NZIA implementing decision on selection criteria for net-zero strategic projects adopted

Under the NZIA, net-zero technology manufacturing projects located within the EU that contribute to the objectives of the NZIA may be granted the status of 'net-zero strategic projects' and conferred specific benefits such as faster permitting procedures. The selection criteria for the designation of such projects are set out in Art. 13 of the NZIA, which also requires the Commission to adopt an implementing act to ensure uniform implementation of those criteria.

This article summarises the main features of the implementing decision adopting guidelines for the implementation of certain selection criteria for net-zero strategic projects.

What do I need to know?

To be granted the net-zero strategic project status, net-zero technology manufacturing projects must not only contribute to the objectives of the NZIA, but also fulfil at least one of the criteria set out in Art. 13(1) of the NZIA. As required by Art. 13(2) of the NZIA, the Commission’s implementing decision introduces specific guidelines to assess whether added manufacturing capacity concerns first-of-a-kind or best available net-zero technology manufacturing capacity, and whether the additional manufacturing capacity can be considered to be significant:

• First-of-a-kind manufacturing facilities feature an innovation capability with regard to the manufacturing process of net-zero technology that is not yet substantially present or planned to be built in the EU. This means that a facility using an innovative material for the first time in the EU could qualify as first-of-a-kind, even if that material has been tested in pilot facilities within the EU. Parallel projects occurring at the same time may also be recognised under this classification.
• Best available net-zero technology manufacturing capacity indicates the most effective and advanced activities and operational methods developed, with an emphasis on the technological efficiency and innovation of the manufacturing practices. Alternatively, best available net-zero technology manufacturing may be interpreted as the project’s ability to manufacture the best available net-zero technology products currently available on the internal market.
• To determine whether manufacturing capacity can be considered as significant, Member States may use different methods, the application of which depends on, inter alia, whether the annual planned production capacity of the project can be measured in gigawatt or not. Member States may also consider whether the project is in line with the EU’s strategic priorities, supply chain resilience and environmental sustainability.

Apart from these mandatory contents, the decision gives guidance on other selection criteria such as improved environmental sustainability and the 50% import dependency threshold.

In assessing whether a project meets the objectives of the NZIA, Member States may consider whether the project is in line with the EU’s long-term climate and energy goals, including its impact on the resilience and sustainability of net-zero supply chains. To ensure uniform implementation of the criteria, applications of net-zero technology manufacturing projects to be recognised as net-zero strategic projects shall be submitted to the relevant Member State using the application form provided on the Commission’s official website. It is to be expected that an increasing number of Member States will follow the strategic projects application process described there.

What should I do next?

Developers of net-zero technology manufacturing projects should check whether their projects are eligible to qualify as net-zero strategic projects in accordance with the recent implementing decision. As the case may be, they should prepare applications for submission via the Commission website once available for the relevant jurisdiction.