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Dr. eng. Irina Terzyiska European labor institute - ELI

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1 Dr. eng. Irina Terzyiska European labor institute - ELI
Key EU legislation, key EU financing, local experience and best world prаctices Dr. eng. Irina Terzyiska European labor institute - ELI

2 for economic growth and playing key role in innovation and R&D.
SMEs in EU SMEs are the back-bone of the European economy being primarily responsible for economic growth and playing key role in innovation and R&D. European SMEs: are 23 M; represent 99% of all businesses, typical SME - a micro-enterprise with less than 10 employees; provide around 90 M jobs in the single market or 2 out of 3 (of the private sector) jobs; contribute to more than half of the total value-added created by businesses in EU; > half are engaged in trade, real estate, renting and business; create largely green jobs - 37% of them have at least one (full or part-time) green employee. ELI

3 Attitude towards environment
SMEs contribute (roughly) 64% to the industrial pollution in Europe. They are largely “green” in terms of compliance with environmental legislation: ¼ have positive environmental behavior: save energy (64%), minimise their waste (62%) and recycle (61%); have an environmental management system ; 26% offer green products or services; mainly on the national market (at about 80%); 58% of SMEs consider the best means to help “greening” of products and services offered are financial incentives . 43% - receive external support for environmental actions, 1 in 10 SMEs - EU support; Problems: lack of expertise, lengthy approval procedures for new products, lack of consumer demand. Training for green skills is essential. Needs: easier environmental permitting procedures, simpler environmental reporting, one-stop-shops to save time and free or subsidised advisory services. ELI

4 Environmental Compliance Assistance Programme (ECAP)
ECAP (proposed by the EC in 2008) aims to ease SMEs for improving their environmental performance and to: minimise the administrative burden; create accessible tailor-made environmental management schemes for SMEs; build up local know-how by: capacity building seminars, network of environmental experts and business support organisations; improve communication; provide information for funding opportunities etc. ELI

5 Key EU legislation Europe 2020 Strategy;
Energy Efficiency (EE) Directive (2012); Energy Performance of Buildings Directive - EPBD Recast (Directive 2010/31/EU; The Directive 2009/28/EC on Renewable Energy; Environmnet Impact Assessment (EIA) Directive 85/337/EEC; Small Business Act (SBA) for Europe (2008); EU Cohesion Policy of the European Union ; Programme for the Competitiveness of enterprises and SMEs (COSME) ; Horizon 2020. ELI

6 Key EU legislation Environmental policy - relatively recent EU policy area: environmental protection was not mentioned in the Treaty of Rome (1958); the Single European Act (1986) - introduces the principal that environmental protection should be included in the EU legislation; EU environmental policy expanded by the Treaties of Maastricht (1992) and Amsterdam (1997) - the sustainable development became EU central objectives, it forms a key part of the Europe 2020 Strategy; the implementation of a Community environmental legislation is to be ensured (in the first place) by Member States. ELI

7 Key EU legislation/programmes
Europe 2020 Strategy - EU growth strategy for the coming decade It has 5 targets, covering: 1. Employment 75% of the year-olds to be employed 2. R&D  3% of the EU's GDP to be invested in R&D 3. Climate change / energy greenhouse gas emissions 20% (or even 30%, if the conditions are right) lower than 1990 20% of energy from renewables 20% increase in energy efficiency 4. Education Reducing school drop-out rates below 10% at least 40% of year-olds completing third level education 5. Poverty / social exclusion at least 20 million fewer people at risk of poverty and social exclusion ELI

8 Key EU legislation/programmes- 2
And 7 “flagship initiatives”  framework for EU and national authorities to support Europe 2020 priorities and both - to coordinate their efforts for: 1. Smart growth Digital agenda for Europe Innovation Union - creating more jobs, building a greener society, improving the quality of life and maintaining EU competitiveness on the global markets. Youth on the move 2. Sustainable growth Resource efficient Europe – more cost-efficient ways to make the EU economy climate-friendly and less energy-consuming. By 2050, Europe could cut most of its greenhouse gas emissions. Clean tecnologies are the future for Europe’s economy. An industrial policy for the globalization era 3. Inclusive growth An agenda for new skills and jobs European platform against poverty ELI

9 EU Directives Directives: 1. Energy Efficiency (EE) Directive:
adopted - on the 11th Sept., 2012; establishes a common framework to ensure the target of 20 % primary energy savings by 2020; aims to remove barriers impeding EE in energy supply and use. Provisions related to SMEs. MS should: ensure that energy audits are available for SMEs; establish a favourable framework for providing SMEs with technical assistance and targeted information; stimulate the energy performance contracting and the third-party financing arrangements in favour of end-users. Text version before official publication: ELI -

