What changed

Rapporteurs for the opinions of associated committees pursuant to Rule 57 of the Rules of Procedure:

P9_TA(2023)0401

Luděk Niedermayer, Committee on Economic and Monetary Affairs

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

Marie-Pierre Vedrenne, Committee on EmploymentIndustry, andResearch Socialand AffairsEnergy

Tiemo Wölken, Committee on Environment, Public Health and Food Safety

PE749.154

Tom Vandenkendelaere, Committee on Internal Market and Consumer Protection

Amendments adopted by the European Parliament on 21 November 2023 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 – C9-0062/2023 – 2023/0081(COD))

Niklas Nienass, Committee on Regional Development

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

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,

– having regard to the opinion of the European Economic and Social committee of 13 July 2023,

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

– having regard to the Rule 59 of its Rule 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,

– having regard to the report of the Committee on Industry, Research and Energy (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.

AMENDMENTS BY THE EUROPEAN PARLIAMENT*

(-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.

(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.Agreement. 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.

(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.

(8) The Union’s decarbonisation objectives, security of energy supply, digitalisation of the energy system and electrification of demand, for example in mobility and the need for fast recharging points, require an enormous expansion of electricity grids in the ▌Union, both at transmission level and at distribution level. At transmission level, high-voltage direct current (HVDC) systems are needed to connect offshore renewable energies; while at distribution level, connecting electricity providers and managing demand-side flexibility builds on investments in innovative grid technologies, such as electric vehicles smart charging (EVSC), energy efficiency building and industry automation and smart controls, advanced meter infrastructure (AMI) and home energy management systems (HEMS). The electricity grid needs to interact with many actors or devices based on a detailed level of observability, and hence availability of data, to enable flexibility, smart charging and smart buildings with smart electricity grids and small-scale flexibility services enabling demand-side response from consumers and the uptake of renewables. Connecting the net-zero technologies to the network of the ▌Union requires the substantial expansion of manufacturing capabilities for electricity grids in areas such as offshore and onshore cables, substations and transformers.

(8a) Clustering industrial activity directed towards industrial symbiosis can 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. In this regard ;regard; this Regulation promotes the development of Net-Zero Industry Valleys (Valleys). Those Valleys should be limited in geographical and technology scope in order to promote industrial symbiosis. Valleys should be designated by Member States and each designation should be accompanied by a Plan with concrete national measures to increase the attractiveness of the Valley as a location for manufacturing activities. Valleys should in particularly be used as a tool for re-industrialisation of regions, especially for coal regions in transition.

(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 environmental impact assessments as required for the net-zero manufacturing activities that are to take place in the Valley. Such impact assessments substantially limits 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. Other measures to be considered are measures to strengthen IP protection, the setting up of an innovation hub in the Valley as well as to attract start-ups to the Valley. In order to provide investment security for industry, the Plan should also specify the duration of the support measures.

(11) In order to ensure that the Union’s future energy system is resilient this scaling-up should be carried out across the whole supply chain of the technologies in question, in full complementarity with the Critical Raw Materials Act.

(11a) Since 2007,2007 and the Commission communications of 22 November 2007 entitled ‘A European Strategic Energy Technology Plan (Set-Plan) - Towards a low carbon future' and 20 October 2023 on the revision of the Strategic Energy Technology (SET) Plan, the Strategic Energy Technology Plan (SET Plan) has been driving the Union's innovation in energy technologies. 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.

(12) In 2020 the ▌Commission adopted an EU strategy for energy system integration. It set out a vision on how to accelerate the transition towards a more integrated energy system, one that supports a climate neutral economy at the least cost across sectors. It encompasses three complementary and mutually reinforcing concepts: first, a more ‘circular’ energy system, with energy efficiency at its core; second, a greater direct electrification of end-use sectors; third, the use of renewable and low-carbon fuels, including hydrogen ▌.Considerations related to energy system integration refer to solutions for fully integrating all the electricity generated by renewable energy installations into the wider energy system. This means, for instance, adopting technical solutions that allow for the integration of surplus electricity generated by renewable electricity installations, including through storage and by expanding plannable fossil free power sources in the grid, in its various forms and demand-side management.

(13) The development of carbon capture and storage solutions for industry is confronted with a coordination failure. First, 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. Second, 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. Third, 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 Union and national policies and measures to ensure coordination and investment across the value chain.

(14) A key bottleneck for carbon capture investments that are today increasingly economically viable is the availability of operating CO2 storage sites in the Union, which underpin the incentives from Directive 2003/87/EC of the European Parliament and the Council. To scale up the technology and expand its leading manufacturing capacities, the Union needs to develop a forward-looking supply of permanent geological CO2 storage sites permitted in accordance with Directive 2009/31/EU2009/31/EC of the European Parliament and of the Council. 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 Union 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 objective, 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 2050, the Union’s 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 injection capacity ▌will be adjusted accordingly. To ensure the achievement of Union’s target, Member States should take the necessary measures to facilitate and incentivize the deployment of carbon capture and storage projects. Such measures should be able to include measures incentivizing emitters to capture emissions, funding support for investors for needed infrastructure to transport CO2 to the storage site and direct funding of CO2 storage projects.

(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.

(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.

(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 RegulationMoreover,Regulation. Moreover, the Union’s net-zero technologies annual manufacturing capacity should cover at least 25% of global demand for the corresponding technologies.

(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.

(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.

(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 thesethose objectives in its Annual Burden Survey.

(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”.

(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.

(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 ,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.

(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.

(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.

(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)30(3) of Directive 2014/23/EU, Article 18 (2)18(2) of Directive 2014/24/EU and Article 36 (2)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▌law as well as in collective agreements or by the international environmental, social and labour law provisions listed in Annex X ofto Directive 2014/23/EU, Annex X to Directive 2014/24/EU and Annex XIV to Directive 2014/25/EU, and offer attractive employment.

(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 products44products and the Proposal for a Regulation of the European Parliament and of the Council concerning batteries and waste batteries45 ,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.

(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),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.

(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 UnionforUnion 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.

