Industry Bills Acceptance Praise, Yet Uncertainties Persist on Net-Zero Act and Critical Minerals Act

The European Union is taking significant strides towards a greener future with the introduction of two key pieces of legislation: the Net-Zero Industry Act (NZIA) and the Critical Raw Materials Act (CRMA).

The NZIA identifies batteries as a priority sector, aiming to address gaps in skills and human resources that are slowing the transition to net-zero. It also proposes repurposing existing schemes for financing net-zero technologies. However, the effectiveness of the focus on net-zero technologies and the overall coherence of the proposals with Europe's Green Deal plans remains uncertain.

Meanwhile, the CRMA aims to strengthen Europe's material supply chain for the electromobility industry. It includes binding targets for increasing domestic capacities, but these may be subject to watering down in the legislative process. The act also proposes reducing burdens in permitting procedures but may increase burdens in reporting and assessment procedures. The effectiveness of the sectors identified in the NZIA in accessing essential financing is also uncertain.

The international aspect of both acts highlights the importance of third country sources of critical and strategic raw materials. The EU aims to advance the Raw Materials Club with resource-rich countries, but the specific countries targeted have not been explicitly named in the accessible documents. The initiative focuses on coordination with selected critical resource countries to build stockpiles and reduce dependencies, particularly in the face of geopolitical risks and competition from China.

The NZIA sets enabling factors to improve conditions for investment in net-zero technologies. It prioritizes Net-Zero Strategic Projects for development. The effectiveness of these projects in offsetting the financial leverage and investment leakage posed by the US Inflation Reduction Act (IRA) will be a key measure of the CRMA's success.

More work is needed on the concept of establishing a Raw Materials Club. The ACEA welcomes progress with the United States on the Raw Materials Club concept. Uncertainty remains about the effectiveness of the proposals in the NZIA, but the importance of addressing the challenges posed by the transition to net-zero is clear.

In conclusion, the NZIA and CRMA represent significant steps towards a more sustainable future for Europe. However, the effectiveness of these acts will depend on their successful implementation and the ability to navigate the complexities of international cooperation and financing.

Industry Bills Acceptance Praise, Yet Uncertainties Persist on Net-Zero Act and Critical Minerals Act