The latest reinforcement of European Industrial Policy

Recently, a number of industrial policy developments have taken place in the European Union. 

Driven by the international context, and also in order to meet the deployment previsions, two dossiers on solar photovoltaic industrial development in Europe stand out. Together, these files are meant to give a boost to the production capacity of solar systems in the EU.

The Net-Zero Industry Act and the Critical Raw Materials Act are two proposals for regulations announced by the European Commission on 16 March, which will follow the ordinary legislative procedure, i.e. after the Commission's proposal, they will be negotiated in the Parliament and the Council for subsequent voting and submission to the trialogue phase. 

So what are the main highlights for the solar industry?

For the first time, State Aid can be applied to building solar factories, with a section – completely new in EU State Aid law – addressing the productive investment gap in sectors strategic for the transition towards a net-zero economy. The rules, however, are heavily dependent on location in Europe and fall short of supporting operational expenditure (energy cost).

The Net Zero Industry Act published on 16 March is a proposal from the EU Commission for a new EU regulation to create the regulatory environment to scale up manufacturing of clean technologies in the EU. The Act sets production targets for clean technologies by 2030, another first in EU law. For solar PV, the goal is to reach at least 30 GW of capacity across the supply chain by 2030. 

The Act improves the regulatory environment for solar factories on permitting and access to finance, but comes with new layers of administrative burden (applying for Net Zero Strategic Projects, creating a new Net Zero Europe Platform, etc.). 

The Act develops a set of non-price criteria categories, including on sustainability, in line with SolarPower Europe's position, but also on security of supply for technologies that have a dependency of more than 65% on one third country supplier. This certainly is the most contentious provision of the Commission's proposal. 

The Critical Raw Materials Act sets new EU targets on extraction, refining, recycling and diversifying for 2030, and creates a list of Strategic and Critical Raw Materials. This is a positive for European solar as key materials are included (boron, copper, germanium, silicon metal). We would like to see silver included, too.

Members of SolarPower Europe can access our full analysis for a better understanding of such proposals. Get in touch with our policy team for more details!