(30) Council Decision 2014/115/EU approved in particular the amendment to the World Trade Organisation Agreement on Government Procurement (the ‘GPA’)46.‘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)19(2a) and Article 19(4a), point (a) to economic operators of sources of supply that are signatories to the agreements.

(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▌,2014/24/EU ▌, and Articles 43 and 85 of Directive 2014/25/EU▌,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.

(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.

(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.

(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 Council51 ,Council, contracting authorities or contracting entities should purchase only the products that comply with the obligation laid down in Article 7 (2)7(2) of that Regulation.

(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 strategy52,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.

(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.

(37)▌A(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.

(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.

(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 defensedefence instruments, and by promoting Union standards for net-zero technologies.

(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.

(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.

(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 2023-2030,2023 to 2030, with a range of between about EUR 52 billion to around EUR 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.

(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.

(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.

(43) The amended Recovery and Resilience Facility Regulation54Regulation 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.

(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.

(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.

(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 ,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▌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.

(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.

(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.

(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 andforand 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. ▌.

(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 ▌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.

(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.

(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.

(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 defense.defence.

(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.

(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.

(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 ,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.

(63) An overall benchmark and indicative objectives for the manufacturing of key net-zero technology products in the European Union are put forward in order to improve the Union’s industrial global competitiveness as well as to help tackle import dependency and vulnerability concerns and ensure the Union’s climate and energy targets are met.

(64) One of the main objectives of Union’s industrial policy is to enable the green and digital transitions while preserving the sustainable growth and competitiveness of the Union, maintaining quality jobs and strengthening its ability to innovate and produce, particularly with regard to clean technologies. The scaling up of European net-zero technology industries as well as ensuring Union’s open strategic autonomy require significant additional skilled workers which implies important investment needs in re-skilling and upskilling, including in the field of vocational education and training. More specifically, the energy transition will require a significant increase in the number of skilled workers in a range of sectors, including renewable energy and energy storage, grid technologies, battery production as well as IT or Smart solutions for energy system optimization and management, and other industrial decarbonisation technologies. According to studies, the circular economy could contribute to the creation of around 700 000 jobs in the Union alone by 2030. It is therefore of utmost importance to make jobs in net zero technologies attractive and accessible, especially technical careers including through Union information campaigns to promote technical and vocational education, as well as jobs related to circular economy, resource management and industrial transformation and decarbonisation in general. Furthermore, it is necessary to tackle the current mismatch between the skills of Union workers and the needs of companies. The skill needs for the fuel cell hydrogen sub-sector in manufacturing alone are estimated at 180.000 trained workers, technicians and engineers by the year 2030, according to the Commission’s European Strategic Energy Technology Plan .Plan.. In the photo-voltaic solar energy sector, up to 66.000 jobs would be needed in manufacturing alone. In addition, the absence of educational programmes that promote skills necessary for net zero technologies, which also cause a scarcity of skilled employees and a lack of understanding within local administration in certain regions of the Union, could create a significant bottleneck for sustainable industrial development.

(65) Since strengthening the manufacturing capacity of key net-zero technologies in the Union will not be possible without a sizeable skilled workforce, it is necessary to introduce measures to boost the integration of more people to the labour market, and to make the industries and the technical careers concerned by this Regulation more attractive, especially to women as the gender balance is far from being reached in technology-oriented professions, and to young people including via skills first approaches as a complement to qualifications-based recruitment. In addition, workers from third countries should also be targeted as the Union only attracts a small share of qualified migrants. In addition, in line with the objectives of the Council Recommendation on ensuring a fair transition towards climate-neutrality, specific support for job-to-job transition and with a view of favouring lifelong learning and training for workers in redundant and declining sectors are important. This means investing in skills for all, while, at the same time, having a targeted approach towards vulnerable groups. This includes groups of people who are not in employment, education or training (NEETs), legally residing migrant workers as well as people who are excluded from the labour market, have limited access to training opportunities or are in jobs, which are either at risk of disappearing or whose content and tasks are being highly transformed by new technologies, especially in regions affected by the impacts of the transition towards the Union's 2030 targets pursuant to Article 2 of Regulation (EU) 2021/1056 of the European Parliament and the Council and Article 5(1) of Regulation (EU) 2021/1060. The end objective should be the creation of quality job required for net-zero technologies in the Union in line with the targets for employment and training of the European Pillar of Social Rights, including fair and adequate wages, improving living and working conditions pursuant to Directive (EU)2022/2041 of the European Parliament and of the Council, access to social protection, lifelong learning opportunities, good working conditions in safe and healthy workplaces, as well as collective bargaining rights. In fact, upskilling and reskilling are important tools but do not guarantee quality jobs. Labour shortages might also be the result of low wages, unattractive jobs, poor working conditions, and a lack of investment in vocational education and training (VET). Addressing these issues and improving job quality in sectors and companies with poor working conditions are also important elements to attract workers and address the issue of brain drain which results in growing inequalities between regions, unequal development as well as unequal capacity to drive innovation and create quality jobs. Building on and fully taking into account existing initiatives such as the EU Pact for Skills, EU level activities on skills intelligence and forecasting, such as by the European Centre for the Development of Vocational Training, Eurofound, and the European Labour Authority and the Blueprints for sectoral cooperation on skills, the objective is to mobilise all actors: Member States authorities, including at regional and local levels, education and training providers including universities, research universities, universities of applied science and university alliances, as well as social partners and industry, SMEs, start-ups, and social enterprises to identify skills needs, develop education and training programmes and deploy these at large scale in a fast and operational manner. Net-zero strategic projects have a key role to play in this regard. Member States and the Commission should ensure financial support to deploy their impact and outreach by leveraging the possibilities of the Union budget through instruments such as the European Social Fund Plus, InvestEU, Just Transition Fund, European Regional Development Funds, the Recovery and Resilience Facility, the Modernisation Fund, REPowerEU and the Single Market Programme.

