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1. By 30 March 2025, Member States shall, when setting up net-zero regulatory sandboxes, establish or designate one or more contact points. A sole contact point shall be responsible for each request to establish a net-zero regulatory sandbox pursuant to this Article.

2. Member States, together with local and regional authorities and other Member States where appropriate, may at their own initiative establish net-zero regulatory sandboxes. Member States shall establish net-zero regulatory sandboxes, in close collaboration with industry and, where relevant, research institutes, the social partners and civil society, in accordance with paragraph 1 at the request of any company, organisation or consortium developing innovative net-zero technologies that fulfils the eligibility and selection criteria laid down in the paragraph 3, second subparagraph, point (a), and that has been selected by the competent authorities following the selection procedure referred to in the paragraph 3, second subparagraph, point (b).

3. The arrangements and the conditions for the establishment and operation of the net-zero regulatory sandboxes pursuant to paragraph 2 shall be adopted by means of implementing acts. Those arrangements and conditions shall support flexibility of the competent authorities with regard to prioritising between and approving applications for net-zero regulatory sandboxes. They shall foster innovation and regulatory learning and shall particularly take into account the special circumstances and capacities of participating SMEs and start-ups. Those implementing acts shall include common main principles on the following issues:

(a) the eligibility criteria and selection procedure for participation in the net-zero regulatory sandboxes;

(b) the procedure for the application, participation, monitoring, exiting from and termination of the net-zero regulatory sandboxes;

(c) the terms and conditions applicable to the participants. Those implementing acts shall be adopted in accordance with examination procedure referred to in Article 45(2).

4. Participation in net-zero regulatory sandboxes shall not affect the supervisory and corrective powers of the authorities supervising the net-zero regulatory sandbox. The testing, development and validation of innovative net-zero technologies or other innovative technologies shall take place under the supervision and with the support of the competent authorities. The competent authorities shall exercise their supervisory powers in a flexible manner within the limits of the relevant law, adapting existing regulatory practices and using their discretionary powers when implementing and enforcing legal provisions to a specific net-zero regulatory sandbox project, with the objective of removing barriers, alleviating regulatory burden, reducing regulatory uncertainty, and supporting innovation in net-zero technologies or other innovative technologies.

5. For the purpose of achieving the objective of this Article, the competent authorities shall consider whether to grant derogations or exemptions in national law to the extent allowed by relevant Union law. The competent authorities shall ensure that the net-zero regulatory sandbox plan respects the requirements of Union law and the key objectives and essential requirements of national law. Competent authorities shall ensure that any significant risk to health, safety or the environment identified during the development and testing of innovative net-zero technologies or other innovative technologies is publicly communicated and results in the immediate suspension of the development and testing process until such risk is mitigated. Where competent authorities consider that the proposed project raises exceptional risks for the health and safety of workers, of the general population, or of the environment, in particular because it relates to testing, development or validation involving particularly toxic substances, they shall only approve the net-zero regulatory sandbox plan provided that they are satisfied that adequate safeguards commensurate with the exceptional risk identified have been put in place.

6. Participants in the net-zero regulatory sandbox shall remain liable under applicable Union and Member States’ liability law for any material harm inflicted on third parties as a result of the testing taking place in the net-zero regulatory sandbox.

7. The duration of the net-zero regulatory sandbox may be extended through the same procedure upon agreement of the national competent authority.

8. The net-zero regulatory sandboxes shall be designed and implemented in such a way that, where relevant, they facilitate cross-border cooperation between the national competent authorities. Member States that have established net-zero regulatory sandboxes shall coordinate their activities and cooperate within the framework of the Platform with the objective of sharing relevant information with other Member States. The Platform may invite companies that have participated in a net-zero regulatory sandbox to share their experience of the process. The Commission shall, on the basis of information provided by the Members States and the discussions held in the Platform, report regularly on the results of the implementation of net-zero regulatory sandboxes, including good practices, lessons learnt and recommendations on their setup and, where relevant, on the application, within the net-zero regulatory sandbox, of this Regulation and other Union law in a manner adapted for the purposes of the net-zero regulatory sandbox.