Current European plans to promote hydrogen technologies: The Net Zero Industry Act

The plans for the use of green hydrogen and its production are known to be ambitious. While Germany, at least in the short to medium term, is primarily focussing on importing hydrogen from outside Europe, the plans at European level also envisage a significant ramp-up of production capacities within the EU. According to the European Commission, manufacturers of electrolysers in the EU should consolidate their technological leadership and actively contribute to shaping these markets. The RePowerEU plan envisages that 10 million tonnes of renewable hydrogen will be produced within the EU by 2030 and up to a further 10 million tonnes will be imported. The total capacity of installed electrolysis capacity in the EU should be at least 100 GW by 2030.

To accelerate the ramp-up of production capacities and become less dependent on technology produced abroad, the European Commission presented a proposal for the Net Zero Industry Act (NZIA) in March 2023. The aim of this regulation is to promote and accelerate the production of selected green technologies within the EU. In February 2024, a regulation text was adopted in the trilogue procedure, which now has to pass through the European Parliament and the Council of the European Union. Below we provide an overview of the key provisions of the NZIA, which may be of particular importance for hydrogen projects.

Net zero technologies & strategic projects

The NZIA lists a number of so-called "net zero technologies" that are to benefit from the simplification and acceleration measures of the regulation.

The following net-zero technologies are included in particular: 

  • Hydrogen technologies, in particular electrolysers & fuel cells
  • Photovoltaics & solar thermal energy
  • Onshore wind energy & renewable offshore energy
  • Batteries & storage technology
  • CO2 capture & storage
  • Heat pumps & geothermal energy
  • Network technologies
  • Sustainable biogas/biomethane

The NZIA also provides for the identification of so-called net-zero strategic projects. To this end, projects must fulfil certain criteria, such as being a technology for which the EU is currently more than 50% dependent on imports, making a substantial contribution to achieving the climate targets by 2030 or making a positive contribution to the net-zero industrial supply chain and having a positive impact on the workforce and their qualifications, among other things. As the criteria can be interpreted broadly, a further piece of legislation will be issued within eight months of the NZIA coming into force to provide guidance on interpretation. In addition, projects that are funded via the IPCEI programme or become part of the European Hydrogen Valleys or the Hydrogen Bank can be recognised as strategic projects upon application.

If a project is recognised as a strategic project, it should be given the status of the highest possible national importance and benefit from this in the approval process and spatial planning. Among other things, the overriding public interest is also recognised for strategic projects.

Acceleration of authorisation procedures

While efforts have long been underway in Germany to simplify and speed up the authorisation process for electrolysers (see our article on this here), the NZIA is now also set to provide concrete acceleration options from the European side.

Within six months of the NZIA coming into force, the Member States shall appoint contact persons who will be responsible for simplifying and coordinating the permitting procedures and who will serve as points of contact for applicants and interested parties. The submission of application documents and the implementation of the permitting procedures should be carried out completely digitally and via the responsible contact person.

The NZIA stipulates the following deadlines for the implementation and completion of permitting procedures.

  • Construction or expansion of a project 
    • with annual production capacity < 1 GW: 12 months (for strategic projects: 9 months)
    • with annual production capacity > 1 GW: 18 months (for strategic projects: 12 months)
  • If the production capacity cannot be measured in GW, a period of 18 months applies, or 12 months for strategic projects.

In exceptional cases, the deadlines may be extended to a limited extent, for example in the case of particularly complex procedures or projects that may pose risks to employees or the general public. 

After receipt of the application documents, the authority must confirm the completeness of the application documents or request missing documents within 45 days. If documents are subsequently submitted, the authority must confirm the completeness of the application documents and thus the start of the authorisation process within a further 30 days. In addition, the responsible contact person must draw up and publish a timetable for the permitting process.

The NZIA also contains various deadlines with regard to the environmental impact assessment:

  • Determination of the scope of the assessment: 45 days
  • Public consultation: 30 - 85 days
  • Official result of the review of the EIA, taking into account the results of public participation: 90 days

The NZIA also enables the establishment of so-called net-zero acceleration valleys. The aim is to locate various net-zero technology projects in clusters so that the administrative burden in particular can be reduced. This could have advantages, for example, with regard to overarching environmental impact assessments that apply to various projects.

Further provisions

The NZIA also contains specifications regarding procurement procedures and requirements for participation in auctions for renewable energies. The qualification and further training of employees is also to be promoted. The establishment of the so-called "Net Zero Europe Platform" is intended to support the exchange of information and experience. 

Finally, the NZIA will implement so-called net-zero regulatory sandboxes in which innovative technologies can be developed, tested and validated under real conditions.

Conclusion

Firstly, it remains to be seen when and in what form the NZIA will be adopted and come into force. If the NZIA is adopted in its current form, this would also be significant for German projects relating to - among other things - hydrogen technologies and (hopefully) achieve the desired acceleration and simplification of permitting procedures. However, it is also necessary for the German authorities and, in particular, the courts to be able to provide the necessary personnel, technical and professional capacities for faster permitting procedures. Experience has shown that both the authorities and the courts are often short of capacity. Nevertheless, it is to be welcomed that the NZIA, if adopted in this form, will create further acceleration and simplification options in the field of hydrogen technologies.

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