(66) Building on local and regional initiatives and on previous experiences, such as hubs for skills development,thedevelopment, the EU Pact for Skills and the European Battery Alliance, or the Offshore Renewable Energy Alliance, the European Net-Zero Industry Academies, which are a network of relevant experts (Academies), should develop and deploy education and training content to upskill and reskill workers required for key net-zero technology value chains, such as solar photovoltaic and solar thermal technologies, marine renewable energy, renewable hydrogen technologies and raw materials, and CCU. The scope and number of the Academies should be determined by the Commission and the Member States in the framework of the Net-Zero Platform on the basis of existing and objective studies in line with the principle of technological neutrality as well as based on a mapping exercise of current and forecasted needs in net-zero industries, including in regions in transition. Such a mapping exercise should provide information about current and upcoming skills shortages in key net-zero industries across the Union and how training opportunities are provided in such industries. The mapping exercise should also analyse the root cause of skills and labour shortages in particular related to the quality of the job offer in net-zero industries such as by assessing the working conditions and the coverage of collective bargaining. Additionally, based on the results of the mapping exercise and existing studies and in consultation with the Net-Zero Europe Platform, the Commission should issue a call for proposals to launch an academy in a given technology when a critical level of skills shortage in relation to a net zero technology is identified (Academy). Union’s seed-funding should be made available to set up the Academies and allow their functioning in view of becoming financially sustainable three years after their establishment by receiving financial contributions from the private sector. A strong governance is needed to make the Academies operational as fast as possible in order to develop training programmes in net zero technologies. This should be done without prejudice to the determining role that social partners and universities can also play in the creation of such AcademiesAcademies, ,asas in the case in the Battery Alliance. The role of international and interdisciplinary university alliances, such as Transform4Europe, should in particular be considered to achieve more unified and common standards in training and reskilling or upskilling activities. In general, the use of already existing research and teaching infrastructures should also be prioritised.

(66a) One of the aims of the Academies should be to contribute to the Union’s re-industrialisation and decarbonisation as well as to its open strategic autonomy. The Academies should also address the need for net zero technologies with high social and climate standards that are produced in the Union. The Academies should be established by 31 December 2024 and should provide learning content in as many of the languages of the Union institutions as possible, with the aim of achieving geographical balance across Member States. By 31 December 2025, they should start disseminating initial learning content to relevant education and training providers in Member States, such as universities, research universities, universities of applied sciences and university alliances, undertakings that provide such education and training, including SMEs, start-ups and social enterprises, social partners and by training trainers. The Academies should aim to enable the training and education of 100 000 learners each within three years of their establishment, taking the extent of the identified skills shortages into account which may result in a variation of the number of learners per Academy. The Academies should contribute to the availability of skills required for the net-zero technologies, including in SMEs. The learning content should take into account already existing learning programmes developed in the framework of the local Pact for Skills and the centres of professional excellence and should target all levels of education and qualification and all workers, including apprentices, along the value chain in the sectors concerned whereby all successive industrial phases are taken into account, from the design of the product (or the service), to the manufacturing phase, including the recycling and reuse of materials, whereby all the different professions across the value chain are considered. That content should also include learning modules with relevant information about health and safety at work for each specific technology as well as general relevant information on workers’ rights and working conditions, including on working time and workers’ rights to information and consultation. That content could, where relevant, be further adjusted to national law, applicable collective agreements and territorial and sectoral specificities by the education and training providers. The learning content should also target employees in national and local administrations (particularly responsible for permitting, impact assessment and regulations of new technologies), thus contributing to capacity building among national administrations and to a reduction of disparities among Member States.

(68a) The contribution of net-zero technologies to the decarbonisation objectives of the Union can materialise only when those technologies are deployed. Such a deployment, to an extent, is likely to happen in private households, but most decarbonisation is likely to come from decarbonising industrial processes. In order to ensure that investments for such decarbonisation take place in the Union, which is essential to secure good jobs and prosperity in the Union as well as for fulfilling the Union's decarbonisation objectives, it is crucial that it contributes to an improvement of the investment climate for industry in the Union.

(69) At Union level, a Net-Zero Europe Platform, should be established, composed of the Member States and of the European Parliament, and chaired by the Commission. The Net-Zero Europe Platform may advise and assist the Commission and Member States on specific questions and provide a reference body, in which the Commission and Member States coordinate their action and facilitate the exchange of information on issues relating to this Regulation. The Net-Zero Europe Platform should further perform the tasks outlined in the different Articles of this Regulation, notably in relation to permitting, including one-stop shops, Net-Zero Strategic Projects, coordination of and access to financing, access to markets and skills as well as regulatory sandboxes for innovative net-zero technologiesandtechnologies and other innovative technologies .technologies. Where necessary, the Net-Zero Europe Platform should be able to establish standing or temporary subgroups and invite third parties, such as experts or representatives from net-zero industries.

(70) As part of the Green Deal Industrial Plan the Commission announced its intention to conclude Net-Zero Industrial Partnerships covering net-zero technologies. Cooperationtechnologies.Cooperation through such ParnershipsPartnerships is likely to promote the adoption of net-zero technologies globally,to support mutually reinforcing partnerships between the Union and third countries, including sustainable investments and technical assistance. Net-Zero Industrial Partnerships can also contribute to the diversification and resilience of the Union’s supply of net-zero technologies and their components, enhance information sharing between the Union and its partners on the development of net-zero technologies and support Union’s net-zero industries in accessing the global clean energy market,energymarket, while supporting nascent industries in the field of clean energy technologies in third countries with clear comparative advantages. The Commission and Member States should coordinate within the Net-Zero Europe Platform the Partnerships, discussing existing relevant partnerships and processes, such as green partnerships, energy dialogues and other forms of existing bilateral contractual arrangements, as well as potential synergies with relevant Member States’ bilateral agreements with third countries. Agreements with third countries including Net-Zero Industrial Partnerships should reflect core Union values and objectives notably with regard to promoting labour and international environmental standards in those countries. Moreover, Net-Zero Industrial Partnerships should aim to contribute to the industrial transformation across the whole value chain of Union and third country undertakings while ensuring open markets and fair trade.

(71) The Union should aim to diversify international trade and investments in net-zero technologies forging mutual reinforcing partnerships, building on partners' own sustainable development plans, relevant environmental and human rights standards while promoting globally high social, labour and environmental standards. This should be done in close cooperation and partnership with like-minded countries by means of existing agreements or new strategic deals. Similarly, stronger international cooperation on research and innovation efforts to develop and deploy net-zero technologies should be pursued in close cooperation with partner countries in an open and balanced manner, with due regard to the Union’s strategic interests and needs .needs.

