Net-Zero Emissions

European Union
Net-Zero
Regulation
EU Regulation 2024/1735
Part 1: Recitals
Naeem Shahzad
https://www.linkedin.com/in/naeem-shahzad-b6b28b7/

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Recitals
Recitals or preambles are introductory paragraphs that explain the context, purpose,
and rationale for the directive.
• They do not have binding legal force but serve as an interpretive guide for
understanding the directive's intent and provisions.
• The recitals provide the background, alignment with EU goals (such as the Green
Deal or international frameworks), and the need for harmonized rules across
Member States.

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Net-Zero EU Regulation 2024/1735
1. Competitiveness in the Net-Zero Era for a
Sustainable Future
The net-zero transformation is driving
significant global industrial, economic, and
geopolitical shifts.
The Union must adapt to these changes while
advancing its energy, climate, and
environmental goals.
A strong manufacturing base is essential for
securing net-zero technologies and
maintaining quality jobs. To stay competitive,
the Union must prioritize innovation,
especially in clean technologies.

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2. Harmonizing Net-Zero Policies to Strengthen
the Internal Market
Uncoordinated national measures for net-zero
technologies risk distorting competition and
fragmenting the internal market.
Diverging regulations, support levels, and
procurement processes among Member
States create barriers to cross-border trade
and hinder market efficiency.
To address these challenges, a unified EU legal
framework is needed to enhance resilience
and ensure a secure supply of net-zero
technologies.

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3. The Green Deal, Fit for 55, & Net-Zero
Goals Path to Climate Neutrality
The EU is committed to accelerated
decarbonization and expanding renewable
energy to achieve climate neutrality by 2050,
as outlined in the European Green Deal.This
aligns with global climate commitments under
the Paris Agreement.
Regulation (EU) 2021/1119 sets a binding
target to reduce net greenhouse gas emissions
by at least 55% by 2030 compared to 1990.
The "Fit for 55" package, introduced in 2021,
updates EU laws to ensure the achievement of
this target.

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4. Green Deal Industrial Plan for Clean Energy Growth
Third, it focuses on developing a skilled workforce for the clean energy transition. Lastly the
fourth, it emphasizes trade and supply chain diversification by collaborating with partners to
strengthen critical raw material supply chains. These measures collectively support industrial
decarbonization and the EU’s green transition.
The Green Deal Industrial Plan (1 February
2023) outlines a strategy to scale up clean
energy technology through four key pillars. First,
it aims to simplify regulations and streamline
permit processes for net-zero technology
manufacturing. Second, it seeks to boost
investment and financing through the revised
State Aid framework and the STEP platform to
maintain the EU’s technological edge.

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5. Driving the EU’s Net-Zero Transition and Green Growth
These technologies are vital for fulfilling national energy and climate plans, strengthening
industrial resilience, and enabling decarbonization across sectors like energy, transport, buildings,
and industry. A robust net-zero industry will help meet the EU’s climate targets, advance the
European Green Deal objectives, and foster economic growth by creating quality jobs.
The internal market plays a crucial role in
accelerating access to technologies essential
for achieving the EU’s climate and energy goals
while making decarbonization a driver of
sustainable competitiveness.
The transition to a net-zero, resource-efficient
economy offers significant opportunities for
expanding the EU’s net-zero industry by
promoting investment in clean technologies
and their supply chains.

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6. Net-Zero Future: Clean Energy, Smart Cities, and Sustainability
EU must accelerate its transition to a
net-zero economy by increasing the
share of clean energy, improving
energy efficiency, and expanding
renewable energy sources.
These efforts will help achieve the
2030 targets outlined in the European
Pillar of Social Rights Action Plan,
supporting the implementation of the
European Pillar of Social Rights, first
proclaimed in Gothenburg in 2017

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7. Re-Power EU by Clean Energy Transition and Energy Security
The surge in energy prices following
Russia’s military aggression against
Ukraine has accelerated the European
Green Deal and strengthened the Energy
Union’s resilience under Regulation (EU)
2018/1999.
The Re-Power EU Plan (18 May 2022) plays
a crucial role in addressing global energy
disruptions by speeding up the clean
energy transition and reducing
dependence on Russian fossil fuels.
It focuses on cutting gas and electricity consumption while promoting investment in energy-
efficient and low-carbon solutions, ensuring a more sustainable and secure energy future for
the EU.

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8. Prioritizing Energy Efficiency for a
Sustainable Future
The Union prioritizes energy efficiency as
the most cost-effective, safe, and clean way
to meet its climate and energy targets.
The "energy efficiency first" principle guides
policy and investment decisions.
To support this, expanding manufacturing
capacity for energy-efficient technologies—
such as heat pumps, district heating and
cooling, and smart grids—is essential for
reducing and managing energy
consumption.

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9. Expanding Electricity Grids for a
Decarbonized Future
The Union's decarbonization goals, energy
security, digitalization, and electrification
require a massive expansion of electricity grids
at both transmission and distribution levels.
High-voltage direct current (HVDC) systems are
essential for connecting offshore renewables,
while smart grid technologies support demand-
side flexibility, electric vehicle charging, energy-
efficient buildings, and industry automation.
Enhanced data availability and observability are crucial for integrating smart charging, smart
buildings, and renewable energy adoption. Achieving this transition necessitates significant
expansion in manufacturing capacities for cables, substations, and transformers.

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10. Enhancing EU Policy for Energy Resilience
Additional policy efforts are needed to
enhance the EU's manufacturing capacity
for net-zero technologies, supporting its
2030 climate goals.
This involves improving market conditions
for existing technologies, ensuring supply
chain security, reducing market
fragmentation, and strengthening energy
system resilience and competitiveness.
It also includes access to sustainable, high-
quality fuels as outlined in EU Regulation
2022/1214.

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11. Regulatory Synergies for Net-Zero Technology
Manufacturing
This Regulation complements Regulation (EU)
2024/1252 by focusing on the manufacturing of
net-zero technologies, including final products,
specific components, and machinery.
In contrast, Regulation (EU) 2024/1252 addresses
the upstream supply chain, particularly critical raw
materials and their extraction, processing, and
recycling. Both regulations aim to support strategic
sectors such as net-zero technology industries, the
digital industry, and aerospace and defense.
Together, they create regulatory synergies by fostering business growth, upgrading skills, and
encouraging investment across the entire supply chain, covering processed materials except
for critical raw materials regulated under (EU) 2024/1252.

