The European Union (EU) has set a target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. By achieving this, the bloc will become the first climate-neutral continent by 2050. These targets have got now received a major boost in the form of a new law to increase EU’s green tech production.
As per the new rule, the bloc needs to produce 40% of its solar panels, wind turbines, heat pumps and other clean tech equipment. This will also help the European industry compete with US and Chinese rivals. The new law, called the Net Zero Industry Act (NZIA) will come into force next month or by early July once it has been signed by the presidents of the European Parliament and the Council and is published in the EU’s official journal.
This act is important because it accelerates the bloc’s push to becoming a global leader in cutting greenhouse gas emissions as well as in manufacturing the technology required to do so. Currently, Europe relies on China for these requirements, which is forecast to have 80% of global manufacturing capacity in solar power. The bloc also has concerns that the USD 369 billion of green subsidies in the US Inflation Reduction Act will entice European producers to relocate.
The European Union’s ambitious goals for reducing greenhouse gas emissions has led the bloc to set a deadline of 2030 for producing 40% of necessary green equipment. These products include a range of decarbonising technologies such as renewable energy, nuclear power, heat pumps, electrolysers, and carbon capture methods. Another target includes achieving 15% share of global production for these green technologies by 2040.
In a bid to achieve these objectives, the EU is currently discussing ways through which the processes of issuing permits for projects that improve the manufacturing in the EU area could be made more efficient. The proposal recommends that the target span should be roughly six to nine months with permit issuance occurring most frequently.
Moreover, the EU aims at promoting clean tech products, where public procurement will be used in decision-making and sustainability and resilience will be among the critical evaluation criteria. The bids will not only be judged based on the price but sustainability factors shall be accorded a 30% score. They might also identify resilience, specifically in relation to the idea of containing the dangerous dependence from a third country supplier, as a crucial factor.
Achieving these targets is quite commendable though the current solar energy or panel manufacturers from the EU provide less than 3% of panel deployments within the EU. On the other hand, the Wind Energy sector is comparatively more stable in the EU region, but the Chinese are eyeing this sector as an entry market for their products to compete with domestic manufacturers.