Scaling Up for Net Zero: What the EU’s Net Zero Industry Act means for business

In this article, we outline the scope of the Net Zero Industry Act, highlight its key regulatory and procurement measures, and explain what businesses should consider as they plan for its impact.

The European Union (EU) continues to accelerate its transition to a climate neutral economy, with the Net Zero Industry Act (NZIA) considered a central legislative component of this initiative. Emerging from the Green Deal Industrial Plan and the broader European Green Deal, the NZIA is designed to scale up the EU’s capacity to manufacture the clean technologies needed to achieve climate neutrality by 2050.

The NZIA, which entered into force on 29 June 2024, seeks to strengthen Europe’s industrial competitiveness, reduce reliance on third country supply chains, and support the EU’s binding climate commitments – namely, reducing greenhouse gas emissions by at least 55% by 2030 and reaching net zero by 2050. The NZIA sets an ambitious objective: for the EU to meet at least 40% of its annual deployment needs for net zero technologies by 2030 and reach 15% of global production by 2040, unless that would exceed what the EU itself needs to achieve its 2040 climate and energy targets.

To deliver on these goals, the NZIA establishes a simplified regulatory environment and targeted policy measures designed to attract investment, expand manufacturing capacity and support the scale‑up of strategic technologies within the EU.

What does the NZIA cover?

The net zero technologies listed below are within scope of the NZIA.  Final products, specific components or specific machinery primarily used for the production of these technologies are all specifically captured. A list of final products and specific components considered to be primarily used for the production of net zero technologies can be found in the Annex to Delegated Regulation (EU) 2025/1463. This replaces and updates the list set out in the Annex to the NZIA.

• Solar photovoltaic and solar thermal technologies
• Onshore and offshore renewable technologies
• Battery and energy storage technologies
• Heat pumps and geothermal energy technologies
• Hydrogen technologies, including electrolysers and fuel cells
• Sustainable biogas/biomethane technologies
• Carbon capture and storage technologies
• Grid technologies, including smart and fast charging for electric vehicles
• Nuclear fission energy technologies, including nuclear fuel cycle technologies
• Sustainable alternative fuels technologies
• Hydropower technologies
• Other renewable energy technologies
• Energy system related energy efficiency technologies, including heat grid technologies
• Renewable fuels of non-biological origin technologies
• Biotech climate and energy solutions
• Other transformative industrial technologies for decarbonisation
• CO₂ transport and utilisation technologies
• Wind propulsion and electric propulsion technologies for transport
• Other nuclear technologies

What are the key elements of the NZIA?

With increasing the EU’s resilience and security of supply in the field of net zero technologies being one of the objectives of the NZIA, it is unsurprising that identifying and supporting the scale up of the manufacturing capacity of net zero technologies and their supply chains is a key area of focus. The NZIA introduces a set of enabling conditions designed to accelerate the development and scaling up of net zero technology manufacturing across the EU. It does this by defining categories of eligible projects and by streamlining the regulatory, permitting, and financing environment needed to support them. 

To encourage demand for sustainable and resilient net zero technologies, provisions have been included in the NZIA introducing minimum mandatory requirements and award criteria to assess sustainability and resilience contributions in public procurement processes. An overview of the key provisions is set out below.