(71a) In her 2023 State of the Union address, the Commission President announced that the Competitiveness Check will be conducted by an independent board. This work should be informed by an ongoing body of work regarding the regulatory burden created by Union and national law and its impact on competitiveness of Union’s industry, including net-zero industries. To facilitate that work, this Regulation establishes a European Scientific Advisory Board on Review and Regulatory Burden. The Advisory Board should develop science-informed advice on the impact of the regulatory burden in the Union, on the basis of individual cases.

(72) Where the power to adopt acts in accordance with Article 290 of the Treaty of the Functioning of the European Union (TFEU) is delegated to the Commission under this Regulation, it is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Inter-institutional Agreement on Better Law-Making of 13 April 2016. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(73) To the extent that any of the measures envisaged by the present Regulation constitute State aid, the provisions concerning such measures are without prejudice to the application of Articles 107 and 108 of the TFEU.

(74) Since the objective of this Regulation cannot be sufficiently achieved by the Member States and can rather, by reason of the scale or effects of the action, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

1. This Regulation establishes the framework of measures to ensure a coordinated approach, throughout the Union, to the innovation and scaling up of the manufacturing capacity of net-zero technologies as well as of the components, materials and machinery along the supply chains of those technologies that are indispensable for their production and functioning in the Union to :to:

(a) support the Union’s climate targets and climate neutrality objective, as defined by Regulation (EU) 2021/1119;

2. To achieve the general objective referred to in paragraph 1, this Regulation contains measures with a view to ensuring:

(a) the reduction of strategic dependencies in the Union of the strategic net-zero technologies as well as of the components, materials and machinery along the supply chains of those technologies that are indispensable for their production and functioning and that by 2030 reaches a manufacturing capacity corresponding to :to:

(i) at least 40 % of the Union’s annual deployment needs for the corresponding technologies necessary to achieve the Union’s climate and energy targets, based on the technological deployment planned across the Union according to the national energy and climate plans prepared and submitted by the Member States pursuant to Regulation (EU) 2018/1999; and

(ii) at least 25 % of global demand for the corresponding technologies;(b) the guaranteed free movement of net zero technologies and related service placed on the internal market.technologies;

(b) the guaranteed free movement of net zero technologies and related service placed on the internal market.

3. Where, based on the report referred to in Article 35, the Commission concludes that the Union is likely not to achieve the objectives set out in paragraphs 1 and 2, it shall assess the feasibility and proportionality of proposing measures or exercising its powers at Union level in order to ensure the achievement of those objectives. In particular, the Commission shall assess the possibility of establishing including by means of delegated acts in accordance with Article 33, supplementing this Regulation, more granular targets for key technologies and components in order to ensure the achievement of those objectives. The Commission shall consult the Net-Zero Europe Platform to determine which measures or powers to apply.

1. For the purpose of this Regulation, the following definitions shall apply:

(a) ‘net-zero technologies’ means the technologies listed in Article 3a(1) ;3a(1);

(b) ‘component’ means a manufactured element of a net-zero technology final product ;product;

(ba) ‘materials’ means any raw or processed materials needed for the production of a component of a net-zero technology or of the final product;

(ia) ‘net-zero regulatory sandbox’ means a scheme that enables undertakings to test innovative net-zero technologies and other innovative technologies in a controlled real-world environment, under a specific plan, developed and monitored by a competent authority;

▌ (k) ‘authority concerned’ means an authority that, under national law, is competent to issue permits and authorisations related to the planning, design and construction of immovable assets, including energy infrastructure;

▌

(k) ‘authority concerned’ means an authority that, under national law, is competent to issue permits and authorisations related to the planning, design and construction of immovable assets, including energy infrastructure;

(l) ‘public procurement procedure’ means any of the following:

(f) electrolyser and fuel cell technologies;

(g) electric, hydrogen (H2), sustainable alternative fuels as defined in Regulation (EU) .../...(OJ.../... [OJ to include reference to Sustainable maritime fuels |Regulation 2021/0210(COD)),2021/0210(COD)], and wind propulsion technologies for transportation;

(h) electric charging technologies for transportation;

(c) assistance to project promoters along the permit-granting process, in particular for SMEs.

In addition to the support provided by the Member States, the Commission shall provide the net-zero strategic projects with supportassistance as referred to under points (a),in (b)the andfirst (c).subparagraph.

In order to do so, Member States shall ensure that the relevant administrative bodies are adequately resourced and staffed to respond within the applicable time limits to future requests.

2. For net-zero technology manufacturing projects for which a yearly manufacturing capacity is not measured in GW, the permit-granting process shall not exceed a time limit of 12 months.

3. For the expansion of manufacturing capacity in existing manufacturing facilities, the time limits referred to in paragraphparagraphs 1 and 2 shall be halved.

4. In exceptional cases, where the nature, complexity, location or size of the proposed project so requires, competent authorities may extend the time limits referred to in paragraph 1 and 2 by a maximum of 1 month before their expiry and on a case-by-case basis.

(iii) have applied for a permit for the safe and permanent geological storage of CO2 in accordance with Directive 2009/31/EC.

3. Net-zero technology manufacturing projects corresponding to a technology listed in Article 3a(1) of this Regulation located in ‘less developed and transition regions’ and Just Transition Fund Territories and eligible for funding under cohesion policy rules, shall be recognised by Member States as net-zero strategic projects under Article 11(3) upon request of the project promoter without the project promoter having to submit a formal application under Article 11(2).

4. A net-zero technology manufacturing project located in the Union that contributes to the realisation of the objectives set out in Article 1(1) and that either benefits from the ETS Innovation Fund, or is part of Important Projects of Common European Interest, European Hydrogen Valleys, or of the Hydrogen Bank, when the funds support investment in manufacturing capacities corresponding to a technology listed in Article 3a(1) of this Regulation,3a(1), shall be recognised by Member States as net-zero strategic project under Article 11(3) upon request of the project promoter without the project promoter having to submit a formal application under Article 11(2).

