Eco-innovation policy in the European Union

Peter Czaga Unit on Knowledge, Eco-innovation and SMEs Directorate-General for the Environment

Overview:

• Why is eco-innovation relevant?

• The EU Eco-innovation Action Plan

• Financial support programmes

• Other relevant instruments and initiatives

• Eco-innovation and the circular economy

Why is eco-innovation relevant?

• Definition: all forms of innovation activities resulting in or aimed at significantly improving progress towards the goal of sustainable development, through reducing negative impacts on the environment. Not only technologies, but also products, processes, services and business models.

• The largest sub-sectors: renewable energy and energy efficiency, waste management , water supply, wastewater management, and recycled materials

• The triple win:

Environment: innovation needs a problem /we need to change the way we

produce and consume, we need innovative systems

Economy: externalities, the resilience and modernising the economies, job creation, lowering resource dependency

Business: the added value comes from new markets, increased productivity and profitability, attracting investment, staying ahead of standards and regulation.

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Barriers and drivers

• Market is not always conducive to eco-innovation adoption. Role of governments.

• Barriers: uncertainty of return on investment, difficulties with financing, regulations and standards

• We could create more eco-innovation by making sustainable/renewable as a default instead of linear/fossil:

Governments should create a level playing field: tax, subsidies,

externalities priced Consumers, supply chains and finance community should think

sustaibale

Well targeted EU funding: Horizon, COSME, LIFE, regional, EFSI, etc.

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Eco-innovation Action Plan - EcoAP

Action 1 - Environmental policies and regulations Resource efficiency, circular economy; Mainstream in sectors: water, air, waste

Action 2 - Demonstration projects Make the leap to market; Network of procurers

Action 3 - Standards and performance targets Priorities: durability of products, waste, construction materials, insulation of buildings

Action 4 - Finance and support services for SMEs Network of financiers; ETV; Enterprise Europe Network

Action 5 - International cooperation Eco-innovation in bilateral environmental dialogue, strengthen SCP international network, Business & Technology Centres for technology transfer; International EI-Forum (with UNEP)

Action 6 - New skills and jobs EU Skills Panorama mapping green jobs; educational and vocational training schemes

Action 7 - European Innovation Partnerships EU, national and local institutions, experts, stakeholders for fast-track solutions Identified priorities: Agriculture, Raw materials, Water, Sustainable Cities

Support for Eco-innovation

Instruments:

• Networks (Public Procurement of Innovation; Investments)

• Clusters

• Demonstration and Market replication projects

• Financial instruments - equity and debt guarantees

Programmes 2014-2020:

• Horizon 2020

• LIFE+

• COSME

• European Structural and Investment Funds

Inneon

Network for eco-innovation investments

• launched in 2014 – duration 30 months – 2M€

• improves access to funding for green businesses and accelerates commercialisation of eco-innovations

• public and private intermediaries dedicated to European eco-innovation entrepreneurs

• bridges the gap between investors and green small businesses by:

• - attracting new investors to green business sector

• - providing expert coaching to support entrepreneurs in developing viable business models

• - delivering an effective matchmaking service

• more info: www.inneon.eu

Innocat

Network of public and private procurers

• launched in 2013 – duration 36 months – 1 M€

• addresses the fragmented demand for eco-innovative solutions in the catering sector

• 2 public and 2 private buyers to tender eco-innovative catering products, services and solutions (in 2015)

• addresses environmental impacts: transport, waste re-use and recycling, bio-based products and energy-efficient equipment

• purchasing sectors: school and healthcare catering services, vending machines, bio-waste disposal systems

• more info: http://www.sustainable-catering.eu/

Clusters

• Support to innovative SMEs and emerging industries

• Clusters of innovators - business consultancies - market intelligence

• Focus on creativity, cross-cutting technologies, eco-innovative and

resource efficient solutions

http://ec.europa.eu/enterprise/initiatives/cluster/emerging-industries/index_en.htm

Horizon 2020: Cluster facilitated projects for new industrial value chains

(2015 - 24.9M - Innovation in SMEs Work Programme)

CIP: Clusters and Entrepreneurship in support of Emerging Industries

(2013 - 4.3M – 6 projects)

the European Cluster Observatory: information, mapping tools and analysis of EU

clusters and cluster policy with a particular focus on emerging industries

Innovation actions - € ~190M overall (2 yrs) • EU funding rate – 70% (except non-profit, which are still funded 100%)

