Our position on the Net Zero Industry Act

The Confederation of Industry of the Czech Republic welcomes the EC’s long-awaited regulation proposal which we regard crucial from the industry perspective as well as a step in the right direction.

Nevertheless, the proposed scope of the net zero technologies within the Net Zero Industry Act seems insufficient. The draft legislation only covers the sectors of energy and hydrogen. We understand that some of the input raw materials are being dealt with within the framework of the proposed Critical Raw Materials Act, however, it stays unclear whether NZIA includes the whole supply chain, whether the manufacturing technologies and processes – for instance for RES or low-carbon sources components - are or are not part of the NZIA (e.g. steel production for wind turbine pylons, components for water or nuclear power plants etc.). It is not possible to deal with renewable energy, energy or with hydrogen separately. We can see an example of good practice in the U.S. Inflation Reduction Act, which includes whole value chains and remains (for example in respect to hydrogen) technologically neutral. For Confederation of Industry it is absolutely crucial that the scope of NZIA is clarified and broadened. In our view, the NZIA should reflect the whole production chain: manufacturing components, their parts as well as raw materials.

As insufficient we also regard the proposed financing provisions. The draft legislation limits itself only to targets regarding hydrogen storage, exchange of information and know-how, and regarding simplified authorization for certain types of technologies. The draft, however, does not deal with the other side of the issue – how to make sure there are sufficient financial sources available. Instead, the proposal should be open to various forms of financing and it should stay away from trying to list all possible funds in order to ensure its flexibility in future and its capacity to take into account up-to-date needs. Provided there is no additional financing available, it is necessary to ensure the flexibility of current sources in order not to stop member states from obtaining support from (e.g.) European sources given the rules thematic concentration, indicators etc.

Generally speaking, in our view the proposal should primarily focus on research, manufacturing as well as deployment of new technologies – and the authorization processes, financing etc. should then be adjusted accordingly.

Our full position on Net Zero Industry Act (in Czech) can be viewed here.