EXPLANATORY MEMORANDUM

1.CONTEXT OF THE DELEGATED ACT

On 29 June 2024, Regulation (EU) 2024/1735 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (the Net-Zero Industry Act or NZIA) entered into force. This regulation establishes a framework to ensure the EU’s access to a secure and sustainable supply of net-zero technologies by scaling up their manufacturing capacity and supply chains.

To support its implementation, Regulation (EU) 2024/1735 empowers the European Commission to draft a delegated act to amend the Annex, which lists the final products and specific components that are considered to be primarily used for the production of net-zero technologies. The goal of the present delegated regulation is to amend the Annex and to identify, for each sub-category of net-zero technologies, the final products and the components that are primarily used for these technologies.

All components that are listed in the present delegated regulation are considered to be primarily used for the production of net-zero technology final products. The relevant provisions in Regulation (EU) 2024/1735 and particularly the provisions in Chapter II (‘Enabling conditions for net-zero technology manufacturing’) therefore apply to them. Specific components not included in the present delegated regulation may still fall within the scope of Regulation (EU) 2024/1735 if, on the basis of evidence provided to a national competent authority, the project promoter can prove (for example, via market studies or off-take agreements) that the specific components are primarily used for the production of net-zero technologies.

As required by Article 46(7) of Regulation (EU) 2024/1735, the list of the primarily used components set out in the present delegated regulation is based on a comprehensive assessment and on a methodological analysis of the supply chains, taking into particular account commercial availability, the appropriate level of detail and technological developments. The assessment aimed at identifying, to the extent possible, the final products and specific components that are manufactured and traded by a company, that are essential for the production of net-zero technologies, and that can therefore reasonably be considered to be “always primarily used”. The assessment is provided in Staff Working Document SWD(yyyy) xxx, which outlines the methodology that has been set up on the basis of the relevant aspects of Regulation (EU) 2024/1735. In particular, the methodology sets out some practical ways to implement the criteria outlined in Regulation (EU) 2024/1735, such as ‘specific’, ‘commercial availability’, ‘primarily used’ and ‘essential’. The methodology is then applied to all net-zero technologies in order to identify final products and specific essential components that can reasonably be considered to be primarily used for net-zero technologies.

2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT

The decision to amend the Annex to Regulation (EU) 2024/1735 in order to identify, for the net-zero technologies, final products and the components that are primarily used for these technologies has been subject to a thorough consultation process. The Commission consulted in-house experts, stakeholders from net-zero technologies sectors and Member States at various stages of the preparation of the delegated act. In particular, the Commission drafted the present delegated regulation in consultation with the Expert Group on Net-Zero Technologies and Supply Chains (E03968).

During the Expert Group’s first meeting, the Commission presented the methodology for selecting the components and explained its application using three examples: solar photovoltaic, ocean energy and geothermal energy technologies. Online informal meetings were also held with Member States, allowing more technical discussions on net-zero technologies. Following this first set of meetings, the methodology and its initial application were amended to take into consideration the positions of the Member States.

3.LEGAL ELEMENTS OF THE DELEGATED ACT

Article 46(7) of Regulation (EU) 2024/1735 empowers the Commission to adopt a delegated act in accordance with Article 44 to amend the Annex based on the list of net-zero technologies in Article 4 of Regulation (EU) 2024/1735, in order to identify the sub-categories within net-zero technologies and the list of specific components used for those technologies.

The present delegated regulation includes two articles: an article to amend the Annex and an article containing the entry into force provisions.

The Annex provides, for each net-zero technology, the updated sub-categories and a list of final products and specific components used for the net-zero technologies.

COMMISSION DELEGATED REGULATION (EU) …/...

of XXX

amending Regulation (EU) 2024/1735 of the European Parliament and of the Council as regards the identification of sub-categories within net-zero technologies and the list of specific components used for those technologies

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724  1 and in particular Article 46(7) thereof,

Whereas:

(1)Regulation (EU) 2024/1735 established a legal framework that strengthens the Union’s resilience and security of supply in the field of net-zero technologies, by enhancing the Union’s capacity for manufacturing, deployment and innovation in the field of net-zero technologies.

(2)The Annex to Regulation (EU) 2024/1735 sets out in a non-exhaustive manner a list of final products and specific components considered to be primarily used for the production of net-zero technologies.

(3)Specific components and specific machinery not included in that list may still fall within the scope of Regulation (EU) 2024/1735 if the project promoter can provide evidence, for example market studies or off-take agreements, to a national competent authority showing that the specific components or machinery are primarily used for the production of net-zero technologies.