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12. Components in Net-Zero Technologies
A non-exhaustive annex should list final
products and specific components essential
for net-zero technologies, excluding raw
materials covered by Regulation (EU)
2024/1252. This annex aims to identify items
primarily used for net-zero technologies.
However, components or machinery not listed
may still be included if evidence, such as
market studies or off-take agreements, proves
their primary use in net-zero technology
production, except for critical raw materials
regulated under (EU) 2024/1252.

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13. Energy-Intensive Industries Inclusion in Net-
Zero Supply Chains
Certain components for net-zero technologies are
produced through energy-intensive processes in
industries like steel, aluminum, chemicals, cement,
glass, and paper. These industries have high
carbon emissions, making decarbonization
challenging.
Since energy-intensive industries contributed 17%
of the EU’s greenhouse gas emissions in 2019,
their decarbonization is crucial for climate
neutrality. Ensuring the supply of key components
for net-zero technologies depends on accelerating
decarbonization efforts in these sectors, aligning
with Regulation (EU) 2021/1119.

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13. Energy-Intensive Industries Inclusion in Net-
Zero Supply Chains
Energy-intensive industry facilities fall under this
Regulation if they produce specific components
primarily used in net-zero technologies. Unlike
other net-zero technology projects, these facilities
are included to support decarbonization efforts
and ensure a stable supply chain.
Their inclusion is conditional on projects that
significantly reduce CO₂ emissions from
production.
Targeted support for these sectors enhances
investment certainty, strengthens the internal
market's net-zero supply chain, and drives
demand for decarbonization technologies.

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14. Member State Discretion for Net-Zero
Technologies
The list of net-zero technologies identifies key
technologies for the EU’s decarbonization goals and
internal market development. However, not all
Member States recognize certain technologies as
clean energy sources, as they have the right to choose
their energy mix and industrial policies.
The list does not affect funding allocation under the
2021–2027 Multiannual Financial Framework,
including ETS-funded projects or EIB support.
Additionally, Member States are not required to
recognize strategic projects supporting technologies
they do not accept in their energy mix.

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15. Net-Zero Technologies for a Resilient
Energy System
To build a resilient future energy system,
the scaling-up of technologies should
cover the entire supply chain while
aligning with Regulations (EU) 2024/1252
and (EU) 2023/1781 to ensure consistency
and complementarity.

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16. Expansion of EU Manufacturing Capacity for Net-Zero Technologies
To strengthen energy security, resilience, and decarbonization, the EU must expand its
net-zero technology manufacturing capacity. The regulatory environment should
support manufacturers to enhance competitiveness and ensure supply security. Key
targets for 2030 include:
• Photovoltaic (PV) technologies: At least 30 GW of operational manufacturing
capacity, aligned with the European Solar Photovoltaic Industry Alliance.
• Wind and heat pumps: At least 36 GW for wind and 31 GW for heat pumps,
supporting 2030 energy and climate goals.
• Batteries: Meeting 90% of the EU's battery demand, with a manufacturing
capacity of at least 550 GWh, supporting the European Battery Alliance.
• Electrolysers: Supporting the REPowerEU plan with 10 million tonnes of domestic
renewable hydrogen production and up to 10 million tonnes of imports by 2030.

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16. Expansion of EU Manufacturing Capacity for Net-Zero Technologies
To translate the EU’s technological leadership into commercial success, electrolyser
manufacturers must scale up capacity to achieve at least 100 GW of deployed hydrogen
electrolyser capacity by 2030, as supported by the Electrolyser Joint Declaration and the
European Clean Hydrogen Alliance. The RePowerEU plan also targets 35 billion cubic
meters of sustainable biomethane production by 2030, leveraging Europe’s existing
supply chain to enhance resilience.
Additionally, EU manufacturers must expand production of sustainable aviation and
maritime fuels to help cut transport sector emissions by 90% by 2050, aligning with
Regulations (EU) 2023/2405 and 2023/1805.
The Renewable and Low-Carbon Fuels Value Chain Industrial Alliance supports this
transition. A strong regulatory framework is essential to scale up production across the
entire fuels value chain, from feedstock collection to refining and blending.

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17. Boosting EU Manufacturing Capacity to
Reduce Import Dependency
The EU's manufacturing capacity for certain
supply chain elements, such as inverters, solar
cells, wafers, and battery components, remains
low, increasing import dependency and supply
vulnerabilities.
To address this and meet climate and energy
targets, the EU should establish an overall
benchmark for net-zero technology
manufacturing. By 2030, the annual
manufacturing capacity for net-zero technologies
should aim to reach at least 40% of annual
deployment needs, ensuring greater self-
sufficiency and resilience.

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18. Strengthening Energy Security and Economic
Growth
Net-zero technology products enhance the EU’s
resilience and energy security, which are
essential for economic development, public
order, and security.
They also support key sectors like farming
and food production by ensuring access to
clean energy and affordable machinery,
strengthening food security and promoting bio-
based alternatives through the circular
economy.
Additionally, achieving the EU’s climate goals
will drive economic growth and improve social
well-being.

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19. Competitiveness in the Global Net-Zero Market
The global market for mass-manufactured clean
energy technologies is expected to reach USD
650 billion annually by 2030, more than three
times its current value.
As the net-zero industry grows rapidly, the EU
can ensure prosperity for its citizens by
maintaining global competitiveness.
A strong and competitive EU net-zero
technology sector will support domestic
manufacturing capacity, enhance supply chain
resilience, and improve access to critical net-
zero technologies.

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20. EU Global Leadership in Manufacturing of Net-
Zero Technologies
The manufacturing of net-zero technologies relies
on complex global value chains. To remain
competitive and reduce strategic import
dependencies without creating new ones, the EU
must strengthen its industrial base and foster
innovation.
To enhance supply security and meet climate and
energy goals, the EU should aim to increase its
share of global net-zero technology production to
15% by 2040. This target will be monitored under
the regulation and will not apply where EU
production significantly exceeds deployment
needs.

