The European Union, in its resolute pursuit of energy transition and industrial sovereignty, is implementing the Net-Zero Industry Act (NZIA), an ambitious initiative adopted in June 2024 as part of the Green Deal Industrial Plan. This legislation aims to strengthen the production of clean technologies in Europe while responding to the U.S. Inflation Reduction Act (IRA).
The NZIA sets clear objectives: meeting 40% of Europe’s clean technology needs by 2030 and accounting for 15% of global production by 2040. Key priorities include sectors such as hydrogen, photovoltaic solar energy, and carbon capture technologies. This initiative is part of a broader strategy to enhance industrial competitiveness, accelerate the energy transition, and significantly reduce carbon emissions.
To facilitate this transformation, the NZIA introduces a simplified procedure for approving industrial projects related to Net-Zero technologies. Timelines have been drastically reduced: 12 months for projects under 1 GW and 18 months for those exceeding this capacity.
A national ambition: the French Solar Pact
France is actively investing in the development of its solar energy capacity. Between 2020 and 2024, solar installations grew from 2 GW to 3.3 GW, but the country remains far from its target of 6 GW of annual installations set by the government.
To achieve this goal, the French Solar Pact calls for enhanced mobilization of public and private resources. Starting in 2025, ESG (Environmental, Social, Governance) criteria will be introduced into public procurement processes, with an incentive bonus for projects using solar panels manufactured in Europe. A strategic tax credit introduced in March 2024 is expected to generate €23 billion in direct investments and create 40,000 jobs in the French photovoltaic sector.
Greening public procurement
From 2025, public contracts exceeding €25 million will be subject to strict requirements: no products comprising more than 50% from third countries will be allowed. This measure aims to reduce reliance on foreign imports while stimulating local production.
However, Europe’s current limited production capacity may pose challenges. Strengthening the competitiveness of local manufacturers and accelerating the industrial production of solar panels will be critical to avoid supply chain disruptions.
Financial challenges
While the NZIA encourages private investment and mobilizes existing public funds, financing remains a major hurdle. Current European resources, such as the Horizon Europe program and the Just Transition Mechanism, appear insufficient compared to the massive investments made by the United States through the IRA.
Nevertheless, a potential dismantling of the IRA under a future U.S. administration could provide Europe with a window of opportunity to strengthen its capabilities in a redefined international context.
Building energy sovereignty
European solar industry players are taking action to address these challenges. Their commitments include promoting a solar panel performance index called InduScore, signing long-term contracts to secure supply chains, and deploying at least 30% InduScore-certified panels by 2025.
However, China’s dominance in the global photovoltaic market remains a significant obstacle. With industrial capacities far exceeding Europe’s needs, China continues to pose a major challenge to European energy sovereignty.
Conclusion: ambitions to fulfill
The Net-Zero Industry Act and the French Solar Pact are essential tools for enabling Europe to meet its climate and energy objectives. Yet, several challenges remain: securing sustainable funding, reducing dependence on imports, and accelerating local production.
The success of these initiatives will require close coordination between European institutions, national governments, and private stakeholders. In France, the Solar Pact represents a unique opportunity to position the country as a European leader in solar energy. To achieve this, it will take an ambitious vision, a stable regulatory framework, and adequate financial resources.
Article written by Benoit Frayer