(4)A comprehensive assessment, based on a methodological analysis of the supply chains of the net-zero technologies, has been carried out. That assessment took into particular account the commercial availability of the components, the appropriate level of detail and developments in technology.

(5)To identify specific components considered to be primarily used for the production of net-zero technologies, four criteria were put forward: specific, commercial availability, always primarily used and essential. As a first step, for each net-zero technologies and when necessary, sub-categories were further defined using the criteria listed above and the eventual definitions of these net-zero technologies in Regulation (EU) 2024/1735. As a second step, for each sub-category an analysis of the technology is conducted to identify the components that fulfil the criteria listed above. Components fulfilling the criteria are considered as primarily used for the production of net-zero technologies and should be listed in the Annex of Regulation (EU) 2024/1735.

(6)Regulation (EU) 2024/1735 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

The Annex to Regulation (EU) 2024/1735 is replaced by the text in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

   For the Commission

   The President
   […]


ANNEX

List of final products and specific components considered to be primarily used for the production of net-zero technologies.

Sub-categories of net-zero technologies

Final products

Primarily used components

Solar technologies

Photovoltaic (PV) technologies

-Solar photovoltaic systems 

-PV grade polysilicon

-PV grade silicon ingots or equivalent 1

-PV wafers or equivalent1

-PV cells or equivalent1

-Solar glass

-PV encapsulants

-PV ribbons

-PV connectors

-PV junction boxes

-PV modules

-PV inverters

-PV trackers for large-scale plants 

Solar thermal electric technologies

-Concentrated solar power (CSP) plants

-CSP reflectors

-CSP trackers 

-CSP receivers (point or line) 

Solar thermal technologies

-Solar thermal systems

-Solar thermal collectors (including flat-plates, evacuated tubes, concentrating systems and air collectors) 

-Solar thermal absorbers 

-Solar glass

-Solar thermal trackers

Other solar technologies

Onshore wind and offshore renewable technologies

Onshore wind technologies

-Onshore wind turbines 

-Nacelles (assembly)

-Yaw systems

-Pitch systems

-Rotor hubs

-Pitch bearings 

-Yaw bearings

-Main bearings

-Direct drive generators / drivetrains and gearbox drivetrains

-Permanent magnets of wind turbines

-Gearboxes of wind turbines

-Blades

-Towers

Offshore wind technologies

-Offshore wind turbines

-Nacelles (assembly)

-Yaw systems

-Pitch systems

-Rotor hubs

-Pitch bearings 

-Yaw bearings 

-Main bearings

-Direct drive generators / drivetrains and gearbox drivetrains

-Permanent magnets of wind turbines

-Gearboxes of wind turbines

-Blades

-Towers

-Foundations / floaters (for offshore wind)

Other offshore renewable technologies

-Tidal stream energy technologies

-Wave energy technologies

Battery and energy storage technologies

Battery technologies

-Battery packs 

-Battery modules

-Battery packs

-Battery modules

-Battery cells

-Cathode active materials

-Anode active materials

-Electrolytes

-Separators

-Binders

-Current collectors (including thin copper and aluminium foils)

-Battery Management Systems (BMS)

-Battery Thermal Management Systems (BTMS)

Energy storage technologies

Electrochemical storage technologies

-Ultracapacitors / supercapacitors

-Redox flow energy storage

-Electrolytes

-Separators

-Collectors

-Electrode plates

Gravitational storage technologies

-Pumped hydro storage

-Reversible hydro turbines and pump runners

-Distributors with adjustable / guide vanes

Thermal energy storage technologies

-Thermal energy storage plants

-Sensible heat storage and latent heat storage mediums (including phase-change materials and molten salts)

Compressed/liquefied gas energy storage technologies

Heat pumps and geothermal energy technologies

Heat pump technologies

-Heat pumps

-Heat pumps 

-Four-way valves

-Scroll compressors

Geothermal energy technologies

-Geothermal power plants

-Geothermal direct use systems

Hydrogen technologies

Electrolysers

-Alkaline electrolysers (AEL)

-Stacks

-Separators (diaphragm or membranes tailored for water electrolysis)

-Bipolar plates

-Electrodes

-Frames

-Gaskets / sealants

-Proton exchange membrane electrolysers (PEMEL)