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21. Streamlining Permitting for Net-Zero Projects
To accelerate the deployment and expansion of net-
zero technology manufacturing projects, including
strategic projects, the administrative burden on
project promoters should be minimized to ensure
efficiency in planning and investment certainty.
Member States should streamline permit-granting
processes while maintaining safety, security, and
environmental sustainability. EU environmental
laws provide common conditions for national
permitting, ensuring high environmental protection.
However, granting net-zero strategic project status
does not exempt projects from complying with
existing environmental, social, and safety
regulations under relevant EU directives.

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22. Single Points of Contact for Streamlined
Permitting
Member States can designate single
points of contact at local, regional,
national, or other administrative levels to
streamline the permit-granting process.
These contact points should communicate
project requirements to promoters and
coordinate with competent authorities to
prevent duplication of requests, such as
studies, permits, or authorizations,
ensuring an efficient approval process.

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23. Centralized Coordination for Efficient Permitting
To simplify and enhance the efficiency of the
permit-granting process, net-zero manufacturing
project promoters should interact with a single
point of contact responsible for coordinating the
entire process.
Member States should designate one or more
contact points, ensuring that each promoter deals
with only one. It is up to Member States to decide
whether these contact points also have permitting
authority. To ensure effective implementation,
sufficient personnel and resources must be
allocated to these contact points and relevant
authorities.

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24. Administrative Efficiency Through the Single
Digital Gateway
To reduce administrative burdens for businesses
and project promoters, including cross-border
projects, the Single Digital Gateway (Regulation EU,
2018/1724) provides online access to information,
procedures, and assistance services related to the
internal market.
Permit-granting process requirements under this
Regulation align with Annex I and II of Regulation
(EU) 2018/1724, ensuring fully online procedures
and the use of the Once-Only Technical System.
Additionally, single points of contact established
under this Regulation are included in the list of
assistance and problem-solving services in Annex III.

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25. Permit Processes for Net-Zero Technology Projects
Net-zero technology manufacturing projects face long and
complex permit-granting processes, often lasting between
two and seven years. These delays create barriers to
investment, particularly for large-scale projects.
To provide clarity and accelerate development, Member
States should set maximum time limits for permits:
12 months for strategic projects over 1 GW, 9 months for
those under 1 GW, and 18 months for CO₂ storage and
related projects. Standard net-zero technology projects
should have limits of 18 months for facilities over 1 GW and
12 months for smaller ones.
Environmental impact assessments, led by project
promoters, should not count towards these timelines. In
exceptional cases, extensions may be allowed due to
unforeseen circumstances.

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26. Designation and Benefits of Net-Zero Strategic
Projects
Some net-zero manufacturing projects may be designated
as net-zero strategic projects due to their benefits, such as
reducing the Union’s dependencies and supporting
climate goals. These projects strengthen industrial
resilience by increasing manufacturing capacity in key
supply chains, addressing import vulnerabilities, and
enhancing global competitiveness. They also contribute to
skills development and sustainable manufacturing.
Member States should select such projects for priority
status, ensuring faster implementation through expedited
permitting. Project promoters must formally apply for this
status based on established criteria.

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27. Environmental Assessments for Net-Zero
Projects
Environmental assessments for net-zero
technology projects are essential to
safeguard water, soil, air, ecosystems, and
biodiversity.
To ensure timely and predictable permit-
granting processes, assessments should be
streamlined without lowering
environmental protection standards.
Bundling necessary assessments and pre-
defining their scope can help avoid
unnecessary overlaps and follow-ups.

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28. Integrating Net-Zero Technology in Land
Use Planning
Effective land use planning, including spatial
plans and zoning, can help mitigate conflicts
that hinder net-zero technology
manufacturing projects.
Considering public consultations and
environmental impacts, these plans balance
public interest and accelerate sustainable
deployment.
Authorities at all levels should be
encouraged to integrate net-zero technology
manufacturing, including strategic projects,
into their planning frameworks.

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29. Promoting Net-Zero Acceleration Valleys for
Industrial Clustering
The regulation promotes Net-Zero Acceleration Valleys
to cluster industrial activities, enhancing efficiency and
minimizing environmental impact. These Valleys aim
to attract manufacturing, streamline administrative
processes, and support industrial symbiosis.
Member States should designate Valleys based on
geographic and technological factors, ensuring
infrastructure, skilled labor availability, and alignment
with existing projects. They should also support
regional reindustrialization, particularly in coal
transition areas, fostering a just transition. Each Valley
designation must include a national plan to enhance
its attractiveness for net-zero industrial activities.

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30. Designation and Support of Net-Zero
Acceleration Valleys
Member States should designate and support Net-
Zero Acceleration Valleys by developing a plan that
defines covered manufacturing activities, conducts
environmental impact assessments, and outlines
national measures to mitigate environmental
effects.
The plan should also include measures to boost
industrial activity, such as investments in
infrastructure, energy cost reduction, intellectual
property protection, and innovation hubs to
attract start-ups. To ensure investment security,
the plan should specify the duration of support
measures.

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31. Supporting Net-Zero Valleys in Transition
Regions
Member States are encouraged to establish
Net-Zero Acceleration Valleys in less
developed and transition regions. These
Valleys can receive public financial support
for infrastructure development, brownfield
site conversion, and local skills enhancement.
Funding sources include the European
Regional Development Fund, Cohesion Fund,
Just Transition Fund, and European Social
Fund Plus, with the highest possible co-
financing rates allowed under each fund’s
regulations.

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32. Valleys as Public Interest for Net-Zero Transition
Valleys play a crucial role in the Union’s strategic
autonomy, security of supply for net-zero
technologies, and green and digital transition.
To support their development, permitting
authorities should consider projects in Valleys as
being in the public interest under Union
environmental law. These projects must not cause
major unmitigable environmental harm.
If an ex-ante assessment confirms that their
benefits outweigh environmental concerns, they
can be authorized, provided they comply with
relevant EU environmental regulations.

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33. Efficiency in Net-Zero Project Approvals
Lengthy and complex national permit-
granting processes hinder investment security
for net-zero technology projects. To
accelerate implementation, Member States
should adopt streamlined and efficient
permitting procedures and explore policy
innovations.
Net-zero strategic projects should be
prioritized as urgent under national law,
ensuring faster dispute resolution while
respecting legal rights. Other net-zero
projects should also benefit from improved
permitting processes where possible.

