Net-Zero Industry Act (NZIA)

The Net-Zero Industry Act (NZIA) sets targets for the EU production capacity of strategic net-zero technologies. The act defines 19 net-zero technologies (NZT) to be promoted in order to realize EU climate targets. These technologies contribute to the EU's resilience and security of clean energy supply, are commercially available and can be scaled up quickly.

Net-zero technologies refers to final products, specific components or specific machinery primarily used for the production of those products. Please refer to the section below for detailed information on selected key technologies in Germany. 

NZT Manufacturing  in Germany

Germany is in a leading position for the production of many net-zero technologies (NZT) in sectors as varied as solar PV, wind, electrolyzers, and fuel cells. Within the hydrogen industry, Germany has the highest installed electrolyzer manufacturing capacity within the EU. The introduction of the NZIA will further boost manufacturing capacity in Germany’s cleantech industry. 

Selected NZT in Germany

Photovoltaics, wind and hydrogen are playing a key role in shaping Germany’s sustainable energy future. Germany's energy transition is providing significant market opportunities in these fields. International companies can benefit from unique market conditions, excellent industry infrastructure and advantageous partnering opportunities.  

Germany's Photovoltaic Industry 

Germany is the biggest and fastest-growing rooftop solar PV market in Europe.

• Europe’s PV market leader with more than 100 GW capacity 

• PV installation target of 215 GW by 2030 and 400 GW by 2040

New business models are being developed to build the base for the economic operation of PV systems beyond the feed-in tariff scheme. The large pool of installed PV systems is a pillar for the development of the energy storage systems market.

Germany's Wind Industry 

Germany’s wind energy market is one of the world's largest and set to grow on- and offshore.

• Germany is the biggest market in Europe with 73 GW of installed wind energy capacity and new installations of more than 4 GW in 2024

• Offshore is gaining momentum - installed capacity already at 9.2 GW and Germany aims to reach 30 GW in 2030 and 50 GW in 2035

• Onshore capacity is targeted to reach 115 GW in 2030

Further expansion both onshore and offshore will lead to high demand for wind turbines, implementation expertise, operation, and maintenance services. 

 Germany's Hydrogen Economy 

Green and low carbon hydrogen is set to play a decisive role in Germany’s energy transition. 

• Demand for green hydrogen should increase massively with forecasts ranging from 400 TWh to 800 TWh by  2050

• Hydrogen electrolyzer target set to 10 GW by 2030

Investment in hydrogen production, such as electrolysis plants and import infrastructure including import terminal transformation units (e.g. ammonia crackers), will be crucial. The hydrogen ramp-up will also be beneficial for the green transformation of the steel, chemicals and petrochemical industries.

Fixed Time Limits for Permit Process

The NZIA sets maximum time limits for the permit process for the construction or expansion of NZT manufacturing projects. Subject to the project's annual manufacturing capacity, the following time limits apply: 

• less than 1 GW: 12 months
• 1 GW or more: 18 months

The time limit of 18 months also applies to projects for which a annual manufacturing capacity is not measured in GW, e.g. carbon capture and storage (CCS) technologies.

In the case of particularly complex projects, the responsible authorities may extend these time limits by up to three months once. These time limits do not include the steps of an eventual environmental impact assessment (EIA).

Shorter permit periods and other advantages apply to strategic net-zero projects.

Streamlining of Permit Process

The NZIA also introduces the establishment of single points of contact in each EU member state. These will facilitate and coordinate the approval process for NZT manufacturing projects.

The NZIA ensures that authorities accept all documents electronically and take into account pre-existing relevant studies and permits to avoid duplication. A recent reform in Germany already expanded the possibility for digital immission control procedures. 

Permit Procedures in Germany

At present, the construction and operation of certain production plants may require an immission control permit among other things. An immission control permit is required, for example, for industrial facilities listed in the Fourth Immission Control Ordinance. Immission control permit procedures apply subject to the size and type of the facility with even shorter time limits than set out in the NZIA.

• Formal procedure with public participation and a general statutory time limit of seven months
• Simplified procedure without public participation and a general statutory time limit of three months

Both kinds of procedure may be extended for another three months subject to the particular complexity of a project. 

An EIA can be required subject to the type and size of the industrial facility as listed under the annexes of the EIA Act. The EIA is integrated into the immission control permit process.

Where an immission control permit is not required, other permits may still be required. For instance, the construction, alteration or change of use of buildings requires a building permit. The building permit procedures are regulated at the federal state level and typically cover areas including distance space, fire protection and sound insulation.

Concentration Effect

The immission control permit procedure has a concentration effect. This means that many requirements, for instance construction law, nature conservation, forestry law, water, and wastewater regulations are to a certain degree examined by the responsible authorities and summarized in one single permit. The immission control authority involves other affected authorities.

