-zro technologies as well as the significant regulatory guidance provided for the green transition, it is of utmost importance for the achievement of the objectives of this Regulation that the potential impacts of Union legislation and policy initiatives on innovation are thoroughly considered during their preparation, review and revision through the application of the innovation principle as set out in the Better Regulation Tool #22 as well as the Commission communication of 15 May 2018 entitled “A renewed European Agenda for Research and Innovation - Europe's chance to shape its future”.

Removed(21b) The reduction of the regulatory and administrative burdens as well as having a suitable regulatory framework is particularly important for SMEs. Therefore, the Commission should appoint an SME Envoy as an adviser to its President. The SME Envoy should have a mandate to ensure that the interests of SMEs are sufficiently reflected the Union's policies and legal acts. Every new Commission should be able to appoint an SME Envoy within six months of its own appointment.

Removed(21c) The Transition Pathways that are being developed following the Updated EU Industry Strategy of 2021 should be updated to reflect the objectives of this Regulation and should identify enablers as well as bottlenecks for the transition and global competitiveness of Union industry.

Removed(22) Pursuant to Regulation (EU) 2018/1999 of the European Parliament and of the Council Member States should submit updated drafts of their 2021-2030 National Energy and Climate Plans (NECPs) in June 2023. As emphasised in the Commission’s Guidance to Member States for the update of the 2021-2030 national energy and climate plans, the updated plans should describe Member States’ objectives and policies to facilitate the scale-up of manufacturing projects of commercially available energy efficient and low-carbon technologies, equipment and key components within their territory. Those plans should also describe Member States’ objectives and policies to achieve such scale-up through diversification efforts in third countries, and to enable their industries to capture and store CO2 emissions permanently in geological storage sites. Those national energy and climate plans should form the basis upon which the need for net-zero technologies are determined.

Removed(23) In addition, the Communication on the Green Deal Industrial Plan for the Net-Zero Age sets out a comprehensive approach to support a clean energy technology scale up based on four pillars. The first pillar aims at creating a regulatory environment that simplifies and fast-tracks permitting for new net-zero technology manufacturing and assembly sites and facilitates the scaling up of the net-zero industry of the Union. The second pillar of the plan is to boost investment in and financing of net-zero technology production, through the revised Temporary Crisis and Transition Framework adopted in March 2023 and the creation of a European Sovereignty fund to preserve the Union’s edge on critical and emerging technologies relevant to the green and digital transitions. The third pillar relates to developing the skills needed to make the transition happen and increase the number of skilled workers in the clean energy technology sector. The fourth pillar focuses on trade and the diversification of the supply chain of critical raw materials. That includes creating a critical raw materials club, working with like-minded partners to collectively strengthen supply chains and diversifying away from single suppliers for critical input.

Removed(24) Under the first pillar, the Union should develop and maintain an industrial basis for the provision of net-zero technology solutions to secure its energy supply, while also living up to its ambitions on climate neutrality. To support that goal and to avoid dependencies for the supply of net-zero technologies that would delay the Union’s greenhouse gas emission reductions efforts or put at risk the security of supply of energy, this Regulation shall set out provisions to encourage demand for sustainable and resilient net-zero technologies.

Removed(25) Directives 2014/23/EU, 2014/24/EU and 2014/25/EU of the European Parliament and of the Council already allow contracting authorities and entities awarding contracts through public procurement procedures to rely, in addition to price or cost, on additional criteria for identifying the most economically advantageous tender. Such criteria concern for instance the quality of the tender including social, governance, environmental and innovative characteristics. When awarding contracts for net-zero technology through public procurement, contracting authorities and contracting entities should duly assess the tenders’ contribution to environmental and social sustainability and resilience in relation to a series of criteria relating to the tender’s environmental sustainability, innovation, system integration and to resilience. Contracting authorities and entities must ensure that procedures treat providers established in other Member States equally to national providers and to ensure non-discrimination when establishing criteria.