-Stacks

-Membrane electrode assemblies (3-layer) / catalyst coated membranes 

-Porous transport layers / gas diffusion layers

-Bipolar plates

-Gaskets / sealants

-Anion exchange membrane electrolysers (AEMEL)

-Stacks

-Membrane electrode assemblies (3-layer) / catalyst coated membranes 

-Porous transport layers / gas diffusion layers

-Bipolar plates

-Gaskets / sealants

-Solid-oxide electrolysers (SOEL)

-Stacks

-Electrolytes & electrodes

-High-temperature gaskets / sealings

-Interconnectors

-Meshes

Hydrogen fuel cells

-Proton exchange membrane fuel cells (PEMFC)

-Stacks

-Membrane electrode assemblies (3‑layer) / catalyst coated membranes 

-Porous transport layers / gas diffusion layers

-Bipolar plates

-Gaskets / sealants

-Solid-oxide fuel cells (SOFC)

-Stacks

-Electrolytes and electrodes

-High-temperature gaskets / sealings

-Interconnectors

-Meshes

Other hydrogen technologies

-Hydrogen distribution

-Hydrogen storage

-Onboard hydrogen storage

-Hydrogen on-tank valves

-Stationary (high-pressure) storage tanks

-Hydrogen compressors

Sustainable biogas and biomethane technologies

Sustainable biogas technologies

-Sustainable biogas plants

-Anaerobic digesters / fermentation tanks

-Enzymes and microorganisms for sustainable biogas production

-Catalysts for sustainable biogas production

Sustainable bio-methane technologies

-Sustainable biomethane plants

-Anaerobic digesters / fermentation tanks

-Enzymes and microorganisms for sustainable biomethane production

-Biomethane upgrading units

-Catalysts for sustainable biomethane production

CCS technologies

Carbon capture technologies

-Absorption capture

-Adsorption capture

-Membranes capture

-Solid cycles capture

-Cryogenics capture

-Direct air capture

Carbon storage technologies

Electricity grid technologies

Electricity grid technologies

-Onshore substations 

-Offshore substations

-Cables and lines for electricity transmission and electricity distribution (overhead lines, underground and undersea cables, including HVDC and HVAC) 

-Switchgears

-Circuit breakers

-Protection relays

-Power transformers

-Disconnectors

-Insulators

-Surge arrestors

-Capacitors

-Reactors

-Busbar systems

-Electric cabinets 

-Offshore substations

-Electricity transmission and distribution towers

-Electricity transmission and distribution towers

-Electrical conductors (including advanced conductors and high-temperature superconductors)

-Insulators

-Surge arrestors

-Cables and lines for electricity transmission and electricity distribution (overhead lines, underground and undersea cables, including HVDC and HVAC)

-Cables and lines for electricity transmission and electricity distribution (overhead lines, underground and undersea cables, including HVDC and HVAC)  

-Electrical conductors (including advanced conductors and high-temperature superconductors)

-Insulators

-Power transformers

-Power transformers

-Transformer cores

-Transformer windings 

-Transformer tap changers

Electric charging technologies for transport

-Electric vehicle supply equipment

-Electric road systems 2

-Shore-side electricity supply equipment

-Overhead contact lines

-Electric vehicle supply equipment

-Electric vehicle charging connectors

-Shore-side electricity supply equipment

Technologies to digitalise the grid and other electricity grid technologies

-High- and medium-voltage power electronics equipment and components (including DC technology) 

-Flexible alternating current transmission system (FACTS) technologies

-Smart meters / advanced metering infrastructures

-High- and medium-voltage power electronics equipment and components (including DC technology)

-Flexible alternating current transmission system (FACTS) technologies

-Substation automation systems

-Smart meters / advanced metering infrastructures

Nuclear fission energy technologies

Nuclear fission energy technologies

-Nuclear fission power plants

-Control rods

-Control rod drive mechanisms

-Fuel elements

-Reactor (pressure) vessels

-Reactor internals

-Coolant/moderator and related purification systems

-Pressurisers

-Reactor coolant pumps / gas circulators

-Primary piping 

-Steam generators

-Nuclear heat exchangers

-Secondary system components

-Safety systems

-Instrumentation and control systems

-Refuelling machines

Nuclear fuel cycle technologies

-Nuclear fuel cycles

-Centrifuges

-Gas handling and flow control systems

-Chemical processing equipment

-Waste vitrification equipment

-Storage and disposal cylinders and casks

Sustainable alternative fuels technologies

Sustainable alternative fuels (SAF) technologies

-SAF plants

-Catalysts for SAF production

-Enzymes and microorganisms for SAF production

-Thermochemical, chemical and biochemical/biological reactors to convert biomass into bio-intermediates and/or syngas

