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European Commission EU financial programmes in support of eco-innovation Hervé Martin – Aurelio Politano LIFE Environment & Eco-innovation unit DG Environment.

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Presentation on theme: "European Commission EU financial programmes in support of eco-innovation Hervé Martin – Aurelio Politano LIFE Environment & Eco-innovation unit DG Environment."— Presentation transcript:

1 European Commission EU financial programmes in support of eco-innovation Hervé Martin – Aurelio Politano LIFE Environment & Eco-innovation unit DG Environment European Commission

2 European Commission What will we focus on? Main financial programmes and instruments supporting eco-innovation and managed at European level Not dealing exclusively with research, but with post- research financing close to commercialisation Traditional forms of financial support (i.e.: grants) as well as more innovative ways (i.e.: so called financial instruments)

3 European Commission So which ones?

4 European Commission LIFE

5 LIFE is a funding instrument that provides specific support for the development and implementation of Community environmental policy Individuals, public and private bodies, NGOs can participate and be beneficiaries Preceding programmes: LIFE I, II, III ( ) Total EC contribution 1.6 Billion. LIFE+ budget of billion ( ) It comprises three components: - LIFE+ Nature & Biodiversity - LIFE+ Environment Policy & Governance - LIFE+ Information & Communication Life + - Background - European Commission

6 LIFE+ is centrally managed by the EC Annual call for projects (next deadline June 2011) Projects proposals normally include a total budget between 1 and 3 million Euro but there is neither a minimum nor a maximum Independent selection procedure (about 8 months) Best projects are co-financed A fixed share of the total budget for each Member State (if projects from a MS pass the selection) 50% of the budget is reserved for LIFE+ Nature & Biodiversity projects Co-financing rate: 50% of eligible costs (75% in some cases, i.e. conservation of priority species and habitats) The EC follows up the project implementation Life + - Background - European Commission

7 LIFE+ Environment Policy & Governance continues and extends the former LIFE-Environment strand. 13 priority objectives : Climate change, water, air, soil, urban environment, noise, chemicals, environment & health, waste, natural resources, forest, innovation, strategical approaches, governance LIFE+ Env - How? - European Commission

8 LIFE+ Environmental Policy and Governance co-finances projects that contribute to: – innovation and demonstration – the implementation of Community environmental policy – the development of innovative policy approaches, technologies, methods and instruments, – the knowledge base as regards environment policy and legislation – the monitoring of environment (including forest monitoring) – LIFE+ aims to support innovative and demonstrative solutions both in the public and private sectors LIFE+ Env - How? -

9 LIFE I, II, III ( ) Nearly 2800 projects LIFE+ ( ) About 550 projects co-financed A total of about 3350 projects ( ) LIFE Environmental Policy & Governance More than 1800 projects (55% of the whole LIFE) SMEs and large enterprises are/were co-ordinating beneficiaries of about 13% of projects under this strand Target on municipalities, public actors, enterprises, NGOs aiming to develop and demonstrate innovative policy approaches, technologies, methods and instruments Results so far? European Commission

10 Examples European Commission Zaragoza: water saving city. Small steps, big solutions Coordinating beneficiary: City of Zaragoza The aim of the project was to reduce household water consumption in Zaragoza by 1,000,000 m3 in one year This target has been achieved by changing consumption patterns and through the effective use of water saving technology. The project involved government, social bodies, business and consumers.

11 EFFENERGY ( LIFE06 ENV/L/000121) : Energy efficiency insulating against climate change The project developed a thermal-mass panel made of wax. The wax melts, absorbing heat,as temperatures rise and re-solidifies,releasing heat back into the internal environment, as temperatures cool. Results: Summer - the panelled attic enjoyed a temperature decrease of up to 7°C Winter - the energy required to keep it at a constant temperature of 20°C was 8% less. Panels may be retrofitted into existing buildings Return on investment remains under 10 years ces/life_project/index.html ces/life_project/index.html Examples European Commission

12 More integration with other EU funds CAP, Cohesion Funds, Structural Funds, Competitiveness and Innovation Programme A clearer differentiation between LIFE+ and CIP Eco- Innovation market replication projects A programming approach for facing environmental issues at a larger territorial scale A better networking and communication for the dissemination of results Life+ - Some lessons and food for thought European Commission

13 Where to find more information on LIFE? – Programme publications – Projects (lists of projects with links to more information) – Best projects – LIFE project database – LIFEnews features – LIFE project publications – Contacts European Commission

14 Competitiveness and Innovation Programme

15 CIP - Background - European Commission Entrepreneurship and Innovation Programme (EIP) Information Communication Technologies Policy support Programme (ICT PSP) Intelligent Energy Europe (IEE) Better access to finance for SMEs through venture capital investment & loan guarantee instruments Business & innovation support services delivered through a network of regional centres Promotion of entrepreneurship & innovation Support for eco-innovation Support for policy-making that encourages entrepreneurship & innovation Developing a single European information space Strengthening the European internal market for ICT & ICT- based products & services Encouraging innovation through the wider adoption of & investment in ICT Developing an inclusive information society & more efficient and effective services in areas of public interest Improving of quality of life Fostering energy efficiency & the rational use of energy sources Promoting new & renewable energy sources & energy diversification Promoting energy efficiency & new energy sources in transport ~2,17 B~0,73 B

16 Financial instruments 228 million Network of actors 10 million Pilot and market replication projects 195 million Eco-innovation in EIP European Commission CIP - Background II -

17 Support innovative ideas which can be turned into marketable green products and services Bridging the gap between RTD and commercialisation Potential for replication and wider application must be demonstrated Direct funding (no intermediaries) Risk sharing for green ideas (50% per project) Budget ~ 200 million ( ) Managed by the Executive Agency for Competitiveness and Innovation (EACI) Eco-innovation market replication projects -How?-

18 Non exclusive, annually fine-tuned, supporting policy objectives in the areas of: Materials recycling Sustainable building products Food and drink Greening business/ smart purchasing Priorities Eco-innovation market replication projects -How?-

19 Proposal Received Yearly increase + 50%+ 42% Projects funded 4346/ Important attention from the market, mainly SMEs More than 1000 web enquiries answered every year Results so far?