Removed(26) Social sustainability criteria can already be applied under existing legislation and can include working conditions and collective bargaining in line with the European Pillar of Social Rights in line with Article 30(3) of Directive 2014/23/EU, Article 18(2) of Directive 2014/24/EU and Article 36(2) of Directive 2014/25/EU. Contracting authorities should consider the tenders contribute to social sustainability by taking the appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of Union and national social and labour law as well as in collective agreements or by the international environmental, social and labour law provisions listed in Annex X to Directive 2014/23/EU, Annex X to Directive 2014/24/EU and Annex XIV to Directive 2014/25/EU, and offer attractive employment.

Removed(27) Without prejudice to Union legislation applicable to a specific technology, including under the Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and the Proposal for a Regulation of the European Parliament and of the Council concerning batteries and waste batteries, and unless otherwise indicated therein, when evaluating the environmental sustainability of net-zero solutions procured on the basis of this Regulation, contracting authorities and contracting entities are encouraged to take into account various elements with an impact on the climate and the environment. These may include, for instance, the durability and reliability of the solution; the ease of repair and maintenance; the ease of upgrading and refurbishment; the ease and quality of recycling; the use of certain substances; the consumption of energy, water and other resources in one or more life cycle stages of the product; the weight and volume of the product and its packaging; the incorporation renewable materials or of used components; the quantity, characteristics and availability of consumables needed for proper use and maintenance; the environmental footprint of the product and its life cycle environmental impacts; the carbon footprint of the product; the microplastic release; emissions to air, water or soil released in one or more life cycle stages of the product; the amounts of waste generated; the conditions for use. In line with the Union’s Cybersecurity Strategy, contracting authorities for tenders under this Regulation should reject offers which have not been certified under the relevant cyber security certification scheme.

Removed(28) For the purposes of ensuring a more secure supply by taking into account within a public procurement procedure the need to diversify sources of supply of net-zero technologies away from single sources of supply within the meaning of Article 19(2), and without prejudice to the Union’s international commitments, the supply should at least be deemed insufficiently diversified where a single source supplies for more than 65% of the demand for a specific net-zero technology within the Union.

Removed(29) For the purposes of setting up schemes benefitting households, businesses, or consumers which incentivise the purchase of net-zero technology final products, and without prejudice to the Union’s international commitments, the supply should be deemed insufficiently diversified where a single source supplies more than 50% of the total demand within the Union for a specific net-zero technology ▌. To ensure a consistent application, the Commission should publish a yearly list starting on the date of application of this Regulation, of the distribution of the origin of net zero technology final products which fall under this category, broken down by the share of Union supply originating in different sources in the last year for which data is available.

Removed(30) Council Decision 2014/115/EU approved in particular the amendment to the World Trade Organisation Agreement on Government Procurement (the ‘GPA’) ▌. The aim of the GPA is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade. For contracts covered by the Union’s Appendix I to the GPA, as well as by other relevant international agreements by which the Union is bound, including free trade agreements and the Article III:8(a) of the General Agreement on Tariffs and Trade of 1994 for procurement by governmental agencies of products purchased with a view to commercial resale or with a view to use in the production of goods for commercial sale, contracting authorities and contracting entities should not apply the requirements of Article 19(2a) and Article 19(4a), point (a) to economic operators of sources of supply that are signatories to the agreements.

Removed(31) The application of the provisions on resilience in public procurement procedures set out in Article 19 of this Regulation should be without prejudice to the application of Regulation (EU)2022/1031/EU of the European Parliament and the Council, Article 25 of Directive 2014/24/EU ▌, and Articles 43 and 85 of Directive 2014/25/EU ▌, in accordance with the Commission’s guidance of 2019. The same way, public procurement provisions should continue to apply to works, supplies and services subject to Article 19, including Article 67(4) of Directive 2014/24/EU and any implementing measures resulting from the Proposal for a Regulation establishing a framework for setting ecodesign requirements for sustainable products and the Regulation (EU) 2023/1542 of the European Parliament and of the Council.

