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Key EU legislation, key EU financing, l ocal experience and best world prаctices

Key EU legislation, key EU financing, l ocal experience and best world prаctices. Dr. eng. Irina Terzyiska European labor institute - ELI. SMEs in EU. S MEs are the back - bone of the European economy being primarily responsible

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Key EU legislation, key EU financing, l ocal experience and best world prаctices

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  1. Key EU legislation, key EU financing, local experience and best world prаctices Dr. eng. Irina Terzyiska European labor institute - ELI

  2. SMEs in EU SMEs are the back-bone of the European economy being primarily responsible for economic growth and playing key role in innovation and R&D. European SMEs: • are 23 M; represent 99% of all businesses, typical SME - a micro-enterprise with less than 10 employees; • provide around 90 M jobs in the single market or 2 out of 3(of the private sector) jobs; • contribute to more than half of the total value-added created by businesses in EU; • > half are engaged in trade, real estate, renting and business; • create largely green jobs- 37% of them have at least one (full or part-time) green employee. ELI

  3. Attitude towards environment SMEs contribute (roughly) 64% to the industrial pollution in Europe. They are largely “green” in terms of compliance withenvironmental legislation: • ¼ have positive environmental behavior: save energy (64%), minimise their waste (62%) and recycle (61%); have an environmental management system ; • 26% offer green products or services; mainlyon the national market (at about 80%); • 58% of SMEs consider the best means to help “greening” of products and services offered are financial incentives . 43% - receive external support for environmental actions, 1 in 10 SMEs - EU support; Problems: lack of expertise, lengthy approval procedures for new products, lack of consumer demand.Training for green skills is essential. Needs:easier environmental permitting procedures, simpler environmentalreporting, one-stop-shops to save time and free or subsidised advisory services. ELI

  4. Environmental Compliance Assistance Programme (ECAP) ECAP (proposed by the EC in 2008) aims to ease SMEsfor improving theirenvironmental performance and to: • minimise the administrative burden; • create accessible tailor-made environmental management schemes forSMEs; • build up local know-how by: capacity building seminars, network of environmental experts and business support organisations; • improve communication; • provideinformation for funding opportunities etc. http://ec.europa.eu/environment/sme/programme/programme_en.htm ELI

  5. Key EU legislation • Europe 2020 Strategy; • Energy Efficiency (EE) Directive (2012); • Energy Performance of Buildings Directive - EPBD Recast (Directive 2010/31/EU; • The Directive 2009/28/EC on Renewable Energy; • Environmnet Impact Assessment (EIA) Directive 85/337/EEC; • Small Business Act (SBA) forEurope (2008); • EU Cohesion Policy of the European Union 2014-2020; • Programme for the Competitiveness of enterprises and SMEs (COSME) 2014-2020; • Horizon 2020. ELI

  6. Key EU legislation Environmental policy- relatively recent EU policy area: • environmental protection was not mentioned in the Treaty of Rome (1958); • the Single European Act (1986) - introduces the principal that environmental protection should beincluded in the EU legislation; • EU environmental policy expanded by the Treaties of Maastricht (1992) and Amsterdam (1997) - thesustainable developmentbecame EU central objectives, it forms a key part of the Europe 2020 Strategy; • the implementation of a Community environmental legislation is to be ensured (inthe first place) by Member States. ELI

  7. Key EU legislation/programmes Europe 2020 Strategy - EU growth strategy for the coming decade It has 5 targets, covering: 1. Employment • 75% of the 20-64 year-olds to be employed 2. R&D  • 3% of the EU's GDP to be invested in R&D 3. Climate change / energy • greenhouse gas emissions 20% (or even 30%, if the conditions are right) lower than 1990 • 20% of energy from renewables • 20% increase in energy efficiency 4. Education • Reducing school drop-out rates below 10% • at least 40% of 30-34 year-olds completing third level education 5. Poverty / social exclusion • at least 20 million fewer people at risk of poverty and social exclusion ELI