Strategic Projects 

Net-zero production projects located in Germany can be recognized as strategic projects. The benefits of strategic project status include priority status for relevant administrative processes including, for example, the permit-granting process (including environmental assessments and spatial planning). Because strategic projects contribute to the supply security of NZT, these are considered to be in the public interest. 

Strategic projects also enjoy accelerated permit processes for construction or expansion purposes. Subject to the project's annual manufacturing capacity, the following time limits apply: 

• less than 1 GW: 9 months 
• 1 GW or more: 12 months

The maximum period of 12 months also applies to NZT strategic projects for which an annual manufacturing capacity is not measured in GW. A maximum time limit of 18 months applies for CO₂ storage sites.

Selection Criteria

Strategic projects must fulfil either the resilience, competitiveness or climate criteria.

• Increase in EU production capacity for a component or segment of the NZT supply chain
• EU access to the best available NZT or products produced in first-of-a-kind manufacturing facility
• Improvements in environmental sustainability, performance or circularity achieved through production processes using NZT

Deviating criteria apply to CO₂ storage sites.

Application Process

The application process has two steps. 

• The applicant submits the application online at the EU level. The application is forwarded to the relevant member state.
• In Germany, the Federal Ministry for Economic Affairs and Climate Action (BMWK) coordinates the forwarding of applications to the relevant state authorities responsible for the application.

For details on the procedure, please refer to the EU guidelines for the strategic projects application process .

Acceleration Valleys

Member states may designate net-zero Acceleration Valleys as specific areas to accelerate net-zero industrial activities. This pertains specifically to the following activities: 

• accelerate the implementation of NZT manufacturing projects including net-zero strategic projects or clusters thereof, or
• to test innovative NZT.

Acceleration Valleys facilitate the establishment of clusters for net-zero technology industrial activity and further streamline administrative procedures. 

NZT projects in acceleration valleys can benefit from public interest status similar to that assigned to strategic projects. Additionally, these projects can rely on strategic environmental assessments carried out in advance in each valley for clearly defined industrial sectors. This streamlines procedures for individual projects that are also able to benefit from a dedicated single point of contact for each valley. 

Facilitated Market Access 

For public procurement procedures within the EU public procurement framework involving certain net-zero technologies (NZT), contracting bodies have to apply minimum environmental sustainability requirements. The EU Commission will specify these requirements in an implementing act to be issued in 2025.

Authorities must also consider at least one criterion among social sustainability, cybersecurity and timely delivery obligations. In cases of high dependency (for instance more than 50 percent) on a third country, the resilience criterion requires public buyers to diversify supply sources for the specific NZT.

Similar conditions are stipulated for renewable energy auctions.

Skills and Innovation

Strengthening the manufacturing capacity of key NZT requires a skilled workforce. European net-zero Industry Academies aim to develop learning content and programs together with the industry. 

In June 2024, the EU established a European Solar Academy that will develop tailored training services to reskill and upskill 65,000 workers across the photovoltaic value chain. This EU Academy will be followed by further academies in different industrial key areas.

The creation of net-zero regulatory sandboxes will be a major driver of innovation. These allow for the testing of innovative NZT and other innovative technologies in a controlled real-world environment. Sandboxes may be initiated by EU member states or requested by a company developing innovative NZT.

Incentive programs in Germany are available through a number of different public funding instruments and for different funding purposes. Incentive support ranges from cash grants to loans and R&D incentives. International companies can benefit from these incentives that are designed to enhance Germany's industrial competitiveness.

Investment Grants in Germany

The GRW cash grant program is Germany’s largest and most successful funding instrument. This has been delivered by the federal and regional state governments since the 1970s to foster structural and economic development in Germany’s regions. 

In September 2023, the GRW program was expanded to focus more strongly on  NZT investments. The Federal Framework for Transformational Technologies (BKR), which was approved by the European Commission, forms the legal basis for the acceleration of NZT production capacities. 

Production of the following technologies supporting a net-zero economy are eligible for support until the end of 2025:  

• strategically important equipment for the transition technologies (batteries, solar panels, wind turbines, heat pumps, electrolyzers, equipment for the capture, use and storage of CO₂ (CCU/CCS technologies)
• certain key components for the equipment

This specific support is only available in certain regions. The assisted regions are published for each funding period and are highlighted in the map below. Each German federal state with funding regions has its own specific regulations for allocating GRW incentives within the federal framework.

A detailed overview of available incentive programs in Germany can be found in the Incentives Chapter of our online Investment Guide.

European Union Funding

The Strategic Technologies for Europe Platform (STEP) pools EU funding programs to different focus investment sectors including clean and resource-efficient technologies. Projects that fullfil specific quality requirements can be awarded a STEP seal. This facilitates the overall funding and increases the visibility of the project.