20 SME LARGE Enterprises Universities/Public/Others Our beneficiaries (Source: call 2010) 81% private sector Beneficiaries Results so far?

21 21 Resource Efficiency Examples CFT: Ceramic tiles dry cutting system assisted by ultrasound – sq.m/year production line – 100% in water consumption and sludge generation – 98% Energy Consumption – 90% Processing scrap, sound pollution (from -3 to -5 dB) EuroC2C Carpetchains: Close loop manufacturing system to collect and recycle 4% (16k t/y) of European contract market carpet waste (offices/public buildings…) – reduce the use of virgin materials by 8,000 tons per year; – reduce energy consumption by 72,000,000 kWh per year, corresponding to the average energy consumption of 3,200 households. – 8% (32k t/y) of European carpet waste 2 years after the project

22 European Commission Eco-innovation market replication projects -Some lessons and food for thought- Market failure justifies public support for placing eco-innovation on the market Stress on innovation AND commercialisation making use of research results Flexibility in the covered areas without losing focus (non-exclusive priorities and not only focussed on technologies makes it open for market-driven innovative ideas) Direct funding, no intermediaries and short time to contract high SMEs participation A proof of concept that economic and environmental problems may be tackled together Can a programme like this reach a critical mass, given the limited budget?

23 European Commission Financial Instruments (FI) -How?- High Growth and Innovative SME Facility (GIF): it allows Community participation in Eco- innovative risk capital funds which provide equity to SMEs (GIF1 seed or early development, GIF 2 expansion) No direct funding to SMEs, but investment through European Investment Fund in funds active in the field of eco-innovation

24 European Commission Results so far? Four deals with eco-innovative Venture Capital (VC) Funds: – Capricorn Cleantech Fund (Belgium) – Wheb Ventures Private Equity Fund 2 (UK) – Pinova Fund 1 (Germany) – Demeter 2 (France) Geographical focus of the funds is mainly western Europe (particularly Germany, UK, France, Belgium and Austria) Development stage focus ranges from start up (first 2 funds) to expansion (remaining ones) EIF is in negotiation for further deals with VC funds targeting eco-innovative SMEs, outlook is positive

25 European Commission Examples

26 European Commission GIF- Some lessons and food for thought Instrument justified by strong market failure rationale of start-up and growing SMEs across the EU (EIP mid term evaluation) Very efficient form of intervention (EIP mid term evaluation) Absorption capacity driven, and limited by different conditions of VC market and existence of eco-innovation Focussing only on high growth commercially viable eco-innovative SMEs, what about the rest? Cleantech VC funds usually go for relatively big investments, what about the rest? BAs can apply under GIF, but there is not much uptake Monitoring the environmental performance of eco-innovative SMEs is a challenge

27 European Commission Informative sources

28 European Commission RSFF

29 The Risk Sharing Finance Facility is an innovative FP7 debt-financing instrument co- developed by the EC/ EIB to provide additional loan finance for Research, Development, Demonstration and Innovation in the European Research Area RSFF provides loans for riskier but creditworthy RDI projects by risk-sharing between the European Community and the EIB Demand-driven: projects are supported on a first come, first served basis (no grant procedures, no expert panels) RSFF projects are evaluated by the EIB (not by the EC) for their creditworthiness, technical and economic aspects European Commission (DG RTD, co-operation with other DGs) checks RSFF projects proposed by the EIB whether they concern R&D and contribute to FP 7 objectives; if so (Commission approval), the EIB can use FP 7 budget for risk coverage RSFF - Background - European Commission

30 RSFF - Background - European Commission

31 RSFF - How? - European Commission

32 RSFF - How? - European Commission

33 Up to EUR 10 billion loan finance for RDI can be mobilised So far, more than EUR 8 billion already approved and more than EUR 5 billion signed Results so far? Signed RSFF Projects by Sector European Commission

34 Examples European Commission

35 Customised offer: flexible debt financing adapted to project implementation and the borrowers repayment capacity Implemented in an effective and efficient manner through a close partnership between the European Commission and the EIB Reasonable financing costs: non-subsidised loans but advantage of EIBs AAA based funding and its non-profit lending policy > reduces overall project cost Potential for improvement: Some target groups (SMEs and research infrastructures but also universities) not reached sufficiently (due to more risky characteristics, nature of investments and legal barriers) the Commission and the EIB have already started working on improvements for SMEs and similarly for research infrastructures RSFF - Some lessons and food for thought European Commission

36 Informative sources DG RTDEIB

37 Many and different programmes and instruments already exist From more traditional to more sophisticated ones Market driven vs policy driven, can we better combine the two? Challenge is to adapt them to better suit the needs of early stage eco-innovative SMEs or To develop new ones if gaps exist Can more synergies be created among these different programmes? Concluding points European Commission

38 Informative sources Thank you DG Environment Life Environment and Eco-innovation unit - E4 -

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