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34. Prioritization and Support for Net-Zero
Strategic Projects
To achieve the 2030 goals and net-zero CO2
emissions by 2050, net-zero strategic
projects must be prioritized due to their
role in the Union’s strategic autonomy and
clean energy transition.
These projects should benefit from
streamlined permitting, the highest
national significance status, and additional
investment support while complying with
Union and international environmental,
social, and labor regulations.

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35. Public Interest Consideration for Net-
Zero Strategic Projects
Net-zero strategic projects should be
considered in the public interest due to
their role in the Union’s security of
supply, strategic autonomy, and green
transition.
Permitting authorities may authorize
these projects if, after case-by-case
assessments, their public interest
outweighs environmental concerns,
provided all relevant EU environmental
directives are met.

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36. Boosting CO₂ Injection
Capacity to Meet 2030 Targets
Measures are needed to
achieve the EU’s goal of 50
million tonnes of annual
CO injection capacity by
2030 to support industrial
decarbonization and combat
climate change.

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37. EU Strategy for Energy System Integration
The 2020 EU strategy for energy system
integration aims to accelerate the transition
to a climate-neutral economy at the lowest
cost. It focuses on three key concepts: a
circular energy system centered on efficiency,
increased direct electrification of end-use
sectors, and the use of renewable and low-
carbon fuels like hydrogen.
The strategy promotes integrating all
renewable electricity into the energy system
through storage, grid expansion, and
demand-side management.

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38. Carbon Capture and Storage (CCS)
for Climate Change Mitigation
Carbon Capture and Storage (CCS)
is a technology that will contribute
to mitigating climate change.
It consists of the capture of CO2
from industrial installations, its
transport to a storage site and its
injection into a suitable
underground geological formation
for the purposes of permanent
storage.

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39. Addressing Coordination Challenges in CCS
Development
The development of CCS for industry faces
coordination challenges. Despite economic
viability due to the CO₂ price signal from the
ETS, industries capturing CO₂ risk lacking
access to storage sites, while investors in
storage sites face high upfront costs.
Greater transparency on geological CO₂ storage
capacity and existing geological data can help
market operators plan investments. Member
States should make relevant data publicly
available while considering confidentiality,
security, and commercial sensitivities.
Regular reporting on storage site development
and capacity needs is essential to meeting the
Union-wide CO₂ injection target, though Member
States retain the right to limit or refuse CO₂
storage deployment.

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40. Building a Competitive and Complete
CCS Value Chain by 2030
A complete and competitive CCS value
chain, including capture, transport, and
storage, must be established by 2030
through effective EU and national
policies to prevent stranded assets and
ensure CO₂ reductions.

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41. Scaling Up CO₂ Storage and Transport for Net-
Zero
The EU aims to develop a robust CO₂ storage and
transport infrastructure to support carbon capture
investments and meet net-zero targets. A Union-
wide target of 50 million tonnes of annual CO₂
injection capacity by 2030 will help coordinate
industry efforts and de-risk investments.
Expanding permitted geological storage sites and
transport infrastructure is crucial for long-term
decarbonization, with an estimated need for 550
million tonnes of CO₂ capture by 2050. Member
States should facilitate CCS deployment through
supportive policies and investment incentives.

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42. Safe and Effective International
CO₂ Storage
International agreements on
storing the EU’s CO₂ in third
countries must ensure secure,
environmentally safe storage and
prevent its use for increasing
hydrocarbon production, ensuring
genuine emissions reduction.

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43. Accelerating CO₂ Storage Development for 2030
Targets
Defining CO₂ storage sites and related infrastructure
as net-zero strategic projects can accelerate their
development and meet growing industrial demand
cost-effectively. Depleting gas and oil fields can be
converted into storage sites, leveraging the expertise
of the oil and gas industry.
To achieve the Union’s 50 million tonnes annual CO₂
injection target by 2030, oil and gas producers
should contribute proportionally while fostering
collaboration. A coordinated value-chain approach at
both Union and national levels is essential for timely,
cost-effective deployment and viable business
models for carbon capture and storage.

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44. Collaboration for CO₂ Injection Capacity
Compliance
Obligated entities can partner with non-
obligated entities through agreements to
meet their CO₂ injection capacity
obligations. These agreements may be
part of joint ventures establishing storage
sites or separate arrangements fulfilling
obligations.
Existing joint ventures formed before the
regulation's enforcement can fully count
their injection capacity toward the
obligated partners' commitments.

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45. Assessment of CO₂ Storage Market
Conditions
The Commission should evaluate the
demand for CO₂ injection capacity
from capture projects and the
necessary transport infrastructure.
This assessment will ensure that
storage sites are developed under
stable market conditions and align
with the 2030 storage capacity
obligations.

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46. Derogations for CO₂ Injection
Obligations
Derogations are crucial to prevent
stranded assets. Member States and
the Commission should collaborate with
authorized entities to assess the need
for exemptions.
If no derogation is granted, or if a
Member State does not request one,
efforts will be made to address barriers
and ensure compliance with the Union’s
CO₂ injection capacity objectives.

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47. Cross-Border CO₂ Transport Infrastructure
Additional policy efforts are needed to
support cross-border infrastructure
planning for CO₂ transport.
A range of transport methods, including
ships, barges, trains, trucks, pipelines, and
related facilities, are essential for the
effective deployment of CCS and carbon
capture and utilization projects.

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48. Support for CO₂ Transport Network
Development
Member States should be able to
establish or support entities focused
on developing CO₂ transport
networks, including infrastructure
construction and the provision of
transport vessels or other means of
conveyance.

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49. Establishing a Union-Wide CO₂ Market
A well-functioning EU-wide market for CO₂
capture, storage, transport, and utilization is
essential for achieving sustainable and cost-
effective industrial decarbonization.
This market should ensure that unavoidable
CO₂ emissions are either stored or utilized in
line with climate goals while maintaining
safety, sustainability, and compliance with
environmental standards.
A supporting CO₂ transport network must be
accessible, fair, and environmentally efficient.

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50. Utilizing Captured CO₂ for Sustainability
Captured CO₂ can be permanently stored
or used in production processes to
reduce fossil fuel dependence.
Entities in the CO₂ injection value chain
should explore ways to integrate CO₂
storage into new products or support the
Union’s sustainability goals.

