IAA legal reference
When excessive cost can allow a requirement not to be applied
The proposal sets different safeguards for auctions, procurement and financial support. Crossing the relevant threshold activates the legal option not to apply the requirement; it does not oblige a government to use that option.
See the requirements by product →Instrument by instrument
Excessive-cost thresholds by instrument
A bar on a product page should be compared only with the threshold for the instrument through which the origin requirement is being applied.
| Provision channel | Cost derogation (“escape clause”) | Relevant products | Other derogations or exceptions |
|---|---|---|---|
| Auctions | 20%Increased from 15% in the existing NZIA | Battery storage; solar parks; wind parks; hydrogen produced using electrolysers | Time delays above 7 months, for example because of unavailability |
| Public procurement | 25% | Most IAA products | Single supplier or no reasonable substitute; no suitable tenders; technical incompatibility. Clean-tech procurement under the NZIA also covers significant delays or unavailability. |
| Other financial supportDemand-side subsidies, purchase premiums and tax advantages | 30% | EV support schemes and tax advantages for corporate cars; energy-intensive products in supported buildings, infrastructure and vehicle-support schemes | Time delays above 7 months, for example because of unavailability |
| No cost derogationIf additional subsidies are given for compliant products, they are capped at 15% (20% for energy-poverty schemes). | Demand-side support for BESS, solar PV and hydronic heat pumps | — | |
| Manufacturing subsidies | 25% | Electrolysers; new-build nuclear plants and SMRs | Single supplier or no reasonable substitute; technical incompatibility; project jeopardy; significant delays or unavailability |
Source: Jacques Delors Centre, “Paradigm Shift in Principle, Paper Tiger in Practice?” ↗. Legal text: COM(2026) 100 ↗, Articles 11 (procurement, 25%) and 12 (other public support, 30%); Article 34, amending the Net-Zero Industry Act: new Article 25a (procurement, 25%), Article 26 as amended (auctions, 20%), Article 28a(3) (15% and 20% caps) and Article 28c (manufacturing support, 25%).