1. Applications for recognition of net-zero technology manufacturing projects as net-zero strategic projects shall be submitted by the project promoter to the relevant Member State.

4a. Where the principle of administrative tacit approval does not exist in the national legal order and, in the case of an environmental impact assessment pursuant to Directive 92/43/EEC, 2000/60/EC, 2008/98/EC, 2009/147/EC, 2010/75/EU, 2011/92/EU or 2012/18/EU or a determination of whether such environmental impact assessment is necessary, the lack of reply of the relevant administrative bodies within the applicable time limits referred to in this Article shall result in effective, proportionate and dissuasive penalties. The revenue of the penalty shall be allocated to the project affected by the delay and shall correspond to the missed economic value as a result of the delay.

Net-aeroNet-zero industry valleys

1. In order to fulfil the objectives of this Regulation, each Member State may designate geographical areas as net-zero industry valleys (Valleys).

Any environmental assessment requirements and mitigating measures for a permit for new or expanded manufacturing capacity that is in accordance with the Plan's requirements and applicable law shall be considered fulfilled by an environmental assessment carried out pursuant to this paragraph and benefit from fast track procedure and validation.

2a.3. Member States shall provide an opinion, as set out in Article 7(1) of this Regulation as well as a detailed schedule for the permitting procedure as set out in Article 6(7), for all activities foreseen in the Valley. The opinion shall also include a detailed description of any data, information or analysis gathered by the Member State when conducting the assessment referred to in paragraph 2 can be relied upon by the applicant as well as, where applicable, which additional information, data or analysis is still required from the applicant. In accordance with Article 5, all data, information and analysis gathered by the Member State shall be made accessible online for applicants.

4. A decision designating a Valley pursuant to Article 13a(1) and in accordance with this Article shall include a date of application and a date of expiry. A Member State may renew such a decision. Member States shall make these decisions public.

5. Net-zero manufacturing projects in Valleys shall be considered to contribute to the security of supply of net-zero technologies in the Union and therefore to be in the public interest. With regard to the environmental impacts addressed in Articles 6(4) and 16(1) of Directive 92/43/EEC, Article 4(7) of Directive 2000/60/EC and Article 9(1), point (a), of Directive 2009/147/EC, net-zero manufacturing projects in Valleys shall be considered as being of public interest and may be considered as having an overriding public interest provided that all the conditions set out in those Directives are fulfilled.

5.6. The national measures referred to in paragraph 1b of1, thispoint Article(b) shall at least include the following economic and administrative support schemes:

(a) ensure the fast administrative set-up of Valley;

7. Public investments aimed at setting up Valleys, at equipping Valleys with appropriate infrastructure, converting brownfield sites and developing the adequacy of the local skills pool may benefit from increased co-financing rates by up to 10% under the European Fund for Regional Development, the Just Transition Fund and the European Social Fund Plus, if the Valley is located in less developed and transition regions or in Just Transition.

▌Article 15 Coordination of financing

▌

1. The Net-Zero Europe Platform as established in Article 28 shall assess financial needs and bottlenecks of net-zero strategic projects, collect potential best practices, in particular to develop EU cross-border supply chains, notably based on regular exchanges and recommendations of the Net-Zero Industry Expert Group and with the relevant industrial alliances.

(c) existing Member State instruments and programmes, including from national promotional banks and institutions;

(d) relevant Union funding and financing programmes.programmes including through STEP.

2a. By ... [3 months from the date of entry into force of this Regulation] and every two years thereafter, the Net-Zero Europe Platform shall issue recommendations to the Commission to guarantee sufficient funding, including through the Union budget, to pursue the objectives of this Regulation.

Financing of net-zero technologies

1. Without prejudice to Directive 2003/87/EC ,2003/87/EC, Member States shall report annually on the percentage of national revenues generated from the auctioning of the allowances, in accordance with the activities allowed under Article 10(3) of that Directive, that is used to support the objectives of this Regulation with a view of reaching at least 25%.

2. In accordance with Article 2 of [STEP Regulation] Net-Zero Strategic Projects selected pursuant to Article 10(1), points (a) or (b), of this Regulation are recognised as fulfilling the STEP objectives and shall therefore be eligible to receive the Sovereignty Seal under Article 4 of that Regulation as well as to receive funds in accordance with Article 9 of that Regulation.

8. The Union may integrate its neighbouring countries into its efforts under this Chapter by integrating the provisions of this Chapter in agreements with these countries or by establishing new agreements covering the provisions of this Chapter. When integrating these provisions in existing agreements or when establishing new agreements, the agreement shall ensure that all Union environmental, safety and security standards and requirements applicable for projects under this Chapter are respected in the third country. The agreement shall also set out an additional proportionate injection target for the third country as well as, in accordance with Article 18, a pro rata contribution for the relevant entities in the third country.

1. By 3... [3 months from the entry into force of this Regulation,Regulation], Member States shall:

(a) make publicly available data on areas where CO2 storage sites can be permitted on their territory.

(b) oblige entities holding an authorisation as defined in Article 1, point 3, of Directive 94/22/EC of the European Parliament and of the Council on their territory to make publicly available on a non-reliance basis all raw geological data relating to production sites that have been decommissioned or whose decommissioning has been notified to the competent authority, and preliminary economic assessments of the respective costs of enabling CO2 injection on each site, including data on:(i) whether the site is suitable for sustainably, safely and permanently injecting and storing CO2;on:

(ii)(i) whether transport infrastructurethe andsite modesis suitable for safely transporting CO2 to reach thesustainably, sitesafely isand availablepermanently orinjecting canand bestoring constructed..CO2;

(ii) whether transport infrastructure and modes suitable for safely transporting CO2 to reach the site is available or can be constructed.

(c) For the purposes of point (a), the data shall include at least the information requested in the Commission Notice on the Guidance to Member States for the update of the 2021-2030 National Energy and Climate Plans and its subsequent updates.

2. Within three months of the entry into force of this Regulation, Member States shall, identify and report to the ▌Commission the entities referred to in paragraph 1 and their volumes in crude oil and natural gas sale from 1 January 2020 to 31 December 2023.