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51. Fair Trade, Sustainability, and Industrial
Competitiveness
The Union supports a fair, transparent, and
rules-based global trade system while
promoting social, environmental, and climate
standards.
It seeks to level the playing field by reforming
the WTO, fostering new partnerships, and
addressing unfair trade practices and
overcapacity.
Through Net-Zero Industrial Partnerships, it
aims to ensure fair competition and create
quality jobs for workers.

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52. Fostering Innovation for Net-Zero
Technologies
A supportive internal market is essential for
fostering innovation in net-zero technologies to
ensure the Union’s resilience and climate
neutrality goals.
Innovation is key to competitiveness and
accelerating net-zero objectives. Given rapid
technological advancements and regulatory
guidance for the green transition, Union laws
and policies must consider their impact on
innovation through the innovation principle
during preparation, review, and revision.

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53. Aligning Transition Pathways with
Net-Zero Goals
The Commission may update the
Transition Pathways from its 2021
communication to align with this
Regulation's objectives, identifying
enablers and bottlenecks for industry
transition and competitiveness.

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54. Strengthening the Industrial Base for
Net-Zero Technologies
The Union aims to establish a strong
industrial base for net-zero technologies
to secure energy supply and achieve
climate neutrality.
To prevent dependencies that could
hinder emissions reduction or energy
security, this Regulation promotes
demand for sustainable and resilient
net-zero technologies.

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55. Ensuring Effective Public Procurement for
Net-Zero Products
Mandatory minimum requirements help
leverage public spending to drive demand for
environmentally sustainable net-zero
products.
Exceptions apply in cases of monopolies,
market failures, high costs, or technical
incompatibilities.
Contracting authorities can impose additional
requirements and use award criteria like price
and cost, as long as they comply with
relevant EU directives and sectoral laws.

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56. Enhancing Resilience in Works Contracts
and Concessions
Contracting authorities should include
specific conditions in works contracts to
address social, employment, and
cybersecurity concerns while ensuring
timely delivery.
These measures enhance resilience but
allow exceptions for monopolies, market
failures, high costs, or technical
incompatibilities.

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57. Ensuring Resilience in Net-Zero Technology
Procurement
To reduce dependency on third countries,
contracting authorities must set
procurement conditions if over 50% of a
net-zero technology or its key components
originate from a single third country.
A similar mechanism applies if the share
rises by 10 percentage points over two
years, reaching at least 40%.
Exceptions exist for suppliers from countries
under WTO or other relevant trade
agreements.

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58. Enforcing Compliance with Resilience
Requirements
If resilience requirements are not met,
contractors must pay at least 10% of
the net-zero technology contract value
as a charge to the contracting authority,
ensuring compliance with procurement
rules.

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59. Ensuring Fair Competition in Net-Zero
Technology Procurement
Member States must not discriminate
against providers of net-zero
technologies from other Member
States, ensuring equal treatment and
open competition in public
procurement, in line with existing EU
directives.

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60. Environmental Sustainability in Net-Zero
Procurement
Contracting authorities can consider
various climate and environmental
impacts when evaluating net-zero
solutions, provided they comply with
relevant EU regulations.

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61. Commission's Role in Defining
Sustainability Criteria
The Commission should establish guiding
principles for contracting authorities to
set technical specifications and contract
conditions for environmental
sustainability in public contracts, ensuring
compliance with relevant EU regulations.

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62. Ensuring Supply Diversification in
Public Procurement
To support renewable energy and
diversify net-zero technology sources,
supply should be considered
insufficiently diversified if over 50% of a
specific technology or its main
components come from a single third
country, while respecting the Union’s
international commitments.

67
63. Pre-Qualification Criteria for Renewable
Energy Auctions
To ensure responsible business conduct,
cybersecurity, data security, and timely
project delivery, public authorities should
include relevant pre-qualification criteria in
renewable energy deployment auctions.

68
64. Enhancing Sustainability in Renewable
Energy Auctions
To strengthen the industrial base for
renewable energy technologies and reduce
dependency risks, public authorities should
design auctions that promote sustainability
and resilience.
Member States should assess bids based on
environmental sustainability, innovation,
and energy system integration. They may
introduce pre-qualification criteria for
bidder eligibility and award criteria to rank
projects.

69
65. Environmental Sustainability Criteria in
Renewable Energy Auctions
Public authorities may consider various
environmental factors when designing
auctions for renewable energy deployment.
These factors include durability,
repairability, recyclability, resource
consumption, carbon footprint, emissions,
waste generation, and the use of renewable
or recycled materials.
Such criteria can be applied as pre-
qualification or award criteria to enhance
sustainability.

70
66. Encouraging Innovation in Renewable
Energy Auctions
Bids for renewable energy projects may
include pre-qualification or award
criteria that promote innovation.
This can involve supporting entirely new
solutions or enhancing existing state-of-
the-art technologies to drive
advancements in renewable energy.

71
67. Promoting Energy System Integration
in Renewable Energy Auctions
Bids for renewable energy projects may
consider contributions to energy system
integration, such as energy storage,
waste heat and cold recovery, and
renewable hydrogen production, to
enhance cost-effective decarbonization.

72
68. Enhancing Supply Resilience in
To reduce dependency on highly
concentrated supply sources, public
authorities should include resilience
criteria in renewable energy auctions.
Projects should promote diversified
supply chains, especially if more than
50% of a net-zero technology or its key
components come from a single third
country, while respecting the Union’s
international commitments.

73
69. Balancing Sustainability and Competitiveness
in Renewable Energy Auctions
Authorities designing renewable energy
auctions can prioritize sustainability,
resilience, innovation, and energy system
integration as award criteria, provided they
comply with State aid rules.
The weighting of these criteria must maintain
competitiveness and adhere to Articles 107
and 108 of the Treaty on the Functioning of
the European Union (TFEU).

74
70. Gradual Increase in Non-Price Criteria for
To boost the Union’s supply of renewable energy
technologies and meet manufacturing
benchmarks by 2030, a specific share of
auctioned volume will include non-price criteria.
The Commission will assess their impact every
two years, ensuring they enhance security of
supply without significantly hindering renewable
energy targets.
If beneficial, their application will gradually
increase, aiming for 50% by the end of 2029, with
each step subject to impact assessments.

