“Rebooting the European Union’s Net Zero Industry Act” has been authored by Simone Tagliapietra, Reinhilde Veugelers and Jeromin Zettelmeyer of Bruegel.

In March 2023, the European Commission published a legislative proposal for an EU response to the US Inflation Reduction Act: the Net Zero Industry Act (NZIA). According to this policy brief, it is an unconvincing policy proposal, both for what is in it and for what is not in it. The European Parliament and EU countries in the Council of the EU should reboot the proposal and refocus its objectives, sharpening its limited instruments, improving its governance, and adding financial incentives to ensure implementation. In parallel, the EU should develop a broader green industrial policy strategy that leverages the single market in a credible manner, building a solid new governance framework and a new EU-level funding approach.

This policy brief focuses on the NZIA and describes and reviews the key elements of the proposal. It also points out obstacles to cleantech reform that the NZIA does not address, in part because these obstacles relate to single market and EU governance failures that require a broader solution. Accordingly, the policy recommendations include both a proposal to revamp the NZIA and a vision for an EU green industrial policy beyond the NZIA.

Access the brief here