• plans or designs for new products, processes or services

• prototyping, testing, demonstrating, piloting, large-scale product, market replication

• ‘demonstration or pilot’: validate the technical and economic viability of a new or improved

technology, product, process, service or solution in an operational environment

• ‘market replication’: support the first application in the market of an already demonstrated

innovation (not yet deployed in the market due to market failures/barriers to uptake)

SME instrument - € ~550K-2.5M per project • Single or groups of innovative SMEs bringing innovative business ideas to market

• Provide support from business idea conception and planning (phase I) over business plan

execution and demonstration (phase II) to commercialisation (phase III).

• Phase I (proof-of-concept): explore the feasibility and commercial potential of your new

idea to develop an innovation project (€ 50,000 grant)

• Phase II (develop & demonstrate): develop business idea into market-ready product,

service or process (€ 0,5M to 2,5M grant)

• Phase III (go-to-market): additional EU support to enter the market (no grants)

Funding Programmes: Horizon 2020

Funding Programmes: Horizon 2020

Societal Challenges

• Societal Challenge 5: Climate Action, Environment, Resource Efficiency and Raw

Materials (Waste; Water; Enabling the transition towards green economy and society

through eco-innovation, also through green infrastructure solutions)

• Societal Challenge 2: Food Security, Sustainable Agriculture and Forestry, Marine,

Maritime and Inland Water Research and the Bioeconomy

• Societal Challenge 3: Secure, Clean and Efficient Energy

• Societal Challenge 4: Smart, Green and Integrated Transport

Industrial Leadership

• Leadership in Enabling and Industrial Technologies: Nanotechnologies, advanced materials, biotechnology, and advanced manufacturing and processing

• Access to Risk Finance: easier access, via financial instruments, to loans, guarantees, counter-guarantees and hybrid, mezzanine and equity finance

• Innovation in SMEs: particular support for innovative SMEs

Funding Programmes: Horizon 2020

InnovFin - EU Finance for Innovators • joint initiative launched by the European Investment Bank Group (EIB and EIF) in

cooperation with the COM under H2020

• range of debt and equity products and advisory services - effective boost to availability of finance for R&I activities

• tailored products - from guarantees for intermediaries that lend to SMEs to direct loans to enterprises - helping support R&I projects

• will operate in conjunction with COSME

• financing products available:

• follow-up of FP7 RSFF (Risk-Sharing Finance Facility)- over €11 billion of finance to 114 R&I projects worth more than €30 billion

• expected to make over EUR 24bn of debt and equity financing available to innovative companies to support EUR 48bn of final R&I investments by 2020

Funding programmes: COSME

• access to finance, access to market, supporting the entrepreneurs

• favourable conditions for business creation and growth

• Loan Guarantee Facility

guarantees and counter-guarantees for financial intermediaries

• Equity Facility for Growth

venture capital and mezzanine finance to expansion and growth-stage SMEs

• WP 2017: European Resource Efficiency Excellence Centre

• 'Your Europe‘: database and search function of public and private funds using

EU budget and accessible to SMEs

Funding programmes: LIFE

• WP 2014-17: thematic priorities for resource efficiency, green and circular economy

• implementation of Roadmap for a Resource-Efficient Europe & the 7th EAP

• priority to projects:

implementing the circular economy through actions spanning the value chain or ensuring the use of secondary resources/scrap materials/wastes in other industries or value chains

new business models for resource efficiency (resource efficiency practices in SMEs)

promoting the implementation of the European environmental footprint methodology

linking regulatory, financial or reputational incentives to environmental performance by using EMAS or other environmental management instruments

promoting Green Public Procurement

Why LIFE?

It is the only EU financial instrument fully dedicated to the environment

LIFE has been successfully providing environmental solutions since 1992 (200 projects per year – over 4000 projects funded so far)

Tool to implement the objectives of the 7th Environment Action

Tool to integrate environment into other policies (ex.Marine)

New approach

Replicability Transferability

Uptake

Support to Environmental

Policies

Financial instruments

Capacity building

Preparatory actions

New governance strand

Integrated projects (incl.