3. Following the receipt of the reports submitted pursuant to Article 17 (2),17(2), the Commission after having consulted Member States and interested parties, shall specify the share of the contribution to the Union CO2 injection capacity objective by 2030 from entities referred to in paragraph 1.1 of this Article.

4. Within twelve months of the entry into force of the Regulation, the entities referred to in paragraph 1 shall submit to the Commission a plan detailing how they intend to meet their contribution to Union CO2 injection capacity objective by 2030. Those plans shall:

(c) enter into agreements with third party storage, capture and transport, project developers or investors to fulfil their contribution.

6. By ... [two years from the entry into force of the Regulation] and every year thereafter, the entities referred to in paragraph 1 shall submit a report to the competent authorities of the Members States and the Commission detailing their progress towards meeting their contribution. In accordance with Directive 2009/31/EC, that report shall include details on the newly commissioned storage capacities, the extent of its utilisation, and an overview of the economic feasibility of planned injection capacities and recommendations to the Member States on additional measured required to reach the CO2 injection targets.Thetargets. The Commission shall make these reports public.

6a. The Commission shall assess the compliance of the entities referred to in paragraph 1 with the requirements of this Chapter. In this assessment the Commission shall take into account the development of CO2 transport modalities to the injection sites as well as the development of CO2 capture activities to produce the demand for CO2 injection. If either or both infrastructure and capture activities, needed for a specific injection project to become operational, are lacking resulting in a specific entity not meeting its obligations this Article the Commission may reduce the injection obligation of a specific entity for a specific year. Any reduction shall be recovered within five years after the reduction took place.

To facilitate the assessment pursuant to this paragraph, the Commission shall develop a list of sectors with unavoidable industrial process emissions from large-scale industrial installations for which no direct emissions reduction options are available after the best available techniques have been applied, based on a clear methodology including scientific evidence, the current state-of-the-art of relevant technologies, economic feasibility, as well as appropriate demand-side emissions reduction measures.

1. Without prejudice to the World Trade Organization Agreement on Government Procurement (GPA) and other international agreements by which the Union is bound as well as applicable sectoral legislation, in particular Regulations (EU) 2022/1031 and (EU) 2022/2560, contracting authorities andcontractingand contracting entities shall base the award of contracts for purchase or use for net-zero technology listed in Article 3 of this Regulation, as well as, particularly through public procurement of innovative solutions and pre-commercial public procurement, innovative net-zero technologies or other innovative technologies, in a public procurement procedure on the most economically advantageous tender, which shall include the best price-quality ratio, comprising at least the environmental and social sustainability and resilience contribution of the tender, in compliance with Directives 2014/23/EU, 2014/24/EU, or 2014/25/EU ▌. Contracting authorities and contracting entities shall ensure that the procurement process is open, non-discriminatory and transparency, allowing fair competition among all eligible suppliers.

Where a net-zero technology is not the main object of the contract but only part of it and the estimated value of the relevant part of the contract is above the thresholds set out in Directive 2014/23/EU, 2014/24/EU or 2014/25/EU, contracting authorities or contracting entities shall do one of the following:

For the implementation of the criteria referred to in paragraph 2a of this Article, the contracting authorities or contracting entities refer to the latest data entered in the list referred to in Article 22(2) of this Regulation, and the origin of supply shall be determined in accordance with Regulation (EU) No 952/2013..

4. By way of derogation from paragraph 3 of this Article, the contracting authority or the contracting entity shall not be obliged to apply the considerations relating to the sustainability and resilience contribution of net-zero technologies where their application would clearly oblige that authority or entity to acquire equipment having disproportionate costs ▌..▌. Cost differences shall be calculated only for the cost of the equipment, excluding related services, and may be presumed by contracting authorities and contracting entities to be disproportionate when they are above 30% ,30%, compared to a tender without the sustainability and resilience contribution .Thiscontribution.This provision shall be without prejudice of the possibility to exclude abnormally low tenders under Article 69 of Directive 2014/24/EU and Article 84 of Directive 2014/25/EU, ▌without prejudice to other contract award and exclusion criteria according to the EU legislation, and without prejudice to prerogative of contracting authorities to formulate technical specifications in line with Article 42 of Directive 2014/24/EU in order to ensure the application of paragraph 3 of this Article does not lead to the procurement of incompatible equipment requiring unreasonably high costs to ensure the compatibility with the existing equipment.

The Net-Zero Europe Platform may issue recommendations to the contracting authorities and entities across the Union regarding appropriate higher thresholds for defining disproportionate costs in light of the market circumstances for specific net-zero technologies.

2. The sustainability and resilience contribution shall be given a weight between 35% and 50% of the award criteria, taking into account both the sustainability and the resilience contribution in a balanced way, without prejudice to the possibility to give a higher weighting to the criteria in Article 19(2), points (a) and (b), where applicable under Union legislation, and of any limit for non-price criteria set under State aid rules. When selecting, designing and implementing the concrete non-price criteria as part of the sustainability and resilience contribution, technology-specific characteristics shall be taken into account and effectively addressed.

3. The 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 shall not be obliged to apply the considerations relating to the sustainability and resilience contribution of net-zero technologies where their application would oblige those entities to acquire equipment having disproportionate costs ▌.,.▌. Cost differences above 10% may be presumed by contracting authorities and contracting entities to be disproportionate when the costs of the support offered by the public sector for the project would be more than 15% higher, compared to a procedure without the sustainability and resilience contributions. This paragraph shall be without prejudice to the prerogative of contracting authorities to formulate technical specifications in accordance with Article 42 of Directive 2014/24 in order to ensure the application of this paragraph does not lead to the procurement of incompatible equipment requiring unreasonably high costs to ensure the compatibility with the existing equipment.

Member States may adjust their overall budgets allocated to renewable energy auctions as well as the related maximum bid levels in order to accommodate the implementation of non-price criteria.

Member States shall ensure that auctions include an inflation indexation mechanism. Negative bids shall, where appropriate, be excluded from auctions.

3a. Authorities shall apply the following prequalification conditions for auctions under this Article:

Where the application of those prequalification conditions in an auction results in no suitable bids, the contracting authority may restart the auction without the application of the prequalification conditions of points (a) and (c).

