UPSC Prelims 2024 Q96: EU Net-Zero Industry Act — Explained
Consider the following statements:
Statement-I:
The European Parliament approved The Net-Zero Industry Act recently.
Statement-II:
The European Union intends to achieve carbon neutrality by 2040 and therefore aims to develop all of its own clean technology by that time.
Which one of the following is correct in respect of the above statements?
- Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- Statement-I is correct, but Statement-II is incorrect
- Statement-I is incorrect, but Statement-II is correct
Answer: (c) Statement-I is correct, but Statement-II is incorrect
Statement-wise explanation
- Statement-I: correct — The European Parliament approved the Net-Zero Industry Act (NZIA) in plenary on 25 April 2024. The vote was 361 in favour, 121 against and 45 abstentions. The Council of the EU then formally adopted it, and it became law as Regulation (EU) 2024/1735. This was less than two months before the 2024 Prelims, so 'recently' fits.
- Statement-II: incorrect — The European Climate Law (Regulation (EU) 2021/1119) sets climate neutrality for 2050, not 2040. Its interim targets are a net cut of at least 55% by 2030 and, since the 2026 amendment, 90% by 2040, both measured against 1990 levels. The NZIA does not aim for the EU to make 'all' of its own clean technology. It sets a benchmark of at least 40% of the EU's annual deployment needs for net-zero technologies by 2030. Because Statement-II is false, it cannot explain Statement-I.
How to eliminate
Three of the four options need Statement-II to be correct. Only one option says Statement-II is wrong. So if you can show Statement-II is false, you have the answer without knowing anything about Statement-I. Two clues make Statement-II false. The first is basic knowledge: the EU's climate-neutrality year is 2050. It was the first major economy to make that target legally binding, through the European Climate Law. India's year is 2070. The second is the absolute phrase 'all of its own clean technology'. No open economy plans to make every clean-tech product itself. Self-sufficiency claims like this are usually wrong, and the real NZIA figure is 40% by 2030. Fact to remember: EU, climate neutrality 2050, NZIA benchmark 40% of deployment needs by 2030. Statement-I was a current-affairs fact, the Parliament vote of 25 April 2024. In Statement-I/II questions, Statement-I is usually the news headline and is mostly true.
Know more
Net-Zero Industry Act (NZIA): what it is
The European Commission proposed the NZIA in March 2023 under its Green Deal Industrial Plan, together with the Critical Raw Materials Act (CRMA). Both respond to the EU's dependence on imported clean-tech supply chains, mostly from China, and to subsidy competition from the US Inflation Reduction Act. The NZIA is about manufacturing capacity, not emission targets.
| Feature | Detail |
|---|---|
| Legal form | Regulation (EU) 2024/1735, directly binding on member states |
| Parliament vote | 25 April 2024 (361–121–45) |
| Headline benchmark | EU manufacturing to meet at least 40% of annual deployment needs of net-zero technologies by 2030 |
| Technologies covered | Solar PV, wind, batteries and storage, heat pumps, geothermal, electrolysers and fuel cells, grid technology, carbon capture and storage, sustainable fuels, nuclear, and others |
| Tools | Faster permitting with fixed time limits, 'strategic projects', Net-Zero Acceleration Valleys, sustainability and resilience criteria in public procurement and auctions |
| CO2 storage | EU target of 50 million tonnes of annual CO2 injection capacity by 2030 |
How the EU's climate targets fit together
| Year | Target (net GHG cut vs 1990) | Source |
|---|---|---|
| 2030 | at least 55% ('Fit for 55') | European Climate Law, 2021 |
| 2040 | 90% (up to 5 points from international credits) | Climate Law amendment, Regulation (EU) 2026/667 |
| 2050 | Climate neutrality (net zero) | European Climate Law, 2021 |
Related EU tools UPSC links to India: the Carbon Border Adjustment Mechanism (CBAM), which charges a carbon price on imports of steel, aluminium, cement, fertilisers, hydrogen and electricity, and the EU Emissions Trading System (a cap-and-trade scheme). For comparison, India's net-zero year is 2070.
In the news
The European Parliament passed the Net-Zero Industry Act on 25 April 2024, about seven weeks before Prelims on 16 June 2024. That year the EU's clean-tech industrial policy was in the news together with CBAM, which affects Indian steel and aluminium exports.
NCERT Concepts to Revise
- Carbon neutrality: Statement-II depends on the year the EU has set for reaching carbon neutrality.
- Net zero: The Net-Zero Industry Act is named after this goal; knowing what net zero means explains why clean-tech manufacturing matters.