Category: Public debate

Apr 25 2016

Forms of financing

The idea that ETS Innovation Fund money could be handed out in the form of refundable finance is barely considered in the March 2015 public consultation responses, but it is given serious consideration by the EC, featuring as ‘Option 2’ in its Impact Assessment (see section 8.1.4). Svebio was one of the few organisations to comment on it: “One should consider changing NER financing to an investment support scheme for innovative carbon technologies, and set up an investment fund administered by EIB.” Rockwool is similar: ETS Innovation Fund “needs to be better aligned with other policies and measures where investment efforts are focused on the most cost-effective areas. Good examples can be found in the off-the-shelf financial instruments now being developed to help innovative business models develop in industry as well as in the buildings renovation sector, where public funding (guarantees) and financing are needed to leverage private financing in the European Fund for Strategic Investments (EFSI).”

Scotland Europa: “Its modalities should set minimum parameters which allow packages to be designed to fit projects. This would better take account of the differences for each sub-sector. Flexible risk funding would attract private investment. […] This was shown to work for Scotland (Pentland Firth)”.

WWF + 8 environmental NGOs: “De-risking (venture) capital and debt by grants and loans as a tool to facilitate access and enhance entrepreneurship and the market readiness of low-carbon products and processes [should be an aim of ETS Innovation Fund].”

Estonia: “We suggest to consider the approach where the EIB alone or EIB together with the Member State are co-guarantors of the project. The risks would be shared so that the risk of the Member State will not exceed 50% and will enable the project to receive crucial pre-operation investment.”

Apr 25 2016

DG CLIMA conference on ETS Innovation Fund

The European Commission will host a High Level Roundtable on Low-Carbon Innovation on 9 June in Brussels. The Director General of DG CLIMA, Jos Delbeke, has invited senior people from some organisations to attend in person. His invitation says the roundtable “will enable an exchange of ideas on how to make best use of the opportunities to be provided by the Innovation Fund”. It will be webstreamed here.

  1.’s comment

    ***UPDATE 19 June 2016: The SET Plan did, in the end, get a look-in at the roundtable. One of the speakers was Sweden’s delegate to the SET Plan Steering Group, Lars Guldbrand.***

    Neither the invitation nor DG CLIMA’s corresponding webpage make any reference to the SET Plan. The roundtable is not listed in the SET Plan Steering Group’s schedule of meetings, nor was the Steering Group informed of it at its most recent meeting on 13 April. For many stakeholders and Member States the SET Plan and SPIRE are the first places to look for ideas for ETS Innovation Fund.

    The apparent mutual lack of awareness suggests there is still much to do to get DGs ENER and RTD to talk to DG CLIMA and vice versa. Stakeholders have commented on this.

Apr 25 2016

Money spread evenly to all countries?

Small member states, in particular, speak up in favour of maintaining the rules of NER300 that limited the amount of projects a single country could be awarded.

NER300’s rules related to spreading projects between countries were very soft. While it is true that Article 8 (4) stipulated “at least one […] project shall be funded within one Member State”, this was on condition that that project had already been selected as a winning project by the usual mechanisms of proposal evaluation. The rule was therefore redundant.

In favour of spreading the money
between many countries
Keen to allow the concentration of projects

Member States:

  • Hinted at in the European Council’s 23-24 Oct 2014 Conclusions, “Investment projects in all Member States, including small-scale projects, will be eligible”.
  • Stated in the MSR Decision reached between the European Parliament and Council, which was published in the Official Journal on 6 Oct 2015, “… with projects in all Member States including small-scale projects…”
  • Spelt out in the public consultation closing March 2015:
    • Estonia: “Estonia also believes that the new fund should still follow the principle of even geographic allocation of the available financing”
    • Czech Republic: “Also, regional distribution of beneficial projects among Member States should be promoted so that ideally every Member State has at least one project selected.” [Remark: NER300 contained this rule (see introductory paragraphs) but with a caveat that rendered it inoperable. The Czech Republic did not protest at its weak implementation.]
    • Anonymous member state: “The aspect of geographical balance in selection of projects should be strengthened.”
  • Stated at the Environment Council 26 Oct 2015: Bulgaria, Lithuania and Slovakia
  • Fortum and Svebio both say, “There should not be any earmarking between Member States,” with Svebio adding, “The selection of projects should be solely based on their merits.”
  • Projekt21plus says, “For serious progress in innovation and in reaching a lower level of emissions, it should be free how many projects are supported by the new NER400 programme, even at the risk of concentrating several projects just in a few number of Member States.”

  • CEEP: “Countries with GDP below 60% of the EU average, should be given priority in access to such funds.” [Remark: This will be the explicit aim of a parallel ETS funding scheme, the Modernisation Fund, detailed in proposed new Articles 10c and 10d of the ETS]

The Impact Assessment says, “[The minimum of three projects per Member State] could be maintained or adjusted to 4 projects per Member State, dependent on other design features such as the maximum funding rate and the resulting total number of projects. This element will be subject to a future implementing measure and will be assessed in this context.”