-Reactors and post-treatment units to convert bio-intermediates and/or syngas into SAF

Hydropower technologies

Hydropower technologies

-Hydro turbine systems

-Hydro turbine runners

-Distributor with adjustable / guide vanes

Other renewable energy technologies

Osmotic energy technologies

Ambient energy technologies (other than heat pumps)

Biomass technologies

Landfill gas technologies

Sewage treatment plant gas technologies

Other renewable energy technologies

Energy system-related energy efficiency technologies

Energy system-related energy efficiency technologies

-Energy management systems (EMS)

-Building automation systems (BAS)

-Automated demand response (ADR) 

-Variable speed drives 

-Energy management systems (EMS)

-Building automation systems (BAS)

-Automated demand response (ADR) 

-Variable speed drives 

Heat and cold grid technologies

-Heating and cooling distribution system pipework

-Pipe fitters and couplers

Other energy system-related energy efficiency technologies

Renewable fuels of non-biological origin

Renewable fuels of non-biological origin (RFNBO) technologies

-RFNBO plants

-Reactors to convert H2 and CO2 into syngas or alcohols

-Reactors to convert syngas or alcohols into RFNBOs

-Catalysts for RFNBO production

Biotech climate and energy solutions

Biotech climate and energy solutions

-Microorganisms (such as bacteria, yeasts, microalgae, fungi, microbial strains and methanogens) that are used to pretreat and convert feedstock into biofuels, bio-based chemicals, bio-based materials and bio-based products

-Enzymes (such as amylase and cellulase) that are used to pretreat and convert feedstock into biofuels, bio-based chemicals, bio-based materials and bio-based products

-Microorganisms (such as bacteria, yeasts, microalgae, fungi, microbial strains and methanogens) that are used to pretreat and convert feedstock into biofuels, bio-based chemicals, bio-based materials and bio-based products

-Enzymes (such as amylase and cellulase) that are used to pretreat and convert feedstock into biofuels, bio-based chemicals, bio-based materials and bio-based products

Transformative industrial technologies for decarbonisation

Transformative industrial technologies for decarbonisation

-Electric arc furnaces

-Hydrogen-ready direct-reduced iron shaft furnaces

-Submerged arc furnaces

-Open slag bath furnaces

-Flash calciners

-Industrial electric boilers

-Industrial induction heaters / furnaces 3

-Industrial infrared heaters / furnaces

-Industrial microwave heaters / furnaces

-Industrial radio-wave heaters / furnaces

-Industrial resistive heaters / furnaces

-Graphite or carbon electrodes for electric furnaces

-Industrial electric boilers

-Industrial induction heaters / furnaces

-Industrial induction coils

-Industrial infrared heaters / furnaces

-Industrial infrared emitters

-Industrial microwave heaters / furnaces

-Industrial magnetrons

-Industrial radio-wave heaters / furnaces

-Radio frequency generators

-Industrial resistive heaters / furnaces

CO2 transport and utilisation technologies

CO2 transport technologies

CO2 utilisation technologies

-Thermochemical utilisation

-Electrochemical utilisation

Wind and electric propulsion technologies for transport

Wind propulsion technologies

-Flettner rotors

-Suction wing sails

-Towing kites

-Rigid wing sails

Electric propulsion technologies

-Electric propulsion systems for road transport

-Electric propulsion systems for rail transport

-Electric propulsion systems for waterborne transport

-Electric propulsion systems for air transport

-Automotive traction electric motors

-Permanent magnets of traction electric motor

-Automotive battery packs

-Automotive fuel cells

-Traction inverters

-Onboard chargers

-Charge ports

-Onboard hydrogen storages

-Current collectors (including pantograph)

-Rail propulsion electric motors

-Waterborne propulsion electric motors

Other nuclear technologies

Other nuclear technologies

(1)    The term ‘equivalent’ refers to similar steps or key enabling technologies needed for thin-film, organic, tandem or other PV technologies.
(2)    The term ‘Electric road system’ (also known as dynamic charging) refers to equipment along the road that supplies power to vehicles while they are in motion. This final product includes both conductive and inductive charging.
(3)    The term ‘heater’ refers to low (200 C) and medium (500 C) temperature applications. The term ‘furnaces’ refers to high (1000 C) and very high (1500 C) temperature applications.