Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (Text with EEA relevance)

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter

To achieve the general objective referred to in paragraph 1, this Regulation lays down measures aiming to:

(a) lower the risk of supply disruptions related to net-zero technologies likely to distort competition and fragment the internal market, in particular by identifying and supporting the scale-up of the manufacturing capacity of net-zero technologies and their supply chains;

(b) establish a Union market for CO2 storage services;

(c) encourage demand for sustainable and resilient net-zero technologies through public procurement procedures, auctioning and other forms of public intervention;

(d) enhance skills through the support of the Academies, thereby safeguarding and creating quality jobs;

(e) support innovation through the creation of net-zero regulatory sandboxes, coordination of research and innovation activities through the Strategic Energy Technologies Plan Steering Group, as well as through the use of pre-commercial procurement and public procurement of innovative solutions;

(f) improve the Union’s ability to monitor and mitigate supply risks related to net-zero technologies.

Article 2

Scope

Article 3

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘net-zero technologies’ means the technologies listed in Article 4 where they are final products, specific components or specific machinery primarily used for the production of those products;

(2) ‘component’ means a part of a net-zero technology final product that is manufactured and traded by a company, including processed material;

(3) ‘renewable energy technologies’ means technologies that produce energy from renewable sources;

(4) ‘energy from renewable sources’ means energy from renewable sources or renewable energy as defined in Article 2, second paragraph, point (1), of Directive (EU) 2018/2001;

(5) ‘energy storage’ means electricity and thermal storage as well as other forms of storage that are used to store fossil-free energy;

(6) ‘renewable fuels of non-biological origin’ means renewable fuels of non-biological origin as defined in Article 2, second paragraph, point (36), of Directive (EU) 2018/2001;

(7) ‘sustainable alternative fuels’ means sustainable aviation fuels, synthetic low- carbon aviation fuels or hydrogen for aviation as defined in Article 3, point (7), (13) or (17) of Regulation (EU) 2023/2405 destined for the aviation sector or fuels destined for the maritime sector as identified in accordance with criteria defined in Article 10(1) and (2) of Regulation (EU) 2023/1805;

(8) ‘transformative industrial technologies for decarbonisation’ means the scaling up of manufacturing capacity for transformative industrial technologies that are used to significantly and permanently reduce emission rates of CO2-eq of a commercial facility of an energy-intensive business, as defined in Article 17(1), point (a), of Council Directive 2003/96/EC (¹), in the steel, aluminium, non-ferrous metals, chemicals, cement, lime, glass, ceramics, fertilisers, as well as pulp and paper sectors to an extent which is technically feasible;

(9) ‘biotech climate and energy solutions’ means technologies anchored in the use of microorganisms or biological molecules such as enzymes, resins or biopolymers, which are able to reduce CO2 emissions by replacing energy-intensive fossil or chemical-based inputs in industrial manufacturing processes relevant for, inter alia, carbon capture, production of biofuels and production of bio-based materials, in line with the circular economy principles;

(10) ‘primarily used’ means final products and specific components which are essential for the production of net-zero technologies, as set out in the Annex, or final products, specific components and specific machinery which are essential for the production of net-zero technologies on the basis of evidence provided to a national competent authority by the project promoter, with the exception of energy-intensive industry decarbonisation projects, for which such evidence is not required;

(11) ‘processed material’ means a material that has been processed in such a way to be suitable for a specific function in a net-zero technology supply chain, with the exception of critical raw materials defined pursuant to Article 4 of Regulation (EU) 2024/1252;

(12) ‘innovative net-zero technologies’ means net-zero technologies that comprise genuine innovations which are not currently available on the market and that are advanced enough to be tested in a controlled environment;

(13) ‘other innovative technologies’ means energy-related or climate-related technologies with a proven potential to contribute to the decarbonisation of industrial or energy systems and to reduce strategic dependencies that comprise genuine innovations that are not currently available on the Union market and that are advanced enough to be tested in a controlled environment;

(14) ‘pre-commercial procurement’ means the procurement of net-zero technologies in a pre-commercial phase, involving risk-benefit sharing under market conditions and competitive development in phases;

(15) ‘public procurement of innovative solutions’ means a public procurement procedure for which contracting authorities or contracting entities act as a launch customer for net-zero technologies, which may include conformity testing;

(16) ‘net-zero technology manufacturing project’ means a planned commercial facility or an extension or repurposing of an existing facility to manufacture net-zero technologies, or an energy-intensive industry decarbonisation project;

(17) ‘energy-intensive industry decarbonisation projects’ means the construction or conversion of the commercial facility of an energy-intensive business as defined in Article 17(1), point (a), of the Directive 2003/96/EC in the steel, aluminium, non-ferrous metals, chemicals, cement, lime, glass, ceramics, fertilisers, as well as pulp and paper sectors that are part of the supply chain of a net-zero technology and that are to reduce emission rates of CO2-eq of industrial processes significantly and permanently to an extent which is technically feasible;

