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EU's Environmental Technologies Action Plan

5 Analysis of the opportunities

5.1 The Context - the Growth Agenda
   5.1.1 The Funding Opportunities
5.2 Technology Platforms
   5.2.1 Criteria for establishment of TPs
5.3 The use of OMC for implementing ETAP
5.4 ETAP and Enterprise Policy
5.5 Summary Recommendations

5.1 The Context – the Growth Agenda

The European Council met in Brussels in March 2004 for its fourth annual Spring meeting on the Lisbon Strategy. The EU SDS, which is in principle supposed to be part of these annual debates, was only mentioned in one line (para 47) where the conclusions states that the preparations of the 2005 mid-term review of the Lisbon Strategy should take account of the forthcoming review of the EU SDS.

In the Summit Conclusions, the 'environment' no longer – compared to previous years - has a section on its own. The new wording is 'Environmentally Sustainable Growth' and for the environmental topics to be picked up at this high political level, it now appears that they have to offer 'win-win' opportunities and preferably have positive impacts on the EU's competitiveness. Though the Conclusions state that the European Council met for its annual meeting on 'the Lisbon Strategy and the economic, social and environmental situation in the Union', growth seems to be the red thread throughout the Conclusions, and the fear that anything could limit this growth seems to substantially have changed the wording compared to previous years.

One such win-win opportunity is environmental technology, which receives considerable attention with an eight lines paragraph welcoming ETAP, and the European Council calls for the plan's rapid implementation.

ETAP offers an opportunity to push an environment agenda in the Lisbon process at a time where environment policy is under pressure. It is important to keep stressing the link between environmental technologies and competitiveness and employment. We can expect a move away from employment in traditional eco-industries such as end of pipe solutions (eg air emissions filters or waste water treatment plant), towards one where there is more employment in clean technologies and resources management (eg water supply, renewable energies).

Currently it has been estimated that there are around 2.5 millions direct jobs supported in the EU-15 in these areas – most of which are currently associated with services and end-of pipe technologies. This figure is nearer 4 million if indirect and supported jobs are taken into account. If the economy further integrates process efficiency technologies and techniques, then the number of environment related jobs can be expected to increase – as what were simply 'jobs' start to be linked to the environment.

However, with the move towards cleaner technologies, it will be increasingly difficult to ascertain which jobs are 'normal' and which 'environmental', and this distinction will inevitably blur. If and when the use of clean technologies becomes pervasive and end-of-pipe solutions less used, then clearly the approach to supporting environmental technologies – if and where still needed - becomes more difficult, and would need to focus on indicators (eg showing nature resource intensity of production), benchmarking, use of national targets etc. This, however, will not be a short or medium term concern.

5.1.1 The Funding Opportunities

EU budget 2007-2013

The Commission Communication ^[21] on the EU's budget for the period after 2007, known as the 'Financial Perspectives' was launched in February 2004. This was the start of a process that will run well into 2005, possibly longer. It has implications for both policy and expenditure, affecting the environmental budgets as well as research and much else.

The Commission proposed a relatively large EU budget for the period 2007-13, although this does not imply higher levels of expenditure on most issues in the existing EU15. The new package was wrapped in the language of the Lisbon Strategy and strategic political objectives such as 'sustainable growth'.

Amongst the notable features of the proposal, in relation to the environment are:

• Future regional and cohesion policies should be driven by the priorities of growth and competitiveness.
• A new budget heading 'Preservation and Management of Natural resources' is established that will include Common Agricultural Policy market measures, fisheries policy and environmental measures and the operational expenditure required for these sectors.
• There is general language about the goals of both environmental and fisheries policy but nothing concrete about expenditure. The EU 'must manage its natural resources as a translation of the European model of growth and cohesion into the management of the environment'.
• A greater contribution to trans-European networks, with reference to 26 priority transport projects and more investment in energy supply, including renewables.
• A new 'financial instrument for the environment' would replace current environmental funding programmes.

The bulk of funding for the environment would continue to come from cohesion, agriculture and rural development, research and development and external assistance programmes, however, the new financial instrument for the environment would be funded grouping together all current budget lines (LIFE, urban environment, Forest Focus, civil protection etc.) in one instrument.

The first formal debate by EU leaders on the budget was scheduled for the Brussels Summit on June 18. The idea is that the Commission subsequently, on the basis of the discussions, prepare the legislative proposals to be adopted in July 2004.