10 EU Directives - 2 2. Energy Performance of Buildings Directive - EPBD Recast (Directive 2010/31/EU): adopted on 19 May 2010 – a step towards higher EE efficiency in buildings ; establishes requirement for new public buildings (from 2018) must consume nearly zero energy, for all new buildings – the demand is from 2020; agrees a definition of very low energy building as: "nearly zero energy building”- NZEB. It means a building that has a very high energy performance; sets out a harmonised calculation methodology for minimum energy performance requirements towards a cost-optimal level; requires MS to ensure that an Energy Performance Certificate is issued when buildings are constructed, sold or rented out and penalties for non-compliance. ELI

11 EU Directives - 3 3. The Directive 2009/28/EC on renewable energy (RE): implemented in MS by December 2010; sets ambitious targets to EU: to reach a 20% share of RE by 2020 and a 10% share of RE in the transport sector (mainly covered by biofuels); improves the legal framework for promoting renewable electricity, requires national action plans that establish pathways for the development of RES; Sets up calculation‘s methofology of the greenhouse gas impact of biofuels and bioliquids; 4. Directive 85/337/EEC, known as 'Environmental Impact Assessment' (EIA) Directive: ensures that plans, programmes and projects likely to have significant effects on the environment are made subject to an environmental assessment, prior to their approval or authorisation; requires the projects and programmes co-financed by the EU funds have to comply with the EIA Directive to receive approval for financial assistance -It is a crucial tools for sustainable development. ELI

12 EU acts for SMEs The Small Business Act (SBA) for Europe (2008) - tool for reaching the objectives of Europe 2020 strategy and the first comprehensive SME policy framework for EU and MSs: aims to raise SMEs’ awareness on environmental and energy-related issues; assists them in implementing legislation and in upgrading their skills and qualifications; promotes entrepreneurship and anchors the “Think Small First” principle in law and policy making to strengthen SMEs’ competitiveness. SBA is built around 10 principles – friendly environment for entrepreneurs, honest entrepreneurs facing bankruptcy to have second chance, public administrations to become responsive to SMEs’ needs, ease use of State Aid possibilities for SMEs, help for SMEs to benefit of the Single Market, enabling SMEs to turn environmental challenges into opportunities etc. After the SBA Review (2011) a set of new actions were proposed to meet the challenges of the economic crisis, and enhance further development in line with the Europe 2020 strategy by: making smart regulation a reality for European SMEs, paying specific attention to SMEs’ financing needs, enhancing market access for SMEs, helping SMEs to contribute to a resource-efficient economy, and promoting entrepreneurship, job creation and inclusive growth. ELI .

13 Further EU acts for SMEs’ support
EU Cohesion Policy of EU : Its task - to contribute to EU 2020 Strategy of a smart, sustainable and inclusive growth; The legislative pack (the rules and the priorities) for the policy after adopted by the EC in Further - will be discussed by the Council and EP during The new Regulations should enter into force in 2014; The budget for Europe focused for providing added value of EU. The overall amount proposed for the period - €1 025 bn; Future funding for energy policy - €50 bn (for investments to improve transport, energy and digital networks across Europe). The energy sector will benefit from €9.1 bn; Clear rules elaborated - for better combination of financial instruments and other kind of support (in particular - grants). MS will experience greater flexibility to choose investments and to select the financial instruments. ELI

14 Further EU acts for SMEs’ support - 2
2. Programme for the Competitiveness of enterprises and SMEs (COSME) Will run from 2014 to 2020, with a planned budget of €2.5 bn. Objectives: facilitating SMEs’ access to finances; creating favourable environment to business creation and growth; encouraging entrepreneurial culture in Europe; increasing competitiveness of EU companies; helping small businesses operate outside their home countries and improving their access to markets. Main beneficiaries Existing entrepreneurs (small businesses in particular) – easier access to funding for development, consolidation and growth of their business. Future entrepreneurs (including young people) – assistance in setting up their own business. National, regional and local authorities – providing tools for effectively reforming policy: EU wide data, best practice and financial support to test and scale up solutions for improving global competitiveness. COSME is expected to contribute to an annual increase of €1.1bn in the EU's GDP. The Enterprise Europe Network is expected to assist 40,000 companies with partnership agreements. ELI