1. By ...[6 months from the date of entry into force of this Regulation], the Commission shall provide clear guidance on the concrete implementation on Article 19 in combination with Article 20, by providing:

Commission guidance

1. By ... [6 months from the date of entry into force of this Regulation], the Commission shall provide clear guidance on the concrete implementation on Article 19 in combination with Article 20, by providing:

(a) a catalogue of concrete and technology-specific potential non-price criteria for renewable energy auctions, which shall differentiate between non-price criteria suitable for competitive bidding processes and non-price criteria suitable as prequalification requirements in renewable energy auctions;

(c) a methodology on how to assess the cost differences referred to in Article 20(3).

2. The Commission shall evaluate the contribution of non-price criteria of this Regulation aiming to provide an incentive for the innovation required for achieving the Union’s 2030 and 2050 energy and climate targets and report to the European Parliament no laterby than... two[two years after the date of entry into force.force of this Regulation]. If necessary, the Commission shall modify the contribution of non-price criteria in order to foster manufacturing in the Union, ensuring high environmental and sustainability standards, developing value chains across the Union and increasing the competitiveness of Union businesses at global level.

Pre-commercial procurement and public procurement of innovative commercial solutions

2. NECPs, NECP-updates and NECP progress reports shall detail the timing of the PCPs and PPIs and their objectives. The Net-Zero Europe Platform shall prepare recommendations on the design of pre-commercial procurement or public procurement.

1. Without prejudice to Articles 107 and 108 TFEU and Article 4 of Directive (EU) 2018/2001 and in line with the Union’s international commitments, when deciding to set up schemes benefitting households, business or consumers which incentivise the purchase of net-zero technology final products listed in Article 3a(1) 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, shall design them in such a way as to promote the purchase by beneficiaries of net-zero technology final products with a high sustainability and resilience contribution as referred in Article 19(2),19(2) of this Regulation, by providing additional proportionate financial compensation.

2. The additional financial compensation granted by authorities in accordance with paragraph 1, due to the application of the criteria referred to in Article 19(2), points (b), (c) and (d) and Article 19(2a) shall not exceed 5 % of the cost of the net-zero technology final product for the consumer, except for schemes targeting citizens living in energy poverty for which the limit shall be 15%.

4. Member States shall publish on a single free access website all information relating to schemes pursuant to Article 21(1) for each relevant net-zero technology product.

1. By ... [12 months from the date of entry into force of this Regulation], the Commission shall adopt an implementing act in accordance with the examination procedure referred to in Article 34(3) specifying the criteria to assess the resilience and sustainability contribution of available products covered by the forms of public intervention covered under Articles 19, 20 and 21 ,21, in accordance with similar provisions in existing legal acts, and establishing the criteria for a derogation as provided for in Article 19(4). The Commission shall take the specific context of SMEs into consideration.

1a. In the case of a conflict between the different award and sustainability criteria set under other Union legal acts, the Commission shall provide guidance on how those provisions coexist. The Commission shall review and, where necessary, update its guidance every six months.

1. Based on a mapping excercise and referred to in Article 23a, the Commission shall support, including through the provision of seed-funding, the establishment of European Net Zero Industry Academies as a network of experts in net-zero technologies, which have as their objectives to:

(a) develop learning programmes, content and learning and training materials for training and education on developing, producing, installing, commissioning, operating, maintaining and recycling net-zero technologies,technologies and, on raw materials,materials that have been identified by the mapping exercise, as well as to support the capacities of public authorities competent to issue permits and authorisations referred to in Chapter II and contracting authorities referred to in Chapter IV of this Regulation;

(aa) ensure that the learning programmes developed facilitate the acquisition and strengthening of transversal competences, beyond skills that are specific to a particular technology or a particular sector, to facilitate the adaptation from one industry to another, allowing learners to be mobile and adaptable to the ever-changing situation on the labour market and beyond;

(ac) aim to enable the training and education of 100 000 learners per Academy, within three years of their establishment by encouraging professional lifelong learning and upskilling or reskilling, including through apprenticeships, mentoring programmes as well as short and long duration training programmes;

(b) enable and promote the use of the learning programmes, content and materials by education and training providers in the Member States, such as universities, research universities, universities of applied sciences and university alliances, undertakings that provide such ,education and training, including SMEs, start-ups and social enterprises, social partners, and by training trainers;;

(ba) develop mechanisms to ensure the quality of the training offered by education and training providers in the Member States and, where applicable, in countries associated with Union research and innovation programmes, such as Horizon Europe and Digital Europe, based on learning programmes, content and materials of the European Net-Zero Industry Academies;

(c) develop and deploy credentials, including micro-credentials, to facilitate the recognition of skills acquired, to enhance the transferability between jobs and industries, to facilitate the cross-border mobility of the workforce, and to promote matching with relevant quality jobs through tools such as the European Employment Services (EURES) network and EURAXESS.

2. European Net-Zero Industry Academies shall counter gender stereotypes and shall promote equal access to learning contents for all, paying particular attention to the need to activate more women and young people, in particular those who are not in education, employment or training(NEETs), older people, workers in professions which are at risk of disappearing or the content and tasks of which are being highly transformed by new technologies and people working in regions in transition. The European Net-Zero Industry Academies shall promote diversity and inclusivity of people with disability, migrants and people in vulnerable situations. .

Article23a

(1) assist the Commission in assessing, continuously monitoring and forecasting the demand and supply of a workforce with the skill sets needed in net-zero technologies and the availability and uptake of corresponding education and training opportunities, informing as appropriate the activities of the European Net-Zero Industry Academies;

(2) monitor the activity of the European Net-Zero Industry Academies and ,and, based on the data provided by Member States and national authorities pursuant to Article 31(2), collect information on how many people have benefited from the learning programmes developed by the Academies and provide disaggregated data by industrial sectors, gender, age, and levels of education and qualification, foster synergies with other national and Union skills initiatives and projects, and provide oversight so as to attract a diverse workforce, including through targeted communication campaigns;

(3) assist the mobilisation of stakeholders including industry, undertakings, including SMEs, start-ups and social enterprises, social partners and education and training providers, such as universities, research universities, universities of applied sciences and university alliances for the roll-out of learning programmes developed by the European Net-Zero Industry Academies;

(6a) encourage and support labour mobility across the Union and publish vacant posts by means of the EURES network;

(7) facilitate closer coordination and the exchange of best practices and knowhow between Member States and within the private sector to enhance the availability of skills in the net-zero technologies, including by contributing to Union and Member States policies to attract new talents from third countries and from all educational levels.