• Net zero strategic projects: Net zero manufacturing projects, CO₂ capture projects, CO₂ storage projects or CO₂ transport infrastructure projects deemed essential for enhancing the EU’s resilience and competitiveness may be designated as “net zero strategic projects.” These benefit from priority national status, accelerated permitting, and access to financing advice.
• Simplified permitting: To address delays that often hinder industrial development, EU member states must establish one stop shops to coordinate permitting processes. Time limits of 12-18 months for standard manufacturing projects and 9-12 months for strategic projects will apply.
• CO₂ storage capacity: The NZIA introduces measures to help the EU achieve a CO₂ injection capacity of at least 50m tonnes per year by 2030, with obligations placed on certain EU oil and gas producers to contribute to this target. Delegated Regulation (EU) 2025/1477 and Commission Decision (EU) 2025/1479 provide further details that identify in scope producers and those that are exempt as well as setting out the methodology for calculating individual contributions and associated reporting obligations. In addition, EU member states must report annually on carbon capture, storage and transport projects and publish geological data on potential storage sites.
• Renewable energy auctions: When designing auctions for the deployment of energy from renewable sources, member states must include the following (specified in Implementing Regulation (EU) 2025/1176):
  • pre-qualification criteria on responsible business conduct, cybersecurity and data security, and the ability to deliver projects fully and on time
  • pre-qualification or award criteria to assess the auction’s sustainability and resilience contribution
• Mandatory inclusion of additional public tender elements: Contracting authorities must apply minimum environmental sustainability requirements (set out in Implementing Regulation (EU) 2026/718) and include one of three additional elements in public tender procedures for specified net zero technologies:
  • a special condition relating to social or employment related considerations
  • a requirement to demonstrate compliance with applicable cybersecurity rules
  • a contractual obligation for an appropriate charge if the net zero technology is not delivered on time
• Resilience contribution in tender assessment: The NZIA uniquely requires that a public tender’s “resilience contribution” be taken into account. Where the Commission identifies a dependency on a third country, no more than 50% of the value of the technology or its main components may be sourced from that country.
• Regulatory sandboxes: To support innovation, EU member states may establish regulatory sandboxes to test novel net‑zero technologies under controlled conditions, with priority access for SMEs.
• Skills development: Recognising workforce shortages, the NZIA establishes European Net Zero Industry Academies to deliver large‑scale upskilling and reskilling programmes, supported by EU funding mechanisms.
• Financing platforms: The NZIA establishes the Net‑Zero Europe Platform to coordinate implementation of the Act by monitoring progress, ensuring consistent application across the EU, and supporting financing and strategic projects. It also streamlines permitting, improves market access, develops skills, and aligns regulatory sandboxes and partnerships.

In Ireland, implementation of the NZIA is being aligned with broader national objectives to enhance competitiveness, sustainability and industrial innovation. The Department of Enterprise, Trade and Employment (DETE) has indicated that it intends to use the Act to accelerate industrial decarbonisation, support delivery of the Offshore Wind Industrial Strategy, and stimulate growth in green manufacturing and supply chains. In 2025, the Department of Climate, Energy and the Environment (DCEE) consulted on the implementation of Article 26 of the NZIA, which applies in respect of designing auctions for the deployment of energy from renewable sources. This consultation focused on integrating Article 26 into Ireland’s Renewable Electricity Support Scheme (RESS) auction framework. In its Initial Decision and Consultation Response Notice, the DCEE confirmed that Article 26 will be fully incorporated into RESS from RESS 6 onwards.

In addition, the DCEE and DETE have jointly established a Carbon Capture, Utilisation and Storage (CCUS) Taskforce, one of whose central objectives is to ensure that Ireland’s CCUS policy development and deployment pathways align with the NZIA’s aims, obligations and timelines relating to carbon capture, transport and storage.

Key takeaways

The NZIA forms part of the wider Clean Industrial Deal, alongside complementary initiatives such as the Critical Raw Materials Act, which seeks to ensure the EU’s access to a secure and sustainable supply of critical raw materials, and the proposed Industrial Accelerator Act, aimed at further streamlining industrial permitting and scaling up clean technologies. Within this policy landscape, the NZIA represents a significant shift in how net zero technology manufacturing, procurement and strategic investment will operate across the EU in the coming years.

For businesses active in, or considering entry into, the net zero technology space, the NZIA brings both opportunity and obligation. Accelerated permitting, routes to strategic project designation and enhanced support for innovation sit alongside more demanding sustainability, resilience and supply chain requirements in public tenders. Now is the time for businesses to assess how these changes may affect their operations, investment plans and procurement strategies, and to position themselves to take full advantage of the opportunities associated with the clean energy transition.

For further information in relation to this topic, please contact Jill Shaw, ESG & Sustainability Lead, Anna-Marie Curran, Partner, EU, Competition & Procurement, Ross Moore, Partner, Energy, Infrastructure and Natural Resources, Erin Ward, Solicitor, or any other member of the ESG & Sustainability Team.

Date published: 31 March 2026