Removed(32) The weighting of criteria on the sustainability and resilience contribution of the tender in relation to public procurement procedures is a minimum threshold. Within this minimum threshold, the contracting authorities and contracting entities may differentiate the weighting of the individual criteria, without ignoring one completely. Contracting authorities and contracting entities may always set a higher threshold for one or several relevant criteria on sustainability and resilience contribution. Given the importance of increasing the resilience of the Union’s energy system, the contracting authorities and contracting entities should pay significant attention to the resilience contribution.

Removed(33) In order to limit administrative burden resulting from the need to take into account criteria relating to the sustainability and resilience contribution of the tender, in particular for smaller public buyers and for contracts of lower value which do not have an important impact on the market, the application of the relevant provisions of this Regulation should be deferred for two years for public buyers which are not central purchasing bodies and for contracts of a value below EUR 25 million.

Removed(34) For the purposes of the application of the provisions on public procurement according to Article 19 of this Regulation, where a product is covered by a delegated act adopted under Regulation (EU) 2017/1369 of the European Parliament and of the Council, contracting authorities or contracting entities should purchase only the products that comply with the obligation laid down in Article 7(2) of that Regulation.

Removed(35) Households, business and final consumers are an essential part of the Union’s demand for net-zero technologies final products and public support schemes to incentivize the purchase of such product by households, in particular for vulnerable low- and lower middle-class income households and consumers, are important tools to accelerate the green transition. Under the solar rooftop initiative announced in the EU solar strategy ▌, Member States should for instance set-up national programmes to support the massive deployment of rooftop solar energy. In the REPowerEU plan, the Commission called Member States to make full use of supporting measures which encourage switching to heat pumps. Such support schemes set up nationally by Member States or locally by local or regional authorities should also contribute to improving the sustainability and resilience of the Union net-zero technologies. Public authorities should for instance provide higher financial compensation to beneficiaries for the purchase of net-zero technology final products that will make a higher contribution to resilience in the Union. Public authorities should ensure that their schemes are open, transparent and non-discriminatory, so that they contribute to increase demand for net-zero technology products in the Union. Public authorities should also limit the additional financial compensation for such products so as not to slow down the deployment of the net-zero technologies in the Union. To increase the efficiency of such schemes Member States should ensure that information is easily accessible both for consumers and for net-zero technology manufacturers on a free website. The use by public authorities of the sustainability and resilience contribution in schemes targeted at consumers or households should be without prejudice to State aid rules and to WTO rules on Subsidies.

Removed(36) When designing schemes benefitting households, businesses or consumers which incentivise the purchase of net-zero technology final products listed in Article 3 of this Regulation, Member States, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law, should ensure the respect of the Union’s international commitments, including by ensuring that schemes are compatible with WTO provisions and do not reach a magnitude that causes serious prejudice to the interest of WTO members.

Removed(37) A net-zero Europe platform (Net-Zero Europe Platform) should also play an important role in accelerating the implementation of the sustainability and resilience contribution by Member States and public authorities in their public procurement and auctioning practices and the Commission should also assist Member States in the design of schemes targeted at households, businesses and consumers to build synergies and exchange best practices. It is important that both the contracting authorities or contracting entities and the producing companies have a clear understanding of each of the sustainability and resilience criteria. Therefore, the Commission should, in close collaboration with the Net-Zero Europe Platform, adopt an implementing act specifying the criteria to assess the resilience and sustainability contribution, with a particular attention for SMEs, who should have a fair chance to participate in the substantial market for public procurement. Coherence with all existing legislation will be key. Furthermore, that implementing act should clarify the derogations provided for in Article 19(4). Besides, the Commission should, in close collaboration with the Net-Zero Europe Platform, issue guidance on how to link the sustainability and resilience criteria with future legislation. That guidance can further provide concrete and specific examples and best practices. In order to be coherent with all future legislation, the Commission should update its guidance at least every six months.