Note, however, that the Commission has made strengthening European research a major objective in the financial perspectives, proposing to double the EU's research budget and since the budget for research is more than 10 times larger than the budget for the environment, it might therefore prove more interesting to keep an eye on the research funds.

EU's Research Policy

On 16 June 2004, the Commission in a new Communication ^[22] proposed orientations for the development of future EU programmes to support research activities and policies. They imply a significant expansion of the budget for the period 2007-2013 as set out in the financial perspectives. Six major objectives are identified:

• Creating European centres of excellence through collaboration between laboratories;
• Launching European technological initiatives;
• Stimulating the creativity of basic research through competition between teams at European level;
• Making Europe more attractive to the best researchers;
• Developing research infrastructure of European interest; and
• Improving the coordination of national research programmes

The ideas presented in the Communication are to be debated ^[23] both within the Institutions and among research stakeholders in Europe. On the basis of the debates, the Commission will present its proposal for the Seventh Research Framework Programme in the beginning of 2005. Along with specific information about the financial support schemes, it is to include the Commissions proposals for thematic research priorities. The 7FP will most likely run from 2006-2010.

As mentioned, significant coverage of ETAP related project is expected in the 7th Framework-Programme for Research and Development – either under directly related areas or under others such as industry, and energy. It is also expected that establishing EU testing networks of environmental technology (eg leading to certificates) will form a cornerstone of the 7th Framework Programme.

Big Funds – small projects

One difficulty for many new innovative projects is often that most of the funds that have substantial budgets are only accessible for projects of a certain size - eg funding from the Cohesion Fund have to involve a minimum investment of €10 million and, as described, the EIB also have difficulties dealing with smaller projects, but have to help this by being engaged with intermediaries banks and finance institutions. Part of the problem can be addressed by suitably 'bundling projects' so that linked or similar projects are grouped, with the total budget passing the eligibility criteria. This has already been used in the Candidate Countries under ISPA funding, and valuable lessons have been learnt there.

To address the problem of large minimum size projects, the European Economic and Social Committee (EESC) has therefore proposed ^[24] that part of the EU aid made available should be paid into a fund used, first and foremost, to finance smaller measures and that consideration be given to introducing a degree of earmarking of funding specifically for investments involving appropriate environmental technologies. A given percentage of funding under the Cohesion Fund could, for example, be set aside for projects involving less than a given level of investment.

5.2 Technology Platforms

The Technology Platforms as such are not formally actions within the ETAP. The idea of creating Technology Platforms came from Research Commissioner Philippe Busquin. It was then picked up by the Commission services and industry, started on a 'learning by doing' process, which means that there are no clear definitions of what a Technology Platform must consist of, so it in some ways there are defined by what they do and who is involved and what they make of it. This is perhaps a little simplistic; in practice each have an overarching ambition of creating a mechanism to move forward with the development of important technologies in Europe.

The aim of the platforms is to help develop a coordinated long-term strategy for developing the technology or marketing its results. As noted by Pierre Henry of the European Commission's Environment DG.

“At the beginning, the different actors are unaware of each other's plans, have no long-term strategy for developing the technology or marketing its results,”

“Therefore, in these technology platforms we first draw up a research agenda together with all the relevant actors, identifying the research needs for the short and medium term, as well as scenarios for market developments in the long term. This should enable all the actors – including the EU – to share in the same vision and to plan their research and investments accordingly.” ^[25]

There are a number of drivers and aspects – see section 4.2.1 - that are to be taken into account when deciding on the setting up of a TP. However, there are no very fixed rules, hence the Commission creates Technology Platforms (see Box 5.2) if there is a need to gather industry in certain areas where one sees a potential for a given technology. However, most of the existing platforms come from industry initiatives. Some financing from the 6FP occurs – eg on fuel cells and some of the work going on in these platforms could eventually also have an influence on how the next FP will look.

Box 5.2: Technology Platforms – Definitions and Selection

The Platforms in Detail

The 'European Hydrogen and Fuel Cell Technology Platform' was launched on 20th January 2004 by the European Commission. Its 'Advisory Council' is composed of major private and public stakeholders in the European hydrogen sector. A core task of the platform is to draft a blueprint to smooth the EU's transition from a fossil fuel-based to a hydrogen-based economy. The creation of the platform followed the presentation of a report by an EU high-level expert group on June 16, 2003, and the inclusion of a hydrogen and fuel cell initiative in the "QuickStart" list of transport and research projects. This list was presented by the Commission on November 11, 2003, in the framework of the "European Growth Initiative" ^[26]