15 Further EU acts for SMEs’ support - 3
3. Horizon 2020 – a financial instrument implementing the Innovation Union and the Europe 2020 flagships, which: runs from 2014 to 2020 with an €80 bn budget; provides major simplification through a single set of rules, combines all research and innovation funding currently provided; proposes support for research and innovation and will: enhance EU science with a budget of € bn; promote industrial leadership in innovation with € bn i.e by investment in key technologies, greater access to capital and support for SMEs; provide € bn to address major concerns such: as climate change, developing sustainable transport and mobility, making RE more affordable, ensuring food safety and security, or coping with the challenge of an ageing population. 4. As EU presidency, Cyprus, will put SMEs at the centre of policy-making. In November it will host Assembly on SME issues, in Nicosia and bring together SMEs; business organisations; EU, national and regional government; academia and the media to discuss how to help SMEs ‘Go for Growth’. ELI

16 Main funding opportunities to European SMEs
EU supports European SMEs in the following forms: as grants, loans; in some cases - guarantees; directly or through programmes, managed at national or regional level (such as the EU’s Structural Funds); non-financial assistance - programmes and business support services. 4 supporting schemes are available: Thematic funding opportunities - with specific objectives - environment, research, education – by the departments of the EC. SMEs can apply directly; Structural funds - European Regional Development Fund (ERDF) and European Social Fund (ESF) - the largest Community funding instruments benefiting SMEs, through different thematic programmes, managed at national level; Financial instruments - available indirectly, via national financial intermediaries. Many of them are managed by the European Investment Fund. 4. Support for the business and the internationalisation of SMEs - via intermediary organisations – EEN... ELI

17 Sectors: Environment, Energy and Transport
Key EU Funding Sectors: Environment, Energy and Transport 1. Programme LIFE +: contributes to the implementation, updating and development of EU environmental policy and legislation; co-finances pilot or demonstration projects with European added value; began in1992, current phase of the program runs to 2013 with global budget of €2.1 bn. Contains 3 strands: Nature and Biodiversity; Environment Policy and Governance; Information and Communication SMEs may access LIFE+ funds, both from the part managed centrally by the EC and from the one, managed by national agencies. ELI

18 Key EU Funding - 2 2. Competitiveness and Innovation Framework Programme (CIP) = an integrated response to the objectives of the (renewed) Lisbon strategy for growth and jobs. Runs from 2007 to 2013, with a budget of (approximately) €3.6 bn. As regards environment and energy concerns, the CIP comprises: an Entrepreneurship and Innovation Programme (EIP) with an eco-innovation part. €430 M are allocated for tapping the full potential of environmental technologies; an Intelligent Energy Europe Programme (IEE) with approximately €727 M. For actions to increase the energy efficiency, to promote renewable energy sources and energy diversification, and to stimulate the diversification of fuels and energy efficiency in transport; an Information and Communication Technologies Policy Support Programme (ICT-PSP), with a budget of € 730 M for pilot actions (involving both public and private organizations). The aim - to stimulate innovation and competitiveness through the best use of ICT incl. for energy efficiency. ELI

19 Sector: Innovation and Research
Key EU Funding - 3 Sector: Innovation and Research 1. The Seventh Framework Programme for Research and Technological Development ( ) - FP7 pays special attention to the SMEs through its different programmes: “Co-operation” (circa € 32.3 bn), “Ideas” (circa € 7.5 bn), “People” (circa € 4.7 bn) and “Capacities” (circa € 4 bn): “Co- operation” programme - SMEs are actively encouraged to participate in all research actions, especially in: Joint Technology Initiatives (JTIs); "Ideas" programme - open to SMEs Like any other organisation, research teams from SMEs can compete on the basis of excellence ; “People” programme - encouraging increased SME participation under “Industry-academia partnerships and pathways”; “Research for the benefit of SMEs” in the“Capacities” aims to strengthen the innovative capacity of European SMEs and their contribution to the development of new technology - based products and markets.The indicative budget for the SME specific actions is circa €1.3 bn. ELI

20 Key EU Funding - 4 2. Competitiveness and Innovation Framework Programme (CIP) – as regards innovation and information technologies, the CIP comprises two main strands: the Entrepreneurship and Innovation Programme (EIP) - aims to improve the conditions for innovation: exchanges of best practices between MS and actions to encourage and promote innovation in SMEs – especially fostering sector-specific innovation, clusters, public-private innovation partnerships and - application of innovation management; the ICT Policy Support Programme with € 728 M - aims to stimulate the new converging markets for electronic networks and services, media content and digital technologies. ELI