75
71. Assessing the Impact of Resilience and
Sustainability Criteria
The application of resilience and sustainability
criteria may affect Member States differently
based on their renewable energy goals and
decarbonization strategies.
The Commission will evaluate their financial
and deployment impact across the Union,
including effects on households and
businesses.
To ensure practical implementation, the
Commission will consult national authorities
conducting auctions in a structured and
transparent manner.

76
72. Exemption for Small Renewable
Energy Projects
To reduce the regulatory burden on
small-scale renewable energy projects,
Member States may exclude auctions
supporting projects with a maximum
capacity of 10 megawatts from the
total annual auctioned capacity
calculation.

77
73. Flexibility in Undersubscribed Auctions
If auctions applying pre-qualification,
resilience, and sustainability criteria are
undersubscribed, Member States can
exclude the unmet portion from these
requirements to avoid slowing down
renewable energy deployment.
An auction is considered undersubscribed
when the total bid volume is lower than the
auctioned capacity.

78
74. Ensuring Diversified Supply for Net-
Zero Technologies
To promote net-zero technology
adoption, supply is considered
insufficiently diversified if a single
source provides over 50% of the Union’s
demand.
The Commission will publish an annual
list detailing the origin distribution of
these technologies to ensure
transparency and consistency.

79
75. Exemptions for Trade Agreement
Signatories
Under the GPA and other international
agreements, the EU must not impose
resilience requirements on net-zero
technologies or their components from
signatory countries.
This ensures compliance with trade
liberalization commitments while
maintaining fair competition in public
procurement.

80
76. Alignment with Existing Procurement
Rules
The resilience provisions in public
procurement must comply with existing
EU directives and guidelines on third-
country participation.
Procurement rules under this regulation
remain applicable, ensuring consistency
with Directive 2014/24/EU, Directive
2014/25/EU, and related regulations.

81
77. Deferral for Smaller Buyers and Low-
Value Contracts
To reduce the administrative burden,
especially for smaller public buyers
and lower-value contracts, the
application of sustainability and
resilience requirements will be
deferred for two years for non-
central purchasing bodies and
contracts below EUR 25 million.

82
78. Procurement Compliance with EU
Regulation 2017/1369
Contracting authorities must
purchase products that meet the
requirements set by delegated acts
under Regulation (EU) 2017/1369
when applying public procurement
provisions under this Regulation.

83
79. Public Support for Net-Zero Technology
Adoption
Public support schemes should
incentivize households, especially low-
income groups, to adopt net-zero
technologies, such as rooftop solar panels
and heat pumps.
Member States should design these
programs to enhance sustainability and
resilience while ensuring transparency,
accessibility, and compliance with State
aid and WTO rules.

84
80. Compliance with International
Commitments in Support Schemes
Authorities must design net-zero
technology incentive schemes in
line with the EU’s international
commitments, ensuring they do not
significantly harm the interests of
WTO members.

85
81. Commission Support for Sustainable
Procurement and Incentive Schemes
The Commission will assist Member
States in designing support schemes
and promoting best practices. The Net-
Zero Europe Platform will help
accelerate sustainability and resilience
efforts in procurement and auctions.
An implementing act will define
assessment criteria, ensuring fair
competition and SME participation.

86
82. Predictability in Public Procurement for
Renewable Energy
To enhance industry resilience, public
procurement and auctions for renewable
energy must be predictable.
Contracting authorities should inform
the market in advance about estimated
procurement needs for net-zero
technology products, allowing the
industry to adjust production
accordingly.

87
83. Supporting Net-Zero Deployment in
Industry
The Union may take measures to
facilitate the deployment of net-zero
technologies in industrial value chains,
with a focus on SMEs, by improving
connections between supply and
demand in the industry.

88
84. Addressing Competitive Challenges
in the Green Industry
The Union's industry faces pressure
from foreign subsidies that distort
competition, threatening market
shares.
To maintain and develop its industry,
the Union must respond swiftly and
ambitiously by modernizing its legal
framework.

89
85. Reducing Strategic Dependencies in
Net-Zero Technologies
To avoid exacerbating reliance on third
countries, public procurement and
auctions should include justified limits
on foreign-sourced products when
necessary. The Commission may
impose such restrictions if resilience
conditions are met.
Additionally, the Union should address
unfair foreign subsidies using available
regulatory measures.

90
86. Financing the Net-Zero Transition
Access to public and private finance is essential for
the EU’s strategic autonomy and competitive net-
zero technology manufacturing. Most investments
will come from private capital, supported by a
stable policy framework and deep capital markets.
Advancing the Capital Markets Union and
sustainable finance initiatives is crucial to meeting
investment needs, estimated at EUR 92 billion from
2023 to 2030, with public funding requirements of
EUR 16–18 billion. The actual investment need is
likely higher.

91
87. Balancing Private and Public Investment in Net-Zero
Technologies
Private investment is crucial for net-zero technology
projects, but public support, such as guarantees, loans, or
equity, may be needed where private funding falls short.
State aid should be necessary, targeted, temporary, and
proportionate to maintain fair competition.
Existing State aid guidelines and the Temporary Crisis and
Transition Framework (March 2023) allow Member States
to support investments in net-zero sectors, including tax
benefits. To prevent market fragmentation, aid should
address real risks of investment diversion outside the
EEA. Member States are encouraged to allocate 25% of
their ETS revenues to support these projects.

92
88. Targeted and Temporary State Aid for
Green Transition
Any additional State aid should be
targeted, temporary, and aligned with
EU policies like the European Green
Deal.
It should not create disparities among
Member States, ensuring consistency
with the Union’s competition and
cohesion policies.

93
89. Damages Strategic Use of Public
Support
Public support should address
market failures without duplicating
private investment or distorting
competition.
It should add clear value to the EU,
focusing on infrastructure,
innovation, and scaling
breakthrough technologies.

94
90. EU Funding for Net-Zero Technologies
Various EU programs, such as the
Recovery and Resilience Facility,
InvestEU, cohesion policy programs, and
the Innovation Fund, provide funding
for net-zero technology manufacturing.
Additionally, Strategic Technologies for
Europe Platform (STEP) aims to better
direct existing EU funds toward critical
clean technology investments.