Technical assistance, EU

strategies, large

demonstrators)

Traditional projects : award

on quality – replicability and

transferability criteria

LIFE 2014-2020 financial envelope

Total envelope: ~€3.5 billion 75 % for Environment 25 % for Climate Action

Annual available: 400 Mio (2014) to 580 Mio (2020) 81 % are dedicated for action grants

LIFE 2014-2020 - New Tools

Project types: integrated, capacity building,

preparatory projects

Funding types: Innovative financial instruments

Natural Capital Financing Facility (biodiversity

and climate action), Private Finance for Energy

Efficiency (climate action)

Funding rates: 60% of eligible costs

LIFE 2014-2020 – New elements Framework: Multi-annual work programmes

(4+3 year MAWPs) giving selection framework →

direct application

no annual or national priorities

Actors:

Executive Agency for grants except ENV Integrated Projects

EIB/intermediary banks for financial instrument

National Contact Points (NCP) for counselling and guidance

More LIFE Projects…

• On the LIFE Database

Search by:

• Themes

• Keywords

• Free text

• …

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Other support initaitives

• Eco-Innovation Website

http://ec.europa.eu/environment/ecoap/

• European Business Awards for Environment

• http://ec.europa.eu/environment/awards/index.html

• Eco-Innovation Forum

• http://ec.europa.eu/environment/ecoinnovation2016/1st_forum/index_en.

html

• Eco-Innovation Scoreboard

• http://ec.europa.eu/environment/ecoap/scoreboard_en

• Innovation deals https://ec.europa.eu/research/innovation-deals/index.cfm?pg=home

• Any innovator, or group of innovators seeking to introduce a circular economy-

related product or service to the market but has encountered a perceived regulatory

obstacle was invited to apply for an Innovation Deal.

• Environmental Technology Verification scheme (ETV) • http://ec.europa.eu/environment/ecoap/etv_en

• The verification procedure allows for an independent assessment and validation of

the manufacturer's claims on the performance and environmental benefits of their technology.

• DG ENV pilot project on capacity building on SMEs and eco-innovation for regional and national support organisations

Circular Economy

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Circular Economy

Transition towards a

Circular Economy

The value of products, materials and resources is maintained in the economy

for as long as possible

Waste generation is minimised

Brings business, economic, social and environmental gains

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Circular Economy Package, Dec 2015

Action Plan Communication

List of Follow-up Initiatives (Annex)

4 Legislative proposals on waste

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Under debate at the Council and at the European Parliament

1/3 of the actions are being

implemented

Key action areas

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Production

• Provide incentives to boost circular product design

• Innovative and efficient production processes

Consumption

• Allow consumers to identify products that have a reduced environmental impact throughout their lifecycle

Waste Management

• Improve waste management in line with the EU waste hierarchy

• Address existing implementation gaps

• Provide long-term vision and targets to guide investments

Market for a Secondary Raw Materials

• Improve knowledge of material stocks and flows

• Boost the demand of secondary raw materials

• Increase the use of recycled nutrients and the reuse of treated wastewater

• Safely manage risks of chemicals of concern

Innovation and Investment

• Create the right environment for innovation and investment

• Horizon 2020: https://ec.europa.eu/programmes/horizon2020

• Participant Portal: http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020

• LIFE: http://ec.europa.eu/environment/life

• COSME: http://ec.europa.eu/growth/smes/cosme

http://europa.eu/youreurope/business/funding-grants/access-to-finance

• European Structural and Investments Funds: http://ec.europa.eu/regional_policy/en/funding

• Guide to Research and Innovation Strategies for Smart Specialisations (RIS3)

http://ec.europa.eu/regional_policy/sources/docgener/presenta/smart_specialisation/smart_ris3_2012.pdf

• Connecting Smart and Sustainable Growth through Smart Specialisation:

http://ec.europa.eu/regional_policy/sources/docgener/presenta/green_growth/greengrowth.pdf

• Enabling synergies between European Structural and Investment Funds, Horizon

2020 and other research, innovation & competitiveness-related Union programmes

http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_en.pdf

• EIB: http://www.eib.org/products/blending/innovfin

• EIF: http://www.eif.org

• Investment Plan: http://ec.europa.eu/priorities/jobs-growth-investment/plan

• INNOCAT: http://www.sustainable-catering.eu

Links

Thank you for your attention!

http://ec.europa.eu/environment/ecoap/index_en.htm

http://ec.europa.eu/environment/circular-economy/index_en.htm