Fortum's feedback on the Commission's Net Zero Industry Act (NZIA)

Fortum welcomes the objectives of the Commission proposal for strengthening Europe’s net-zero technology products manufacturing ecosystem, the Net Zero Industry Act (NZIA). We agree that the transition to a climate neutral, clean economy and the corresponding overhaul of the energy system present significant opportunities in terms of developing the net-zero technology sectors and creating quality jobs and growth in Europe.

Fortum welcomes the initiative of the Commission for improving investment certainty and market access, supporting innovation and job creation and lowering administrative burden for net zero technologies in Europe.

The NZIA, however, falls short on certain aspects. Reaching the EU climate targets and upholding industrial competitiveness requires a level playing field and incentives for all available net zero technologies, including nuclear technologies. To our regret, the Commission’s proposal excludes nuclear and hydropower from the list of strategic net zero technologies.

Technological neutrality in net-zero technologies should be a starting point

The Commission proposal defines as net-zero technologies advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle, small modular reactors (SMRs), and related best-in-class fuels. According to Article 10 on strategic net-zero technologies¹, nuclear is excluded.

Fortum underlines that nuclear energy technology is a crucial component for achieving global net-zero objectives, partnering with renewable energy sources and other low-carbon options, and enabling the decarbonization and electrification of societies.

It is therefore unclear why nuclear has not been included among the strategic net-zero technologies listed in the annex since the purpose of the regulation is to establish a framework of measures for innovating and scaling up the manufacturing capacity of net-zero technologies in the Union to support the Union’s 2030 target of reducing net greenhouse gas emissions by at least 55 % relative to 1990 levels and the Union’s 2050 climate neutrality target.

The EU should recognise the role of nuclear energy as a strategic net-zero technology that has the required technological readiness, contributes to industrial competitiveness, security of supply, and decarbonization and thereby strengthens EU’s strategic autonomy.

In Fortum’s view it is very difficult to predetermine which technologies are important in the NetZero transition and where critical dependencies will emerge. The commission should determine the criteria for strategic NetZero technologies and leave up to member states to interpret whether an individual project deploying NetZero manufacturing technology fulfils the criteria.

Nuclear should be included in full as a net-zero strategic technology

With regards to article 3(a)² Fortum emphasizes that nuclear technologies should be fully included into the definition. We insist that both large and small modular reactors, as well as existing and new build reactors and fuel cycle should be included in the NZIA. It is clear that more nuclear energy is needed to meet the increasing demand for electricity while meeting the climate goals.

By including the entire nuclear energy value chain in the strategic net-zero technology category in the NZIA, the EU would have the opportunity to support the European nuclear sector and enable it to compete on a level playing field with other global regions. For instance, the US has incorporated its entire nuclear energy industry under the Inflation Reduction Act, while China and Russia are subsidizing their own technologies for export purposes.

Streamlining of the new nuclear development secures Europe’s industrial competitiveness, security of supply, and decarbonization

Shorter permitting times are necessary not only for the manufacturing of these technologies but also for the implementation of projects that utilize these important technologies. The EU has already accelerated permitting times for renewable technologies, and we urge an approach of equivalent ambition for nuclear.

Streamlining the regulatory process, especially fully utilizing regulatory approvals made in one member state also in other member states regarding SMR technologies, for nuclear energy projects would reduce uncertainty, improve investor confidence, and accelerate deployment of new nuclear technologies, thereby contributing to achieving decarbonization goals. We hope the EU will consider this recommendation as part of its efforts to establish a robust and competitive nuclear industry in Europe.

In conclusion, we appreciate the efforts of the European Commission to facilitate a clean energy transition. We urge the EU to recognize nuclear energy as a strategic net-zero technology that contributes to industrial competitiveness, security of supply, and decarbonization. We hope that the EU will take this opportunity to support the European nuclear sector and enable it to compete on a level playing field with other global regions.

¹Article 10.1 defines that Member States shall recognise as net-zero strategic projects net-zero technology manufacturing projects corresponding to a technology listed in the Annex (nuclear not included) and located in the Union that contributes to the realisation of the objectives set out in Article 1 of NZIA regulation and meet at least one of the following criteria: Art 10.1(a): a net-zero technology manufacturing project should contribute to the technological and industrial resilience of the Union’s energy system; Art 10.1(b): net-zero technology manufacturing project should have positive impact on the Union’s net-zero industry supply chain or downstream sectors by: (i) it adds significant manufacturing capacity in the Union for net-zero technologies; (ii) it manufactures technologies with improved sustainability and performance; (iii) it puts into place measures to attract, upskill or reskill a workforce required for net-zero technologies, including through apprenticeships, in close cooperation with social partners; (iv) it adopts comprehensive low-carbon and circular manufacturing practices, including waste heat recovery.

²Article 3(a): ‘net-zero technologies’ means (…) advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle, small modular reactors, and related best-in-class fuels (…) They shall have reached a technology readiness level of at least 8.