95
91. Additional EU Support for Net-Zero
Industry
Regulation (EU) 2023/435 allocates €20
billion in non-repayable support to
Member States to enhance energy
efficiency and replace fossil fuels,
including investments in net-zero
industry projects.
The Commission encourages Member
States to integrate net-zero technology
manufacturing and industrial innovation
into their REPowerEU recovery plans.

96
92. Public Procurement Invest EU Support
for Net-Zero Technologies
InvestEU is the EU’s key program for
driving investment in the green and
digital transition by offering financing and
technical assistance. It leverages public
and private capital through blending
mechanisms.
Member States are encouraged to
contribute to its funding to support net-
zero technology manufacturing, in
compliance with State aid rules.

97
93. Obligations Cohesion Policy Support for Net-Zero
Projects
Member States can use cohesion policy programs
to support net-zero strategic and manufacturing
projects, especially in less developed regions and
Just Transition Fund territories. Funding can cover
infrastructure, innovation, SME manufacturing,
services, training, and capacity building.
The Technical Support Instrument can assist in
strategy development, business improvements,
and permitting. Investments should be integrated
into EU value chains, with a focus on interregional
and cross-border cooperation.

98
94. Innovation Fund for Net-Zero
Technologies
The Innovation Fund offers a cost-
efficient way to scale up manufacturing
and deployment of clean hydrogen and
other net-zero technologies,
strengthening the EU’s sovereignty in
key climate and energy technologies.

99
95. Enhancing Coordination for Net-Zero
Investments
To improve investment efficiency, the EU
and Member States should better
coordinate public and private funding
efforts, aligning national and EU programs
with industry needs.
The Platform will play a key role in
identifying funding opportunities and
addressing regulatory, investment, and
location challenges for net-zero projects.

100
96. Simplifying Administrative Procedures
for Net-Zero Projects
To accelerate the implementation of
net-zero technology and strategic
projects crucial for the EU’s energy
supply, certain administrative
restrictions should be eased or
simplified.

101
97. Utilizing Space Data for Environmental
Assessments
The EU Space Programme, particularly
Copernicus, should be used to support
environmental assessments and
authorizations by providing data on
geology, ecology, socio-economic
development, and resource availability.
Copernicus' CO₂ monitoring capabilities
are especially relevant for evaluating the
impact of industrial projects and carbon
sinks on global greenhouse gas levels.

102
98. European Standards for Regulation
Support
The Commission should request
European standardization organizations
to develop standards that support the
objectives of this Regulation, as
outlined in Article 10(1) of Regulation
(EU) No 1025/2012.

103
99. Boosting Hydrogen Valleys for Industry
Decarbonization
REPowerEU seeks to double Hydrogen
Valleys to support decarbonization.
Member States should streamline
permitting, establish regulatory
sandboxes, and secure funding.
Cross-border interconnection and
integration into smart grids should be
encouraged.

104
100.Net-Zero Regulatory Sandboxes for Innovation
Net-zero regulatory sandboxes facilitate testing
of innovative technologies in controlled real-
world environments, promoting regulatory
learning and scaling. They support the
transition to a climate-neutral economy and
reduce strategic dependencies.
Member States can introduce sandboxes with
legal safeguards while ensuring compliance
with Union law. The Commission’s 2023
Guidance aids their implementation,
recognizing their role in climate neutrality and
energy resilience.

105
101.Revised SET Plan for Clean Energy Innovation
The revised Strategic Energy Technology (SET) Plan,
aligned with the European Green Deal and REPowerEU,
promotes clean, efficient, and cost-competitive energy
technologies through coordinated research and
innovation. It enhances collaboration between industry,
research organizations, and governments, supporting
Europe’s decarbonization goals.
The Strategic Energy Technology Plan (SET Plan) has
accelerated joint R&I efforts, leveraging national
funding and fostering cross-sectoral cooperation under
Horizon Europe. This Regulation strengthens the
connection between European innovation and the
manufacturing of new technologies.

106
102.Workforce Development for Green and Digital
Transition
The green and digital transitions require a skilled
workforce to support the growth of net-zero industries,
maintain quality jobs, and scale up supply chains in the
EU. Significant investment in reskilling and upskilling,
including vocational training, is essential.
The energy transition will create many job opportunities,
particularly in renewable energy, energy storage, and
raw materials. By 2030, the fuel cell hydrogen sector
alone will need 180,000 trained workers, while the solar
energy manufacturing sector will require up to 66,000
jobs. Addressing skill gaps and making net-zero
technology careers attractive is crucial.

107
103.Addressing Skills for Net-Zero Industries
Boosting the EU’s net-zero manufacturing capacity
requires a larger skilled workforce. Measures should
promote labor market integration, especially for
women, NEETs (Not in Education, Employment, or
Training), migrants, older individuals, and persons with
disabilities. The EU also needs to attract more skilled
migrants. Support for workers transitioning from
declining sectors is crucial, ensuring investment in skills
for all, with a focus on vulnerable groups and
transitioning regions.
The goal is to create quality jobs with fair wages,
improved working conditions, and access to lifelong
learning, aligning with the EU’s employment and
training targets.

108
103.Addressing Labor Shortages for Net-Zero Industries
Labor shortages in net-zero sectors may stem from
unattractive jobs and poor working conditions. Improving
job quality is crucial to attracting workers. The EU aims to
enhance skills development by leveraging initiatives like
the EU Pact for Skills, CEDEFOP, and sectoral cooperation
programs. Collaboration among governments, training
providers, industry, and universities is essential for
identifying skills needs and scaling up training.
Financial support from EU programs, including ESF+,
InvestEU, and Horizon Europe, should be utilized.
Additionally, the European Net-Zero Industry Academies
will be established with initial EU funding, aiming for
financial sustainability within three years.

109
104.European Net-Zero Industry Academies
The Academies will develop training programs,
materials, and credentials to upskill and reskill
workers for key net-zero technology value chains.
They will provide these resources to education and
training providers across Member States for voluntary
use while respecting national education policies.
Their goal is to support the EU’s reindustrialization
and decarbonization by addressing critical skills
shortages and enhancing innovation. The Academies
will be launched based on an EU skills assessment and
will set milestones and learner targets to meet
industry needs.

