The European Commission issued a proposal for a Net-Zero Industry Act (NZIA) this spring. The Finnish Forest Industries Federation (FFIF) seeks a broader inclusion of clean energy technologies and bioeconomy in the Act to harness the forest industry's potential in the green transition and reducing the use of fossil products.

The proposal for a Net-Zero Industry Act (NZIA) is currently being considered at the European Parliament. If the Act is approved in the November plenary session as planned, trilogies will follow. The proposed NZIA is supposed to be approved by the end of the year.

The NZIA is a part of the EU's Green Deal Industrial Plan and complements the critical raw materials and EU chip regulation. The Act aims to speedily build EU manufacturing capacity for carbon-neutral energy technologies. The goal of the Act is to increase strategic net zero technology production by 40 percent by 2030. The Act covers administrative streamlining, strategic net zero projects, carbon capture, sustainable and resilient procurement, and a skilled workforce. It also establishes a European Net Zero Industry Platform for an overseeing function.

Finland is committed to promoting the green transition of industry as part of the national climate act's goal of achieving carbon neutrality in 2035 and supports the Commission's goal of further accelerating the implementation of the dual transition. However, The Finnish Forest Industries Federation has reservations about the presented list that defines only certain net zero technologies and strategic projects as scope of the Act, as this does not take technological development into account.

All technologies enabling clean energy production are needed in the transition towards climate neutrality. FFIF has lobbied for bioeconomy to be included in the scope of the Act, as the forest industry has a lot to offer to the green transition and to the reduction of the use of fossil products.

It must be ensured that the proposed measures encourage innovation and investment, and that they comply with the WTO rules and the EU's other international obligations. It is a bit worrying that the Commission has not carried out an impact assessment of the proposal. Commission justifies the absence with the urgency of the matter and has promised to submit assessments of the proposal's effects in a separate document, expected in the next few weeks.

In addition to private investments, the transition to climate-neutral energy production also requires public funding, both in the form of EU funding and state subsidies granted by member states. FFIF considers it important that the public funding granted to future net zero projects is directed and implemented in such a way that it affects competition and the functioning of the internal market as little as possible. The primary purpose of EU state aid regulation should be correcting market deficiencies and not increasing strategic production capacity by responding to third countries' aid competition.

Finland emphasizes a market-based and technology-neutral approach, in which the market is given the opportunity to actively seek effective solutions to protect the climate and natural environment. FFIF fully supports the above. Open international rules-based trade plays a key role in securing the EU's competitiveness and supporting the green transition. It is crucial that the EU remains open to international trade and will keep attracting investments.