Eurelectric recommendations : Net-Zero Industry Act trilogues–4 column document

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KEY MESSAGES

  • Subject Matter (Art.1): The Net-Zero Industry Act can strengthen the EU’s open strategic autonomy, through a progressive, parallel reduction of value chains dependence and by maintaining the EU's competitive edge in established clean technologies. In this regard, we encourage negotiators to maintain the focus on net-zero end-products and establish non-binding technology-specific benchmarks.
  • Definitions (Art. 3a & 3b + Annex): Eurelectric welcomes the inclusion of clean and renewable electricity generation technologies among in the lists of strategic net-zero technologies. We consider the Council’s approach (2-lists in the body of the Regulation) to be particularly positive and call on policymakers to ensure equal treatment of carbon-free sources of generation, like renewables, hydropower and nuclear, which have a technology readiness above eight. Importantly, while we welcome the inclusion of grid technologies in the three proposals, we draw the attention to the need to give a more prominent role to distribution grid assets.
  • We encourage negotiators to clearly mention in Article 19 that its content does not apply to auctions for renewables, to avoid confusion in the application of the various provisions of the Regulation.
  • Auctions for deployment of RES (Art. 20):
    • Eurelectric welcomes the Council’s approach towards maintaining the weight of sustainability and resilience criteria between 15 and 30 percent. However, we encourage negotiators to consider these criteria separately and not be cumulative, considering their different purposes and challenges. Moreover, as rightfully included in the Parliament’s position, we encourage policymakers to develop technology specific non-price criteria (NPC). Lastly, for the detailed design of the tenders, Member States should be able to choose individually suitable measures from a catalogue of criteria predefined by the Commission. Devising no more than 3-5 measures and 1 objective per auction should be enabled to keep focus on the main qualitative issue in the target. This should be supported by clear guidance for bidders.
    • Retain and improve the derogation from the obligatory application of NPC in the event of disproportionate cost increases already included in the Commission's proposal. In this regard, Eurelectric encourages negotiators to: i. apply different derogation triggers per technology, ii. clarify the elements considered for the calculation of cost differences, as well as the application of this provision, iii. Consider higher and dynamic levels for the derogation threshold, that can be reviewed.
    • Eurelectric urges negotiators to retain the Parliaments provisions calling on Member States to adjust both their overall budgets allocated to RES auctions and the related maximum bid levels to accommodate the implementation of NPC. In addition, the final text must maintain the call to ensure that auctions include an inflation indexation mechanism, with the potential exclusion of negative bids.
  • Committee procedure (Art 34): A major risk around the introduction of NPCs are lack of objectivity and transparency in the assessment. Where NPC are used, they should be objective, quantifiable and assessed by an experts' jury.
  • Entry into force (Art.38) Eurelectric welcomes the progressive entry into force of the Regulation. In our view, the transition of national support mechanisms towards non-price criteria takes time. To allow authorities and project developers to prepare for the new requirements, the Regulation should include a transitional period of at least one year until the new requirements in Articles 19 and 20 become mandatory.
  • Last but not least, we would like to share our concern with regards to a potential priori disconnection between the list of strategic technologies and the possible access to EU funding – resulting from a strict interpretation of article 3b paragraph 3. This might hinder the effectiveness of the legislative architecture provided by the NZIA by excluding sources of financing that might crucially support the scaling-up of the EU manufacturing capacity.

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