Removed(38) In order to ensure that public procurement and auctions to deploy renewable energy sources truly contribute to the Union's resilience, these activities need to be predictable for industry. To enable the industry to adjust its production on time, contracting authorities and contracting entities should inform the market in advance of their estimated procurement needs for net-zero technology products. Auctions should also reflect that inflation, together with the long lead time of renewable energy deployment projects, creates a significant risk for businesses and this might discourage businesses from bidding. To provide certainty about the business case of an auction bid, Member States should ensure that all auctions include an inflation indexation mechanism. Furthermore, Member States should, where appropriate, exclude negative bids from auctions as these bids might lead to unexpectedly high energy prices for customers of the deployed renewable energy production.

Removed(39) As indicated in the Communication on the Green Deal Industrial Plan for the Net-Zero Age, published on 1 February 2023, the Union’s industry’s market shares are under strong pressure, due to subsidies in third countries which undermine a level playing field. Some third countries are rolling out support schemes that aim to anchor and attracting clean tech industry. This situation presents a competitive challenge for the Union to maintain and develop its own industry. This translates in a need for a rapid and ambitious reaction from the Union in modernising its legal framework to compete globally defending open and fair trade by making full and efficient use of all available tools including trade defence instruments, and by promoting Union standards for net-zero technologies.

Removed(39a) Considering the Union's goal to reduce strategic dependencies on third countries for net-zero technologies, it is crucial that public support mechanisms, such as procurement and auctions, do not exacerbate such dependencies. Therefore, limitations should be set on the proportion of products in supply contracts sourced from third countries, in accordance with Regulation (EU) No 952/2013 of the European Parliament and of the Council and Directive 2014/25/EU of the European Parliament and of the Council. Furthermore, Regulation (EU) 2022/1031 and Regulation (EU) 2022/2560 of the European Parliament and of the Council should be used to their fullest extent in order to ensure that Union companies do not face unfair competition for public contracts.

Removed(39b) To achieve the objectives of this Regulation, a dedicated source of public funding is necessary to support the projects carried out pursuant to it. That funding should ensure that companies across the Union have access to the needed funding, regardless of the fiscal capacities of the Member States in which the project is to be developed. The 2021-2027 Multiannual Financial Framework (MFF) as greed in 2020 does not provide for this. The Strategic Technologies for Europe Platform ‘STEP’ partly addresses the needed support for projects under this Regulation. While the STEP relies on the reprogramming and reinforcement of existing programmes for supporting strategic investments, it is also an important element for testing the feasibility and preparation of new interventions as a step towards a European Sovereignty Fund. The evaluation of STEP in 2025 is to assess the relevance of the actions undertaken and serve as basis for assessing the need for an upscaling of the support towards strategic sectors.

Removed(40) Access to public and private finance is key for ensuring the Union’s open strategic autonomy and for establishing a solid and competitive manufacturing base for net-zero technologies and their supply chains across the Union. The majority of investments necessary to reach the Green Deal objectives will come from private capital attracted by the growth potential of the net-zero ecosystem. Well-functioning, deep and integrated capital markets will therefore be essential to raise and channel the funds needed for the green transition and net-zero technology manufacturing projects. Swift progress towards the Capital Markets Union is thus necessary for the Union to deliver on its net-zero objectives. The sustainable finance agenda (and blended finance) also plays a crucial role in scaling up investments into the net-zero technologies, while guaranteeing the competitiveness of the sector. As indicated in the Staff Working Document accompanying this Regulation, investment needs amount to around EUR 92 billion over the period 2023 to 2030, with a range of between about EUR 52 to 119 billion depending on various scenarios, which would result in public funding requirements of EUR 16 to 18 billion. Considering that this assessment only takes into account five specific technologies, the real investment need is likely to be significantly higher.

