Proposed change in EC funding threatens “energy transition projects”

(eceee news, 26 Feb 2019) The proposal to move the European Commission’s funding for energy transition “market uptake” and “capacity building” programmes from Horizon 2020 to the LIFE programme, may end with much weaker funding. Trilogue negotiations are planned to end tomorrow, 27 February, and proposed rates of 60% co-funding would deter many organisations from applying for grants. Some last-minute efforts are underway to find solutions, but the outcome is far from certain.

Despite the intentions to create a well-funded and ring-fenced programme with one billion euros in funding, there is a now a risk that the current funding levels of 100 percent support and 25 percent overhead (as under today’s Horizon 2020 funding regime) will be turned into 60 percent funding levels with a much smaller overhead, starting 2021.

“A rate of 80-100% for the Clean Energy Transition sub-programme is absolutely necessary in order to continue attracting active regions, cities, energy agencies and similar organisations involved in sustainable energy capacity building and market uptake actions. The clean energy promoters will not be in a position to engage with the LIFE programme without such support levels”, said Filip Dumitriu,  project officer at FEDARENE, on behalf of the European Federation of Agencies and Regions for Energy and the Environment.

“We believe that the conditions should be the same as for Horizon 2020 projects – 100% funding and 25% overhead. The fact that programmes move to LIFE doesn’t change the situation of the grantees”, said Nils Borg, eceee’s Executive Director. “eceee has also benefitted from market uptake grants, and with 60 percent co-funding and a marginal overhead rate, it is unthinkable that eceee would have joined as a partner in such projects”

Current Trilogue negotiations are reportedly trying to find a solution. The last round of negotiations is scheduled for tomorrow, Wednesday 27 February. One solution is to create a special solution for energy transition projects that would allow them to get full funding, as opposed to the typical 60% funding of LIFE projects.

One would think that following up on the Commission’s intention would be in the interest of MEPs in the environment committee and Member States. However, the issue appears to be more complex.

LIFE is a different environment with different rules

Until now, market uptake and capacity building projects are supported by Horizon 2020 funding. Horizon 2020 is primarily a vehicle for funding research. These projects close to the market have reportedly often had to defend themselves and their place within Horizon 2020.

In the spring and early summer 2018, the European Commission proposed creating a one-billion-euro support programme for energy transition projects (market uptake and capacity building). By creating a dedicated, ring-fenced, programme within LIFE, EU’s large environmental programme, energy transition activities would have a safe harbour for many years, it was believed. The Commission did not specify funding levels in the proposal, and let this to be decided later on in the legislative process between Commission, Parliament and the Council of Member States.

Since LIFE projects are typically capped at 60%, the Parliament’s Environment Committee proposed similar funding for the new kind of energy transition programmes. However, they are very different in nature. “Whereas LIFE often deals with bricks, these market uptake programmes typically deals with brains” a representative at the Commission explained. While a LIFE-supported project may have large local funding and support large-scale projects for biodiversity in the range of millions, a market uptake or capacity building project is typically in the range of 1–2 million euro, lasts for 2–3 years and has ambitious but uncertain outcomes.          

Key actors in the Trilogue

Key actors in the tilogue negotiations are in the ENVI committee of the European Parliament (see here), specifically the Rapporteur Gerben-Jan GERBRANDY (NL), the shadow rapporteurs: Michel DANTIN (FR), Nicola CAPUTO (IT), Younous OMARJEE (FR overseas), Benedek JÁVOR (HU), and Eleonora EVI (IT). From the Member States, national representatives in the Ministries of Environment and the Brussels National Representations are key. From the Commission both DG Environment and DG Energy are involved.