(18) ‘net-zero strategic project’ means a net-zero technology manufacturing project, a CO2 capture project, a CO2 storage project or a CO2 transport infrastructure project located in the Union that a Member State has recognised as a net-zero strategic project pursuant to Articles 13 and 14;

(19) ‘permit-granting process’ means a process that covers all relevant permits to build, expand, convert and operate net-zero technology manufacturing projects and net-zero strategic projects, including building, chemical and grid connection permits, and environmental assessments and authorisations where required, and encompassing all applications and procedures from the acknowledgement that the application is complete to the notification of the comprehensive decision on the outcome of the procedure by the single point of contact concerned, as well as with regard to CO2 geological storage, the storage permit-granting process which concerns the processing of all necessary permits for surface installations requested to operate a storage site, including building permits and pipe authorisations, and the environmental authorisation for the injection and storage of CO2 completed in accordance with Directive 2009/31/EC;

(20) ‘comprehensive decision’ means the decision or set of decisions taken by Member State authorities that determine whether a project promoter is authorised to implement a net-zero technology manufacturing project, without prejudice to any decision taken in the context of an appeal procedure;

(21) ‘project promoter’ means any undertaking or consortium of undertakings developing a net-zero technology manufacturing project or a net-zero strategic project;

(22) ‘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;

(23) ‘public procurement procedure’ means either of the following: (a) any type of award procedure covered by Directive 2014/24/EU for the conclusion of a public contract or Directive 2014/25/EU for the conclusion of a supply, works and service contract; (b) a procedure for the award of works or a service concession covered by Directive 2014/23/EU;

(24) ‘contracting authority’ means, in the context of public procurement procedures, a contracting authority as defined in Article 6 of Directive 2014/23/EU, Article 2(1), point (1), of Directive 2014/24/EU and Article 3 of Directive 2014/25/EU;

(25) ‘contracting entity’ means, in the context of public procurement procedures, a contracting entity as defined in Article 7 of Directive 2014/23/EU and Article 4 of Directive 2014/25/EU;

(26) ‘contract’ means, in the context of public procurement procedures, public contracts as defined in Article 2(1), point (5), of Directive 2014/24/EU, supply, works and service contracts as defined in Article 2, point (1), of Directive 2014/25/EU, and concessions as defined in Article 5, point (1), of Directive 2014/23/EU;

(27) ‘auction’ means a mechanism for competitive tendering procedures to support the production or consumption of energy from renewable sources that does not fall under Directive 2009/81/EC of the European Parliament and of the Council (²) or Directive 2014/23/EU, 2014/24/EU or 2014/25/EU;

(28) ‘CO2 injection capacity’ means the annual amount of CO2 that can be injected in an operational geological storage site, permitted under Directive 2009/31/EC, with the purpose of reducing emissions or increasing carbon removals, in particular from large scale industrial installations, and which is measured in tonnes per annum;

(29) ‘CO2 transport infrastructure’ means the network of pipelines, including associated booster stations, for the transport of CO2 to the storage site, as well as any ships, road or rail transport modes, including liquefaction devices and temporary storage facilities if needed, for the transport of CO2 to the harbour facilities and storage site;

(30) ‘energy system integration’ means solutions for the planning and operation of the energy system as a whole, across multiple energy carriers, infrastructures, and consumption sectors, by creating stronger links between them with the objective of delivering fossil-free, flexible, reliable and resource-efficient energy services, at the least possible cost for society, the economy and the environment;

(31) ‘net-zero Industrial Partnerships’ means a commitment between the Union and a third country to increase cooperation related to net-zero technologies that is established through a non-binding instrument setting out concrete actions of mutual interest;

(32) ‘first-of-a-kind’ means a new or substantially upgraded net-zero technology facility which provides innovation with regard to the manufacturing process of the net-zero technology that is not yet substantively present or committed to be built within the Union;

(33) ‘manufacturing capacity’ means the total amount of output capacity of the net-zero technologies produced in a manufacturing project or, where a manufacturing project produces specific components or specific machinery primarily used for the production of such products rather than the final products themselves, the output capacity of the final products for which such components or specific machinery are produced.