Removed(41) Where private investment alone is not sufficient, the effective roll-out of net-zero manufacturing projects may require public support in the form of State aid. Such aid must have an incentive effect and be necessary, appropriate and proportionate. The existing State aid guidelines that have recently undergone an in-depth revision in line with the twin transition objectives provide ample possibilities to support investments for projects in the scope of this Regulation subject to certain conditions. Member States can have an important role in easing access to finance for net-zero technologies manufacturing projects by addressing market failures through targeted State aid support. The Temporary Crisis and Transition Framework (TCTF) adopted on 9 March 2023 aims at ensuring a level playing field within the internal market, targeted to those sectors where a third-country delocalisation risk has been identified, and proportionate in terms of aid amounts. It would enable Member States to put in place measures to support new investments in production facilities in defined, strategic net-zero sectors, including via tax benefits. The permitted aid amount can be modulated with higher aid intensities and aid amount ceilings if the investment is located in assisted areas, in order to contribute to the goal of convergence between Member States and regions. Appropriate conditions are required to verify the concrete risks of diversion of the investment outside the European Economic Area (EEA) and that there is no risk of relocation within the EEA to avoid a fragmentation of the internal market. To mobilise national resources for that purpose, Member States may use a share of the Union’s Emissions Trading System (EU ETS) revenues that Member States have to allocate for climate-related purposes.

Removed(41a) Multiple sources of financing should be made fully available such as unused amounts of the Recovery and Resilience Facility, dedicated support from the EU Innovation Fund, dedicated financing schemes from the European Investment Bank, and utilisation to the greatest extent possible, of all MFF funds that have not yet been utilised. More investments form the private sector should be stimulated through dedicated State guarantees, especially when it comes to industrial investments in net-zero technology manufacturing projects, including net-zero strategic projects.

Removed(42) Several Union funding programmes, such as the Recovery and Resilience Facility, InvestEU, cohesion policy programmes or the Innovation Fund are also available to fund investments in net-zero technology manufacturing projects. The current EU budget is not sufficient for supporting the objectives of this Regulation or for ensuring a level-playing field among Member States. The revision of the 2021-2027 MFF should therefore provide for a European budget fit for purpose. In this regard, the STEP should also provide additional financial means partly dedicated to net-zero manufacturing projects contributing to the reduction of strategic dependencies of the Union and the competitiveness of its industry.

Removed(43) The amended Recovery and Resilience Facility Regulation made available an additional EUR 20 billion of non-repayable support to Member States in order to promote energy efficiency and replace fossil fuels, amongst others through EU net- zero industry projects. As pointed out in the Commission Guidance on the REPowerEU chapters, Member States are encouraged to include in the REPowerEU chapter of their recovery and resilience plans, measures supporting investments in net-zero technologies manufacturing and industrial innovation, in accordance with Regulation (EU) 2021/241 of the European Parliament and of the Council.

Removed(43a) With the increase of EU ETS prices, revenues from the EU ETS for Member States have increased substantially. To promote the decarbonisation of Union industry, Member States should significantly increase their allocation of national revenues stemming from the EU ETS to support the decarbonisation of industry and should therefore allocate at least 25% of their national revenues stemming from the EU ETS to support the objectives of this Regulation.

Removed(44) InvestEU is the Union flagship programme to boost investment, especially the green and digital transition, by providing financing and technical assistance, for instance through blending mechanisms. Such approach contributes to crowd in additional public and private capital. In addition, Member States are encouraged to contribute to the InvestEU Member State compartment to support financial products available to net-zero technology manufacturing, without prejudice to applicable State aid rules.