The PV platform's objective is to contribute to a rapid development of world-class, competitive European Photovoltaic (PV) solutions for sustainable electricity production. The context of this technology, from the environmental policy point of view, is that of the climate change. To find the best way forward, and in support of the European Photovoltaic Technology Platform, a Photovoltaics Technology Research Advisory Council (PV-TRAC) has been created in December 2003. In order to address the barriers to maximising the use of this clean energy source, the Advisory Council will produce a foresight report "A vision for Photovoltaics up to 2030 and beyond" and will present it on 28 September 2004 in Brussels. ^[27]

The Steel Platform brings together key European stakeholders including enterprises, research institutes and organisations of steel users. The platform's aim is to help the sector meet the challenges of the global marketplace, changing supply and demand patterns, environmental objectives, and the streamlining of EU and national legislation and regulation in this field. In addition, with EU enlargement, the need for extensive restructuring of the steel industries is even more pressing. The Platform will help identify ways to boost research and innovation and to develop new and cleaner processing methods such as reducing CO2 emissions. ^[28]

The water supply and sanitation technology platform is not yet fully launched. However, a draft report on the platform is available through the Danish mirror group, the Danish Water Forum ^[29].

5.2.1 Criteria for establishment of TPs

Even if there are no official rules in setting up the TPs, there are some written indications to consider. In the staff working paper complementing the 2003 Action Plan for Investing in Research, it is stated that the setting up of TPs should be limited, in the first instance, to areas for which clear and significant benefits can be established. Though sectors have very different characteristics, the common thread should according to the plan be:

1. the potential strategic importance of the sector,
2. the EU dimension and
3. the role of RTD in fully achieving the potential benefits.

The plan mention the following six main drivers as likely to point towards potential candidates for a TP:

• the need to maintain/regain world leadership and enhance competitiveness in the face of stiff global competition through the generation of new RTD;
• the need to develop and assimilate new scientific knowledge and technologies to evolve towards a paradigm shift;
• the need to reconcile different policy objectives with a view to a sustainable development of the sector;
• the need to renew, revive or restructure ailing industry sectors;
• the need to support development of new technology based public goods or services with high entry barriers, uncertain profitability, but high economic and social potential;
• the opportunity to fulfil the potential of new technologies which hold the promise of radical change in a sector, if developed and deployed appropriately and in time. Global competition may condition, accelerate or decelerate development and deployment and will ultimately translate into a struggle for huge (global as well as local) markets, with consequences for the economy, employment and social welfare.

It is striking that the last two bullets do not have environmental potential or consequences for the environment, however, there seem to be plenty of scope for environmental technologies anyway as contributors to competitiveness, to a paradigm shift, to sustainable development – as in the first three bullets.

Other aspects that need to be taken into account in the establishment of selection criteria are also mentioned:

• the identification of a major economic, technological or societal challenge and the pivotal role that RTD can play in addressing that challenge;
• the need for the mobilisation and rapprochement of stakeholders to accelerate progress and optimise the efficient use of resources – particularly where relevant knowledge and activities are fragmented between different Member States and regions;
• the current and projected levels of effort, especially in terms of R&D spending, in relation to the magnitude of the potential socio-economic benefits and the degree of disconnection between the stakeholders, which could benefit considerably from being brought together around a common vision;
• the maturity of the technology or the sector in question;
• the commitment of key players to contribute to the funding of the platform and become actively involved in its development and the execution of its action plan. An initiative coming from a particular sector, rather than from the Commission, could be a good indication of commitment.

Note that it was thought that there will be a formal Communication from the Commission on platforms, but this appears now not to be the case (as explained the above mentioned staff working paper contain information on selection criteria etc., but the document is not a formal Communication), and the Commission experts are still working on how best the platforms can work. There are three potential levels at which they can operate:

1. platforms as a dialogue box across stakeholders and then with the Commission deciding what to take forward), or
2. more joint coordination, or
3. a platform upon which joint undertakings can be launched - people committing funds to projects

It is unclear at this stage, which type of platform will be common, or which platforms may proceed to the third and most significant level. It is thought that of the 20 platforms only a minority will proceed to the third 'stage'. Which level of ambition will be appropriate or reached depends on the technology in question, industry interest, Commission interest and Member State support and initiative.