Article 4

List of net-zero technologies

The net-zero technologies within the scope of this Regulation shall be:

(a) solar technologies, including PV, solar thermal electric and solar thermal technologies;

(b) onshore wind and offshore renewable technologies;

(c) battery and energy storage technologies;

(d) heat pumps and geothermal energy technologies;

(e) hydrogen technologies, including electrolysers and fuel cells;

(f) sustainable biogas and biomethane technologies;

(g) CCS technologies;

(h) electricity grid technologies, including electric charging technologies for transport and technologies to digitalise the grid;

(i) nuclear fission energy technologies, including nuclear fuel cycle technologies;

(j) sustainable alternative fuels technologies;

(k) hydropower technologies;

(l) renewable energy technologies, not covered under the previous categories;

(m) energy system-related energy efficiency technologies, including heat grid technologies;

(n) renewable fuels of non-biological origin technologies;

(o) biotech climate and energy solutions;

(p) transformative industrial technologies for decarbonisation not covered under the previous categories;

(q) CO2 transport and utilisation technologies;

(r) wind propulsion and electric propulsion technologies for transport;

(s) nuclear technologies not covered under previous categories.

CHAPTER II

ENABLING CONDITIONS FOR NET-ZERO TECHNOLOGY MANUFACTURING

SECTION I

Benchmarks

Article 5

Benchmarks

The Commission and Member States shall support net-zero manufacturing projects in accordance with this Chapter in order to ensure the reduction of strategic dependencies in the Union of net-zero technologies and their supply chains by reaching a manufacturing capacity for those technologies of:

(a) a benchmark of at least 40 % of the Union’s annual deployment needs for the corresponding technologies necessary to achieve the Union’s 2030 climate and energy targets;

(b) an increased Union share for the corresponding technologies with a view to reaching 15 % of world production by 2040 on the basis of monitoring pursuant to Article 42, except where the increased Union manufacturing capacity would be significantly higher than the Union’s deployment needs for the corresponding technologies necessary to achieve the Union’s 2040 climate and energy targets.

SECTION II

Streamlining administrative and permit-granting processes

Article 6

Single points of contact

Article 7

Online accessibility of information

Member States shall provide access to the following information on processes relevant to net-zero technology manufacturing projects, including net-zero strategic projects, online and in a centralised and easily accessible manner:

(a) the single points of contact referred to in Article 6(1);

(b) the permit-granting process, including information on dispute settlement;

(c) financing and investment services;

(d) funding possibilities at Union or Member State level;

(e) business support services, including but not limited to corporate tax declaration, local tax laws or labour law.

Article 8

Accelerating implementation

Member States shall provide administrative support to net-zero technology manufacturing projects located on their territory, to facilitate their timely and effective implementation, paying particular attention to SMEs involved in the projects, including by providing:

(a) assistance with regard to compliance with applicable administrative and reporting obligations;

(b) assistance to project promoters to inform the public with the aim of increasing public acceptance of the project;

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

Article 9

Duration of the permit-granting process

The permit-granting process for net-zero technology manufacturing projects shall not exceed any of the following time limits:

(a) 12 months for the construction or expansion of net-zero technology manufacturing projects with a yearly manufacturing capacity of less than 1 GW;

(b) 18 months for the construction or expansion of net-zero technology manufacturing projects with a yearly manufacturing capacity of 1 GW or more.

Article 10

Environmental assessments and authorisation

Under the coordinated procedure referred to in the first subparagraph, a competent authority shall coordinate the various individual assessments of the environmental impact of a particular project required by the relevant Union legislative acts.

Under the joint procedure referred to in the first subparagraph, a competent authority shall provide for a single assessment of the environmental impact of a particular project required by the relevant Union legislative acts. The application of the joint or coordinated procedure shall not affect the content of the environmental impact assessment.

Article 11

Planning

Article 12

Applicability of UNECE Conventions

SECTION III

Net-zero strategic projects

Article 13

Selection criteria

Member States shall recognise as net-zero strategic projects net-zero technology manufacturing projects located in the Union that contribute to achieving the objectives set out in Article 1, including contributing to the Union’s climate or energy targets, and fulfil at least one of the following criteria:

(a) the net-zero technology manufacturing project contributes to the technological and industrial resilience of the Union’s net-zero technologies by increasing the manufacturing capacity of a component or a segment of the net-zero technology supply chain by: (i) adding manufacturing capacity in the Union for a net-zero technology, for which the Union depends for more than 50 % on imports coming from third countries; (ii) adding significant manufacturing capacity by making a substantive contribution to the 2030 climate or energy objectives of the Union; or (iii) adding manufacturing capacity or updating existing manufacturing capacity in the Union for a net-zero technology, of which the Union’s manufacturing capacity represents a significant share of world production and which plays a crucial role in the resilience of the Union;

(b) the net-zero technology manufacturing project has a clear positive impact on the Union’s net-zero industry supply chain or downstream sectors by providing European net-zero industries with access to the best available net-zero technology or to products produced in a first-of-a-kind manufacturing facility, and fulfils at least one of the following criteria: (i) putting into place measures to attract, retain, upskill or reskill a workforce required for net-zero technologies, including through apprenticeships, traineeships, continuing education and training in close cooperation with regional and local authorities, education and training institutions, and social partners including trade unions; (ii) contributing to the competitiveness of SMEs as part of the supply chain of net-zero technologies;