Removed(45) Member States can provide support from cohesion policy programmes in line with applicable rules under Regulation (EU) 2021/1060 of the European Parliament and of the Council to encourage the take up of net-zero strategic projects as well as net-zero technology manufacturing projects in all regions, especially in less developed regions transition regions and Just Transition Funds territories, through investment packages of infrastructure, productive investment in innovation, manufacturing capacity in SMEs, services, training and upskilling measure, including support to capacity building of the public authorities and promoters. The applicable co-financing rates set in programmes may be up to 85% for less developed regions and up to 60% or 70% for transition regions depending on the fund concerned and the status of the region but Member States may exceed these ceilings at the level of the project concerned, where feasible under State aid rules. The Technical Support Instrument can help Member States and regions in preparing net-zero growth strategies, improve the business environment, reducing red tape and accelerating permitting. Member States should be encouraged to promote the sustainability of net-zero ▌ projects by embedding these investments in European value chains, building notably on interregional and cross border cooperation networks. The adoption of such measures should be considered in particular with regard to Valleys.

Removed(46) The Innovation Fund also provides a very promising and cost efficient avenue to support the scaling up of manufacturing and deployment of clean hydrogen and other net zero technologies in Europe, thus reinforcing Europe’s sovereignty in key technologies for climate action and energy security.

Removed(47) A European Sovereignty Fund would provide a structural answer to the investment needs. It will help preserving a European edge on critical and emerging technologies relevant to the green and digital transitions, including net-zero technologies. This structural instrument will build on experience of coordinated multi-country projects under the IPCEIs and seek to enhance all Member States’ access to such projects, thereby safeguarding cohesion and the Single Market against risks caused by unequal availability of State Aids. The [STEP Regulation] can be considered to be a step towards the establishment of a European Sovereignty Fund that could contribute to shaping and strengthening a European industrial policy by providing increased funding to European industry in the MFF after 2027.

Removed(48) To overcome the limitations of the current fragmented public and private investments efforts, facilitate integration and return on investment, the Commission, and Member States should better coordinate and create synergies between the existing funding programmes at Union and national level as well as ensure better coordination and collaboration with industry and key private sector stakeholders. The Net-Zero Europe Platform has a key role to play to build a comprehensive view of available and relevant funding opportunities and to discuss and coordinate support for the individual financing needs of net- zero strategic projects. The projects for discussion should be those brought forward by a Member State or by the Commission.

Removed(49) In order for net-zero technology manufacturing projects and for net-zero strategic projects, to be deployed or expanded as quickly as possible to contribute to the Union’s security of supply for net-zero technologies, it is important to create planning and investment certainty by keeping the administrative burden on project promoters to a minimum without compromising on the environmental and social standards of the Union. For that reason, permit-granting processes of the Member States for net zero technology manufacturing projects and for net-zero strategic projects, should be streamlined, whilst at the same time ensuring that such projects are safe, secure, environmentally performant, and comply with environmental, social and safety requirements. Union environmental legislation sets common conditions for the process and content of national permit- granting processes, thereby ensuring a high level of environmental protection. ▌.

Removed(50) At the same time, the unpredictability, complexity and at times, excessive length of national permit- granting processes undermines the investment security needed for the effective development of net-zero technology manufacturing projects. Therefore, in order to ensure and speed up their effective implementation, Member States should apply streamlined and predictable permitting procedures. In addition, net-zero strategic projects should be given priority status at national level to ensure rapid administrative treatment and urgent treatment in all judicial and dispute resolution procedures relating to them. Furthermore, Member States should consider policy innovation in this field. In order to ensure that net-zero strategic projects can be treated with priority, Member States should ensure that the competent authorities are adequately equipped and staffed.

Removed(51) Given their role in ensuring the Union’s security of supply for net-zero technologies, and their contribution to the Union’s open strategic autonomy and the green and digital transition, responsible permitting authorities should consider net-zero strategic projects to be in the public interest. Based on its case-by-case assessment, a responsible permitting authority may conclude that the public interest served by the project overrides the public interests related to nature and environmental protection and that consequently the project may be authorised, provided that all relevant conditions set out in Directive 2000/60/EC of the European Parliament and of the Council, Council Directive 92/43/EEC and Directive 2009/147/EC of the European Parliament and of the Council.