In addition, European Platforms are not the end-all. It is important to have mirror organisations (basically national platforms) in Member states (eg as exist for water in Denmark ^[30] and Italy – where mirror groups have been set up to link with the European platforms). Note that national mirror groups / platforms can actually precede EU level platforms (as is the case with the Danish Water Forum). This also already works for the Hydrogen platform. It seems therefore that the platform is not just a base, but also plays the role of a hub for other activities.

The process of launching platforms

The selection of platforms and their specific focus reflects different agendas and opportunities, potential markets and hence economic and employment benefits as well as potential environmental benefits. These can coincide – the core aim of ETAP – or indeed clash, as is arguably the case with white biotech that is related to GMOs. It will be important not to lose sight of the overall aim of ETAP, it is not just a technology action plan, but an environmental technologies action plan.

The participants in a TP may include the research community, industry, public authorities, the financial community, civil society, users and consumers. The composition and the 'level' of the participants may vary depending on the sector.

In theory, anyone can suggest a new platform eg on nanotechnology, biotechnology or ICT, however, it might be wise to phrase such a suggestion in wording related to the above main drivers and aspects in order to gain support. The Commission will have the final say if it is to help finance the TP.

It has been suggested that on energy efficiency and renewables there are many ongoing EU as well as Member States initiatives where there could be value added of a Technology Platforms.

5.3 The use of OMC for implementing ETAP

The use of OMC for implementing ETAP will be debated in the coming months. It has eg been suggested that OMC could also be used to further the establishment of 'Performance Targets'. However, there seems to be no reason for this work not to take place within the existing structures of the Community Method, as the Commission could come with a proposal for legislation in this respect and the suggestion therefore seem to confirm that there is and will be a temptation to apply the OMC instead of environment legislation. The broader question on how to avoid a gradual softening of EU environmental policy has to be addressed by eg setting strict criteria for when the OMC can be used.

One such criteria may be to use the OMC only in areas of limited Community competences, such as on fiscal measures for the promotion of environmental technologies. It also seems likely that the OMC will work best if applied to areas where the Member States have an interest in sharing information eg exchanges on best practices.

As mentioned in previous sections, it has already been decided that OMC should be used to pursue the 3% of GDP target for R&D investment. It could therefore be worthwhile exploring the possibility of establishing a guiding target on the extent to which some of these investments should be earmarked towards R&D in environmental technologies.

5.4 ETAP and Enterprise Policy

The uptake and development of environmental technology by enterprise are strongly dependent on the political and regulatory framework that enterprises act within. The following two items have been recognised to be of importance, (likely to be picked up by EU presidency agenda in the near future) if enterprise policies in the future are to contribute to a rapid and successful implementation of ETAP:

• A new Programme of the Competitiveness of Enterprises is to be adopted, replacing the current Multi-annual Programme for Enterprises and Entrepreneurship expiring in 2005.
• Innovate for a Competitive Europe (the new action plan for innovation).

The Commission have come forward with proposals for both the new programme and for the action plan. However, both proposals have very little thinking on the environment as an economic opportunity and limited attention is given to the implementation of ETAP.

It is most likely that both items will be treated in the Council during the Dutch Presidency and it would therefore be important that Environment Ministries in the Member States ensure that actions in support of implementing ETAP are parts of the result of the negotiations on the two proposals.

5.5 Summary Recommendations

In summary therefore, a range of possible recommendations can be made for the appropriate promotion of ETAP and ETAP related issues and Denmark's interests vis-a-vis ETAP.

Constructive efforts can come from all levels of stakeholders – from government officials that currently constitute the high level working group on ETAP; from industry to ensure a real commitment and in cases pressure for the priority actions (PAs) to be implemented and dialogue in the platforms and national mirror groups; to academics in the links to research networks of excellence and to the European Panel on Environmental Technologies (EPET). EPET membership is still an open question, and support can usefully be given to ensure that there is some type of NGO participation; NGOs can be influential in keeping momentum going on the environmental aspects of ETAP.

General Recommendations Regarding Environmental Technologies

• The EU should ensure that it maintains or grows its share of the global eco-industries markets - in services, end-of-pipe applications and clean technologies, whether process or products. The EU has to counter the explicit ambitions of the Japanese in this field, and the expected American ambition.
• EU and Member States should contribute to helping identify and support key new technologies that can offer environmental benefits as well as both domestic economic gains and export markets. This can be done, inter alia, through focused support on this issue in national foresight work – eg green technologies foresight. This will achieve win-win-win situations.
• The scope for supporting/offering appropriate signals for the development and uptake of environmental technologies in existing programmes and funding should be explored and realised. Notably, more emphasis should be given to promoting these technologies through the revised Structural Funds and in the Cohesions funds prioritisation need to better reflect the benefits of these technologies.
• While there is already an expected high level of commitment to environmental technologies in the 7th Framework Programme for Research and Development, support that this actually ends up being the case would be beneficial.
• Finally, it has been shown that the key driver for the development and uptake of environmental technologies is regulation itself. Therefore, particular attention should be paid to putting in place appropriate regulation to support needed technologies.