21 Key EU Funding – 5 Structural Funds - for reducing disparities in the development of regions, and promoting economic and social cohesion within the EU. EC co-finances regional projects in the Member States. Direct aid to SMEs to co-finance their investments is only possible in economically less developed regions. Programmes are managed and the projects selected at national and/or regional level! For the period , Strategy and resources of the Cohesion policy, embracing the Structural funds, had three priority objectives, with a total allocation of € bn: Convergence: to speed up the economic convergence of the less developed regions (81.54% of the budget); Regional competitiveness and employment: to strengthen regional competitiveness and attractiveness and help workers and companies to adapt themselves to economic changes (15.94% of the budget); European territorial co-operation: to strengthen cross-border, transnational and interregional co-operation (2.52% of the budget). ELI

22 Key EU Funding – 6 European Regional Development Fund ( ERDF) - the largest Community financial instrument Benefiting SMEs - aims to reduce disparities in the development of regions and to support Social and economic cohesion within the EU. ERDF co-finances activities in the areas: entrepreneurship, innovation and competitiveness of SME (for ex. entrepreneurial mentoring, innovative technologies and management systems in SMEs, eco-innovation, better use of ICT); improving the regional and local environment for SMEs (for example access to capital for SMEs in the start-up and growth phase, business infrastructure an support services for SMEs, regional and local RTD and innovation capacities, business co-operation and innovation capacities); interregional and cross-border co-operation of SMEs; investment in human resources (along with funding from the European Social Fund). ERDF programmes are not directly managed by the EC but by national and regional authorities. ELI

23 Key EU Funding – 7 Financial instruments - processed through financial intermediaries such as banks, credit institutions or investment funds - intend to increase the volume of credit available to SMEs. 1. Competitiveness and Innovation Framework Programme (CIP) - €1130 M - for financial instruments for , organised under 3 schemes. The schemes are managed on behalf of the EC by the European Investment Fund (EIF): The High Growth and Innovative SME Facility (GIF) - aims to increase the supply of equity for innovative SMEs both in their early stages (GIF1) and in the expansion phase (GIF2). GIF shares risk and reward with private equity investors, providing important leverage for the supply of equity to innovative companies; The SME Guarantee Facility (SMEG) provides additional guarantees to guarantee schemes, in order to increase the supply of debt finance to SMEs. A Capacity Building Scheme supports the capacity of financial intermediaries in some MS. ELI

24 Key EU Funding – 8 2. Joint European Resources for Micro and Medium Enterprises (JEREMIE) - a joint initiative of the EC and the European Investment Fund (EIF) with the European Investment Bank (EIB): aims to improve access to finance for micro to medium- sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and/or other forms of innovative financing; gives special emphasis to supporting start-ups, technology transfer, technology and innovation funds and micro-credit; is managed as an integral part of the ERDF: its projects are selected at national and regional level. For access financing of national/regional managing authorities: ELI

25 Key EU Funding – 9 3. European Investment Fund (EIF) - based on two instruments: EIF’s venture capital instruments consist of capital investments in venture capital funds and business incubators that support SMEs, particularly those that are newly created and technology-oriented. EIF’s guarantee instruments consist of providing guarantees to financial institutions that cover credits to SMEs. 4. European Investment Bank (EIB) loans - delivered via intermediaries such as commercial banks. They are targeted at tangible or intangible investments by SMEs. EIB loans may also help to provide a stable working capital base to SMEs.The duration of the loans will be between 2 and 12 years, with a maximum amount of €12.5 M per loan. 5. European Bank for Reconstruction and Development (EBRD) programmes - provides financing to SMEs in 11 countries in central Europe, including new member states. The finance is processed through local banks, leasing companies and equity funds. The funding available is of € 847 M from the EBRD, with a contribution from the European Commission of € 130 M. ELI

26 EU Funding and EU companies
In brief: Micro, small, medium and large Companies could participate: in almost all FP7 activities and are encouraged to do so. The FP7- Capacities Programme has specific schemes for research relating to SMEs; in pilot and market replication projects in the area of ICT or eco-innovation. CIP Eco-innovation actions mainly targets SMEs (more than 70 % of participants are SMEs); In Intelligent Energy Europe programme; In CIP Financial Instruments (mainly the SMEs). They should contact a financial intermediary located in their country or region. The list of financial intermediaries, and information on eligibility criteria and application procedures, can be found at: The Structural Funds offer many funding possibilities for companies (in particular SMEs). The ESF supports activities that make people more employable by initial and vocational training. ELI