Removed(52) In order to reduce complexity and increase efficiency and transparency, project promoters of net-zero technologies manufacturing projects, including of net-zero strategic projects, should be able to interact with a single national authority responsible for coordinating the entire permit granting process and issuing a comprehensive decision within the applicable time limit. To that end, Member States should designate or set up a single competent authority (designated authority). Depending on a Member State’s internal organisation, it should be possible for the tasks of the ▌competent authority to be delegated to a different authority, subject to the same conditions. In order to guarantee the high level of scrutiny along the permitting process, and to ensure the effective implementation of their responsibilities, Member States should provide their ▌ competent authority, or any authority acting on their behalf, with sufficient personnel and resources.

Removed(52a) Member States should be responsible for the selection of Net-Zero Strategic Projects in order to allow strategic considerations, particularly when it comes to the implementation of the NECPs. However, to ensure that the projects also serve the common Union interest, including the Union’s budgetary interests, the Commission should have the authority to object to a decision by a Member State to designate a project as Strategic Project. Where the Commission object to a designation, the project should be brought to the Net-Zero Europe Platform. The Net-Zero Europe Platform should take the final decision on the status of the project.

Removed(53) In order to ensure clarity about the permitting status of net-zero technology manufacturing projects and net-zero strategic projects and to limit the effectiveness of potential abusive litigation, while not undermining effective judicial review, Member States should ensure that any dispute concerning permit granting process is resolved in a timely manner. To that end, national competent authorities should ensure that applicants and project promoters have access to a simple dispute settlement procedure and that those projects are granted urgent treatment in all judicial and dispute resolution procedures relating to them while ensuring respect for the rights of defence.

Removed(54) In order to allow businesses and project promoters, including for cross-border projects, to directly enjoy the benefits of the internal market without incurring an unnecessary additional administrative burden, Regulation (EU) 2018/1724 of the European Parliament and of the Council provides for general rules for the online provision of procedures relevant for the functioning of the internal market. The information that needs to be submitted to national competent authorities as part of the permit-granting processes covered by this Regulation are to be covered in Annex I of Regulation (EU) 2018/1724 following its amendment by this Regulation, and the related procedures are included in its Annex II so as to ensure that project promoters can benefit from fully online procedures and the Once-Only Technical System. ▌Designated authorities acting as one stop shop pursuant to this Regulation are included in the list of assistance and problem-solving services in Annex III of Regulation (EU) 2018/1724.

Removed(55) Net-zero technology manufacturing projects undergo lengthy and complex permitting procedures of 2-7 years, depending on the Member State, technology and value chain segment. Considering the size of required investments – in particular for gigafactory- size projects which are needed to reach the expected economies of scale – inadequate permitting creates an additional and often detrimental barrier to increase net-zero technology manufacturing capacity in the Union. In order to provide project promoters and other investors with the security and clarity needed to increase development of net-zero technologies manufacturing projects, Member States should ensure that the permit-granting process related to such projects does not exceed pre-set time limits. For Net-Zero Strategic Projects, the length of the permit-granting process should not exceed 9 months for facilities with a yearly production output of more than 1 GW, and 6 months for those with a yearly production output of less than 1 GW. For ▌net-zero technology manufacturing projects, the length of the permit-granting process should not exceed 12 months for facilities with a yearly production output of more than 1 GW, and 9 months for those with a yearly production output of less than 1 GW. For net-zero technologies for which the GW metric is not relevant, such as grids and ▌CCS ▌ or ▌CCU ▌ technologies, the upper limits of the aforementioned deadlines should apply. For the expansion of existing production lines, each of the aforementioned time limits should be halved.

Removed(56) In addition, given the importance of net zero technology manufacturing projects and net-zero strategic projects for the Union’s energy supply certain administrative restrictions should be partly lifted or simplified to speed up their implementation.