General ETAP Recommendations

• The 'Open Method of Communication' (OMC) should only be used in areas where there is a true value added as a supplement to EU environmental regulation – eg in relation to investments in cleaner technology and exchange of good practices.
• OMC should not substitute EU environmental regulation and should only be used in areas where competence is shared between the Community and Member States, but progress at EU level is limited due to unanimity voting rules – eg in relation to the use at national level of economic instruments for furthering environmental technologies.
• Member States could push for the annual reports (which are to feed into the Commission Spring Reports) on the 'R&D 3% of GDP objective' to include information on the implementation of ETAP.
• With regard to the technologies covered under the 6FP it would be valuable to have assessments of the environmental achievements in relation to those technologies to clarify which technologies run counter the environmental objectives to clarify where future support is appropriate, and indeed make the programme more internally consistent and avoid contradictions of objectives.
• It is important that experts involved in the implementation of ETAP explore funding opportunities outside the general environmental funding framework as funding here is relatively limited and this seem to also be the case for the next EU budget period (2007-2013). Other budgets are also relevant. ETAP can be seen as an instrument to achieve the Lisbon goals and should therefore be promoted in relation to policies related to the Lisbon Strategy.
• In terms of creating coherent and mutually supportive policies, the Dutch Presidency should ensure that actions in support of ETAP becomes part of the result of the negotiations on the proposal for a new Programme of the Competitiveness of Enterprises and the proposal for a new action plan for innovation.

Possible Recommendations for Danish Stakeholders

• Explore which of the PAs offer the greatest benefit to Denmark and be proactive in encouraging that these PAs be implemented robustly. This includes identifying and communicating cases of best practice that others can learn from.
• Where relevant, and appropriate for Denmark, look at national strategy/measures to support implementation of PAs.
• Consider proactive suggestions as to representatives for the EPET – either permanent or liaisons on special issues, if the EPET is more flexible. The representatives should be constructive and influential.
• Check to see which research networks in Denmark can support the EPET and encourage links of national research networks and programmes to EPET discussions.
• Link in to Dutch activities on ETAP, innovation and policy instruments.
• Explore which national technologies (existing or potential) can have their exports markets developed (eg selling Danish wind power, given interest in clean technologies).
• Develop mirror groups on technologies at a national level to link to the EU platforms – these are the equivalent of national platforms.
• Encourage that platforms are taken seriously and not just talking shops.
• Encourage further platforms if and where appropriate – eg support the concept of the development of a chemicals platform.
• If and where a platform is particularly important for Denmark, communicate early to the Commission potentially important Danish representative for the panel. The Commission is key in the decision as to who is a member of each platform, but its position builds on information it has available.

Footnotes

[21] Commission Communication, Building our common future – Policy changes and budgetary means of the enlarged Union 2007-2013, COM (2004)101, 10.02.2004

[22] Communication from the Commission, Science and technology, the key to Europe's future – Guidelines for future European Union policy to support research, COM(2004)353, 16.06.2004

[23] The Commission will start an open Internet consultation shortly, on: http://europa.eu.int/comm/research/future/index_en.html

[24] Opinion of the European Economic and Social Committee on Realities and prospects for appropriate environmental technologies in the candidate countries, 31 March 2004.

[25] Source: http://www.cordis.lu/itt/itt-en/04-3/prog01.htm

[26] See http://europa.eu.int/comm/research/energy/nn/nn_rt_htp1_en.html

[27] See http://europa.eu.int/comm/environment/etap/photovoltaic.htm and http://forum.europa.eu.int/Public/irc/rtd/pvtrac/library?l=/publicsarea&vm=detailed&sb=Title

[28] See http://www.cordis.lu/coal-steel-rtd/steel/events_stp.htm

[29] See http://www.danishwaterforum.dk/Docs/EC%20Water%20Supply%20and%20- Sanitation%20Technology%20Platform.pdf

[30] See http://www.danishwaterforum.dk/. They have also produced a draft note

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Version 1.0 November 2004, © Danish Environmental Protection Agency