27 EU Funding – combinations
EU funding sources: FP7, CIP and Structural Funds, could be combined, as follows: By Co-financing: General rule - beneficiary (whether a public authority, SME or research entity) also contributes to the cost. The Structural Funds, EFRD, FP7 and CIP have their specific rules on the required level of co-financing. Funds from the European Investment Bank Group (EIB and EIF) can generally be used to finance the national or regional contribution to a project under the ESF. In the case of FP7 or the CIP – given the system of calls for proposals with specific subjects, eligibility and selection criteria, the applicant’s contribution to a project under other funds is in practical terms impossible. By Complementary financing: While co-financing the same project by different EU funds is either prohibited or not practically possible, it is possible to combine the resources of the Structural Funds, FP7 and CIP in a complementary way. This means using different funds for different actions (with separate cost statements/bills), which are carried out in a related or consecutive manner. For instance, the preparatory phase (planning and design) of a research infrastructure project may be financed by FP7 , the construction - by ERDF. After the construction, the use for research activities, including the training of researchers, may be supported by FP7, CIP, ERDFor ESF. ELI

28 Examples of good practices in some EU MS
SMEs are the green champions - calculations by Carbon Trust estimate that businesses waste 26% of all energy they consume. This can be reduced with small adjustments. Lack of information, time and finances can prevent businesses from undertaking energy efficiency measures: UK: An unique new initiative, called Low Carbon Champions (LCC) takes an innovative approach to help SMEs overcome the above problems by creating ‘ambassadors’ to champion carbon reduction programmes. LCC was designed specifically to reduce the need for businesses to rely on external resources, to become self-sufficient and take a long-term attitude to carbon reduction; Denmark: Through a specially created Business Innovation Fund (EUR 100 M for ), the Danish Ministry of Economic and Business Affairs supports SMEs valuable business initiatives in green markets – national and addressed to the Single one. The Netherlands: A Foundation for Knowledge and Innovation in Energy and Environmental Technology was set up - a network of 160 companies, knowledge institutes and public authorities for co-financing projects delivering eco-products and technologies (e.g. smart solar applications, smart grids, etc.). ELI

29 Good practices for turning environmental challenges into opportunities
Belgium, Bulgaria, Cyprus, France, Germany Malta, Portugal, Slovenia and the UK help SMEs upgrade or replace equipment with energy efficient alternatives providing funding through favourable loan conditions or direct subsidies; Bulgaria, Czech Republic, Germany and Slovakia implemented special policy measures and levers to support and stimulate SMEs for developing green products and services. Austria, Belgium, Bulgaria, Germany, Hungary, Spain, Sweden and the UK provide consulting and information services for SMEs and raise awareness of energy efficiency cost-saving and innovative business opportunities. Bulgaria launched Energy Efficiency and Green Economy Programme in April 25th It aims to help SMEs become more competitive in the EU market. The porgramme will be managed by the Ministry of Economy, Energy and Tourism and is supported with a grant of up to EUR 150 M by the EU Structural Funds. The resources will be used to make SMEs undertaking investments in energy efficiency and renewable energy projects reimbursing up to 30-50% of eligible project costs upon successful implementation. A technical assistance will be porvided by the Ministry for the preparation of investment projects. In parallel, the EBRD is launching a new EUR 150 M credit line : Bulgarian Energy Efficiency for Competitive Industry Finance Facility (BEECIFF), for supporting the Programme. This financing will be extended to commercial banks for on-lending to SMEs needing resources for the energy projects implementataion. ELI

30 Good practices outside EU
Examples of resource efficiency supporting initiatives: Japan Started policy on Green Purchasing and the market share of “environmental business” in Japan started rapid increase. The target is to have 30% of private companies applying green purchasing principles in the next 2 years. Establsihed a Green IT Promotion Council as an industry-government-university partnership to promote green IT. It will assist the development of innovative technologies; promote the dissemination of energy-efficient technologies and products; and facilitate the monitoring, reporting and verification of the environmental contribution of ICT. US Created Green Suppliers Network based on cooperation between industry and the US Government. The Network works with large manufacturers to engage their SME-suppliers in low-cost technical evaluations in order to use materials more efficiently. China Implemented a special Law for “creating a 'circular economy‘” requiring low energy consumption and high efficiency, low emissions of pollutants and minimal waste discharge. It uses the '3-R' principle of: reduce, reuse, and recycle. Action is carried out at individual firm level, within industrial parks and clustered/chained industries. The new 5-year plan provides for huge investments in clean technologies. The concept of green GDP is explored. ELI

31 Thank you for the attention!
This is the last slide! Thank you for the attention! ELI site:

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