Removed(57) The environmental assessments and authorisations required under Union law, including in relation to water, air, ecosystems, habitats, biodiversity and birds, are an integral part of the permit granting procedure for a net zero technologies manufacturing project and an essential safeguard to ensure negative environmental impacts are prevented or minimised. However, to ensure that permit granting procedures for net zero technologies manufacturing projects are predictable and timely, any potential to streamline the required assessments and authorisations while not lowering the level of environmental protection should be realised. In that regard, it should be ensured that the necessary assessments are bundled to prevent unnecessary overlap and it should be ensured that project promoters and responsible authorities explicitly agree on the scope of the bundled assessment before the assessment is carried out to prevent unnecessary follow-up.

Removed(58) Land use conflicts can create barriers to the deployment of net zero technologies manufacturing projects. Well-designed plans, including spatial plans and zoning, that take into account the potential for implementing net-zero technologies manufacturing projects and whose potential environmental impacts are assessed, have the potential to help balance public goods and interests, decreasing the potential for conflict and accelerating the sustainable deployment of net-zero technologies manufacturing projects in the Union. Responsible national, regional and local authorities should therefore consider the inclusion of provisions for net-zero technologies manufacturing projects when developing relevant plans.

Removed(59) Space data and services derived from EU Space Programme, and in particular Copernicus, shall be used to the extent possible to provide information on the geology, biology, ecology, socio-economic development, and resource availability for the environmental assessments and authorisations; such data and services and in particular the Copernicus anthropogenic CO2 emission monitoring and verification capacity are most relevant to assess the impact of industry projects and the impact of anthropogenic CO2 sinks on the global greenhouse gas concentrations and fluxes.

Removed(60) The Commission should, as provided in Article 10(1) of Regulation (EU) No 1025/2012 of the European Parliament and of the Council, request one or more European standardisation organisation to draft European standards in support of the objectives of this Regulation.

Removed(61) Hydrogen Valleys with industrial end-use applications play an important role in decarbonising the energy-intensive industries. REPowerEU set the objective of doubling the number of Hydrogen Valleys in the Union. In order to achieve this objective, Member States should accelerate permitting and consider regulatory sandboxes and prioritise access to funding. To strengthen the net zero resilience, Member States should ensure the interconnection of Hydrogen Valleys across the Union’s borders. Industrial installations which produce their own energy, and which can provide a positive contribution to the production of electricity, should be encouraged to contribute to the smart electricity grid as energy producers by simplifying regulatory requirements.

Removed(62) Net-zero regulatory sandboxes can be an important tool to promote innovation in the field of net-zero technologies and regulatory learning. Innovation needs to be enabled through experimentation spaces as scientific outcomes need to be tested in a controlled real-word environment. Regulatory sandboxes should be introduced to test innovative net-zero technologies and other innovative technologies in a controlled environment for a limited amount of time It is appropriate to strike a balance between legal certainty for participants in the Net-Zero regulatory sandboxes and the achievement of the objectives of Union law. As Net-Zero regulatory sandboxes must in any case comply with the essential requirements on Net-Zero technology laid out in Union and national law, it is appropriate to provide that participants, who comply with the eligibility requirements for Net-Zero regulatory sandboxes and who follow, in good faith, the guidance provided by the competent authorities and the terms and conditions of the plan agreed with those authorities, are not subject to any administrative fines or penalties. This is justified as the safeguards in place will, in principle, ensure effective compliance with Union or Member State law on the Net-Zero technology supervised in the regulatory sandboxes. The Commission will publish a Guidance for Sandboxes document in 2023 as announced in the New European Innovation Agenda to support Member States in preparing the net zero technology sandboxes. Those innovative technologies could eventually be essential to achieve the Union’s climate neutrality objective, ensure the security of supply and resilience of the Union’s energy system, and consequently enter the scope of ▌net-zero technologies.