-1. By ... [3 months from the date of entry into force of this Regulation], Member States shall designate or establish a single national competent authority which is to be responsible for the net-zero regulatory sandboxes. That authority shall be the sole contact point for any grouping of organisations willing to request the establishment of a net-zero regulatory sandbox pursuant to this Article.

1. Member States and where appropriate together with local and regional authorities and other Member States, may at their own initiative establish net-zero regulatory sandboxes, allowing for the development, testing and validation of innovative net-zero technologies and other innovative technologies, in a controlled real-world environment for a limited time before their placement on the market or putting into service, thus enhancing regulatory learning and potential scaling up and wider deployment. Member States shall establish net-zero regulatory sandboxes in close collaboration with industry and research institutes, and where relevant social partners and civil society, in accordance with paragraph 1 at the request of any company developing innovative net-zero technologies and other innovative technologies, which fulfils the eligibility and selection criteria referred to in paragraph 4(a) and which has been selected by the competent authorities following the selection procedure referred to in paragraph 4(b).

2. The modalities and the conditions for the establishment and operation of the net-zero regulatory sandboxes under this Regulation shall be adopted through implementing acts in accordance with the examination procedure referred to in Article34(3).Article 34(3). The modalities and conditions shall to the extent possible support flexibility for national competent authorities to establish and operate their Net-zero regulatory sandboxes, foster innovation and regulatory learning and shall particularly take into account the special circumstances and capacities of participating SMEs- and start-ups. The implementing acts referred to this paragraph ▌ shall include common main principles on the following issues:

(a) eligibility and selection for participation in the net-zero regulatory sandboxes;

(c) where appropriate, establish a dedicated channel for communication with SMEs to provide guidance and respond to queries about the implementation of Article 26.

2. Member States shall take into account the specific interests and needs of SMEs ,SMEs, and provide adequate administrative support to take part in the regulatory sandboxes. Without prejudice to the application of Articles 107 and 108 TFEU, Member States should inform SMEs of available financial support to their activities in the regulatory sandboxes.

2a. This Article shall apply to start-ups.

2. Member States and the national authorities they designate for this purpose shall collect and provide data and other evidence required pursuant to paragraph 1, points (a) and (b). In particular, they shall collect and report each year to the Commission data on:

(a) net-zero technology developments and market trends, including average manufacturing investment costs and production costs, and market prices for the respective net-zero technologies; (b) net-zero technology manufacturing capacity and related activities, including data on employment and skills and progress towards achieving the 2030 targets referred to in recital 13;

(b) net-zero technology manufacturing capacity and related activities, including data on employment and skills and progress towards achieving the 2030 targets referred to in recital 13;

(c) value and volume of imports into the Union and exports outside of the Union of net-zero technologies;

7a. On the basis of the reports referred to in Article 16(2) and Article 18(4) and submitted by entities referred to in Article 18(1) by 31 January 2025 the Commission shall assess and submit a report to the European Parliament and to the Council on the effectiveness of this Regulation, accompanied by a review if deemed necessary.

▌Article 33 Exercise of the delegation

▌

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

6. A delegated act adopted pursuant to Article 1(3), Article 3(2) andor Article 18(7) shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,▌,

For the European Parliament For the Council

The President The President

EXPLANATORY STATEMENT

The Net-Zero Industry Act holds significant importance within a broader context that encompasses the urgent need to establish a compelling business case for industrial decarbonisation in Europe, aligning with the overarching goals of the Green Deal. Moreover, European industry faces a pressing challenge in terms of maintaining competitiveness on a global scale. While the Commission's initial proposal for the Net-Zero Industry Act aimed to address these concerns, it fell short of achieving comprehensive outcomes. In this regard, the present draft report represents a substantial improvement by introducing key enhancements.

Two primary improvements are worth highlighting: the streamlined definition of net-zero technologies and the expanded scope that encompasses the entire supply chain of such technologies. The draft report proposes referencing the Taxonomy to rationalise the definition, thereby avoiding the creation of an additional list and ensuring policy coherence throughout the Union.

A third crucial enhancement within the draft report lies in the inclusion of articles within the innovation chapter, strategically designed to enhance the overall competitiveness of European industry. Consequently, the chapter has been renamed "Innovation and Competitiveness" and divided into two sections: the first section focusing on innovation (Articles -26 to 26) and the second section devoted to competitiveness (Articles 26a to 27).

Shifting the Act's overarching objective from a benchmark based solely on domestic deployment needs to a benchmark emphasizing global market share assumes paramount importance for Europe's continued prosperity through export capacity.

Carbon Capture and Storage (CCS) emerges as a central issue within this Act. While appreciating the strong emphasis on ensuring the availability of storage capacity, it is vital to establish a functional market that encompasses the entire value chain, including capture, transport, storage, and usage. In light of this, the draft report proposes amendments to facilitate the functionality of this value chain.

Furthermore, the draft report introduces the concept of Net-Zero Industry Valleys, aimed at fostering industrial symbiosis and encouraging Member States to make targeted investments in specific areas across Europe.

A significant challenge that cannot be ignored is the lack of funding support for the Commission's initial proposal. To address this concern, the draft report recommends that Member States allocate 25% of their national Emissions Trading System (ETS) revenues for expenditures aimed at achieving the objectives set forth in this Act. By ensuring a dedicated financial stream, the Act can gain the necessary momentum for successful implementation.

In conclusion, the draft report represents a substantial step forward in refining the Net-Zero Industry Act. Through rationalised definitions, an extended scope, provisions for innovation and competitiveness, the pursuit of global market share, a functional approach to CCS, the concept of Net-Zero Industry Valleys, and dedicated funding mechanisms, the Act can more effectively propel Europe's industrial decarbonisation efforts while ensuring sustained competitiveness.

9.10.2023