The European Commission has officially adopted the secondary legislation of the Net-Zero Industry Act (NZIA), marking a new phase in the development of Europe’s clean energy sector. The act establishes a comprehensive policy framework with three core components.
Firstly, the legislation sets binding localization targets. It mandates that by 2026, EU member states must ensure a fixed proportion of their annual deployment needs for new energy equipment—such as photovoltaic (PV) modules, batteries, and heat pumps—are sourced from domestic manufacturing. This measure aims to reduce reliance on imports and enhance the self-sufficiency of local industries.
Secondly, it introduces a “non-price criteria” evaluation system. Member states are required to allocate 30% of capacity (approximately 6 GW annually) in renewable energy project tenders starting from late 2025 to projects that meet criteria including “supply chain resilience, sustainability contributions, cybersecurity, and responsible business conduct.” As only EU-produced equipment can comply with these requirements, the rule effectively secures market shares for domestic firms.
Thirdly, the act establishes a fast-track approval process for “strategic projects” and a “Net-Zero Acceleration Valley” mechanism. By streamlining approval procedures, it aims to reduce project development cycles by 50% and includes energy storage projects in accelerated approvals for the first time. Additionally, the legislation provides a detailed list of technological components eligible for these provisions, offering clear operational guidance to industry players.
The European Commission highlights that the EU’s clean technology supply chains currently face excessive dependency risks, particularly in the PV sector, where 90% of modules are imported, with 80% originating from a single country. The act seeks to rebuild Europe’s manufacturing base and reduce supply chain vulnerabilities by setting localization quotas and preferential tendering policies.
On one hand, European manufacturers such as REC and Meyer Burger will directly benefit from guaranteed 40% market shares and potential tender price premiums. On the other hand, Chinese PV firms relying heavily on exports will face altered market access conditions, particularly in competing for the 30% government tender-linked market share. SolarPower Europe stresses the urgency of implementing these support measures, citing the precarious state of Europe’s solar manufacturing sector, and calls for dedicated financing mechanisms to bolster industrial growth. Some EU member states have already taken action: France offers a 15% premium for domestic products through its “Pacte solaire” plan, while Spain provides financial support via the “PERTE” program, setting important precedents for the act’s full implementation.
However, the act’s implementation faces multiple challenges. The primary issue is the production capacity gap—current annual European PV capacity stands at around 10 GW, falling significantly short of the 2026 localization target of 16 GW. Cost competitiveness also poses a hurdle, with European-made PV modules typically priced 30–50% higher than imports, potentially driving up renewable energy development costs and impeding the energy transition. Additionally, the act’s geographic protection clauses may spark controversies under international trade rules. Nonetheless, the EU has outlined adjustment plans, including revising the NZIA through ordinary legislative procedures in 2027 and mapping out development pathways beyond 2030.