110
105.Inclusive and Multilingual Training by Academies
The Academies will promote transversal skills for
occupational mobility and provide training at all
skill levels across net-zero technology sectors.
Learning content will be available in multiple
languages to maximize accessibility. Member
States can supplement the materials with national
labor laws and sector-specific information.
Additionally, training will target public
administration employees involved in permitting
and regulations, helping build capacity and reduce
disparities across Member States.

111
106.Enhancing Skills Recognition and Worker Mobility
The Academies will support worker mobility and
skills transparency by developing credentials,
including micro-credentials, to certify learning
achievements. These credentials may be issued by
education providers in Member States and should
be in a European digital format, integrated into
Europass, and linked to National Qualifications
Frameworks where feasible.
Additionally, EURES will help connect workers with
job opportunities in net-zero technologies by
facilitating recruitment and publishing relevant job
profiles.

112
107.Oversight and Monitoring of Academies
The Platform will guide the Academies to ensure
their training programs address identified skills
shortages. Member States should appoint
representatives to connect national authorities,
social partners, and industry stakeholders. The
Platform will monitor progress, analyze skill gaps,
and assess how effectively the Academies’
programs complement existing training.
A progress report will be submitted three years
after each Academy’s establishment, detailing
learner participation by sector, gender, age, and
education level.

113
108.Regulation of Professions and Skills Availability
Member States have the authority to regulate
access to professions, but such regulations must
comply with EU principles of non-discrimination
and proportionality. While no EU-wide
minimum training requirements exist for
regulated professions, national rules should not
create unjustified barriers.
When assessing regulations, Member States
should consider their impact on skills availability
in the Net-Zero Industry and aim to minimize
restrictions where possible.

114
109.Recognition of Academy Credentials for
Regulated Professions
If a Member State deems the learning
programs from the Academies equivalent
to its required qualifications for net-zero
industry professions, it should recognize
these credentials as sufficient evidence
for access to regulated professions.
This facilitates worker mobility in the net-
zero industry, in line with EU Directive
2005/36/EC.

115
110.Industrial Deployment of Net-Zero
Technologies
The full impact of net-zero technologies
on the EU’s decarbonization goals
depends on their deployment, primarily in
industrial processes.
To attract investments and secure quality
jobs while meeting decarbonization
targets, this regulation aims to enhance
the investment climate for industry within
the Union.

116
111.Establishment of a Union-Level Platform
A Platform, composed of Member States
and chaired by the Commission, will be
created to coordinate actions, provide
advice, and facilitate information
exchange on this Regulation.
It will focus on permitting, strategic
projects, financing, market access, skills,
and regulatory sandboxes.
The Platform may form subgroups and
invite experts to support its work.

117
112.Collaboration and Synergies of the Platform
The Platform will collaborate with other
Commission initiatives, platforms, and groups
to maximize synergies, share expertise, and
engage stakeholders while avoiding
duplication. It will work with key industrial
alliances, including those for batteries, solar
photovoltaics, clean hydrogen, zero-emission
aviation, semiconductors, and renewable fuels.
Additionally, it will support sectors not
currently represented in alliances and
coordinate with the Critical Raw Materials
Board on strategic partnerships.

118
113.Reducing Regulatory and Administrative Burdens
To support industries in adapting to climate and
energy transitions, the EU aims to significantly
reduce regulatory burdens by 2030, especially for
introducing new products to the internal market.
This effort will align with the Better Regulation
framework while maintaining environmental and
labor standards.
The Commission will keep the Platform informed on
regulatory developments, referencing key reports
on clean energy competitiveness and annual
burden assessments.

119
114.National Energy and Climate Plans (NECPs)
and Net-Zero Technologies
Under Regulation (EU) 2018/1999, Member
States must update their 2021–2030 National
Energy and Climate Plans (NECPs) to outline
objectives and policies for scaling up
manufacturing of energy-efficient and low-
carbon technologies. These plans should also
address diversification efforts in third countries
and support CO₂ capture, transport, and
storage. NECPs will help determine the
demand for net-zero technologies while
considering long-term competitiveness,
research, and innovation in net-zero industries.

120
115.Net-Zero Industrial Partnerships for Global
Cooperation
The Commission plans to establish Net-Zero Industrial
Partnerships to enhance global cooperation on net-
zero technologies with partners aligned with the Paris
Agreement. These partnerships will drive technology
adoption, support sustainable investments, and
improve supply chain resilience.
They will also facilitate information exchange and help
EU industries access global clean energy markets.
Coordination will occur within the Platform, ensuring
alignment with existing agreements and bilateral
arrangements.

121
116.Strengthening Global Trade and Cooperation
in Net-Zero Technologies
The EU aims to diversify and expand
international trade and investments in net-zero
technologies through strategic partnerships
while upholding high social, labor, and
environmental standards. This will involve
collaboration with like-minded countries via
existing agreements or new engagements.
Additionally, stronger international cooperation
on research and innovation for net-zero
technologies will be pursued based on
reciprocity and mutual interests.

122
117.Monitoring Supply Risks in Net-Zero Technologies
To identify and mitigate supply risks, the EU must
continuously monitor key indicators such as market
trends, manufacturing capacities, innovation,
employment, skills, permitting times, and CO₂
injection capacities. However, the lack of high-
quality data hinders effective monitoring.
The Commission will prioritize net-zero technologies
based on their importance while improving data
availability. Collaboration with Eurostat will help
develop standardized reporting and statistical codes
for long-term monitoring.

123
118.Consultation and Transparency in Delegated Acts
When the Commission exercises its delegated
powers under this Regulation, it must conduct
thorough consultations, including expert-level
discussions, following the principles of the Inter-
institutional Agreement on Better Law-Making.
To ensure transparency and equal participation,
the European Parliament and the Council must
receive all relevant documents simultaneously
with Member States’ experts and have access to
Commission expert group meetings preparing
delegated acts.

124
119.State Aid Compliance
If any measures under this
Regulation qualify as State aid,
they must comply with Articles
107 and 108 of the Treaty on the
Functioning of European Union
(TFEU), ensuring they do not
distort competition within the
internal market.

125
120.Subsidiarity and Proportionality
The Regulation is necessary at the
Union level because its objectives
cannot be effectively achieved by
individual Member States alone.
It adheres to the principles of
subsidiarity and proportionality,
ensuring it does not exceed what is
required to meet its goals.

126
Naeem Shahzad

Net-Zero Emissions

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