  8. Key EU legislation/programmes- 2 And 7 “flagship initiatives” framework for EU and national authorities to support Europe 2020 priorities and both - to coordinate their efforts for: 1. Smart growth • Digital agenda for Europe • Innovation Union - creating more jobs, building a greener society, improving the quality of life and maintaining EU competitiveness on the global markets. • Youth on the move 2. Sustainable growth • Resource efficient Europe – more cost-efficient ways to make the EU economy climate-friendly and less energy-consuming. By 2050, Europe could cut most of its greenhouse gas emissions. Clean tecnologies are the future for Europe’s economy. • An industrial policy for the globalization era 3. Inclusive growth • An agenda for new skills and jobs • European platform against poverty ELI

  9. EU Directives Directives: 1. Energy Efficiency (EE) Directive: • adopted - on the 11th Sept., 2012; • establishes a common framework to ensure the target of 20 % primary energy savings by 2020; • aims to remove barriers impedingEE in energy supply and use. Provisions related to SMEs. MS should: • ensure that energy audits are available for SMEs; • establish a favourable framework for providing SMEs with technical assistance and targeted information; • stimulate the energy performance contracting and the third-party financing arrangements in favour of end-users. Text version before official publication: http://www.buildup.eu/publications/30773 ELI -

  10. EU Directives- 2 2. Energy Performance of Buildings Directive - EPBD Recast (Directive 2010/31/EU): • adopted on 19 May 2010 – a step towardshigher EE efficiency in buildings ; • establishes requirement for new public buildings (from 2018) must consume nearly zero energy, for all new buildings – the demand is from 2020; • agrees a definition of very low energy building as: "nearly zero energy building”- NZEB. It means a building that has a very high energy performance; • sets out a harmonised calculation methodology for minimum energy performance requirements towards a cost-optimal level; • requires MS to ensure that an Energy Performance Certificate is issued when buildings are constructed, sold or rented out and penalties for non-compliance. http://www.eceee.org/buildings/EPBD_Recast ELI

  11. EU Directives - 3 3. The Directive 2009/28/EC on renewable energy (RE): • implemented in MS by December 2010; • sets ambitious targets to EU: to reach a 20% share of RE by 2020 and a 10% share of RE in the transport sector (mainly covered by biofuels); • improves the legal framework for promoting renewable electricity, requires national action plans that establish pathways for the development of RES; • Sets up calculation‘s methofology of the greenhouse gas impact of biofuels and bioliquids; 4. Directive 85/337/EEC, known as 'Environmental Impact Assessment' (EIA) Directive: • ensures that plans, programmes and projects likely to have significant effects on the environment are made subject to an environmental assessment, prior to their approval or authorisation; • requires the projects and programmes co-financed by the EU funds have to comply with the EIA Directive to receive approval for financial assistance -It is a crucial tools for sustainable development. ELI

  12. EU acts for SMEs The Small Business Act (SBA) forEurope (2008) - tool for reaching the objectives of Europe 2020 strategy and the first comprehensive SME policy framework for EU and MSs: • aims to raise SMEs’ awareness on environmentaland energy-related issues; • assists them in implementing legislationand in upgrading their skills and qualifications; • promotes entrepreneurship and anchors the “Think Small First” principle in law and policy making to strengthen SMEs’ competitiveness. SBA is built around 10 principles – friendly environment for entrepreneurs, honest entrepreneurs facing bankruptcy to have second chance, public administrations to become responsive toSMEs’ needs, ease use of State Aidpossibilities for SMEs, help for SMEs to benefit of theSingleMarket, enabling SMEs to turn environmentalchallenges intoopportunities etc. After the SBA Review (2011) a set of new actionswere proposed to meet the challenges of the economiccrisis, and enhance further development in line with the Europe2020 strategy by: • making smart regulation a reality for European SMEs, • paying specific attention to SMEs’ financing needs, • enhancing market access for SMEs, • helping SMEs to contribute to a resource-efficient economy, and • promoting entrepreneurship, job creation and inclusive growth. http://ec.europa.eu/governance/better_regulation/documents/minimizing_burden_sme_EN. ELI .

  13. Further EU acts for SMEs’ support • EU Cohesion Policy of EU 2014-2020: • Its task - to contribute to EU 2020 Strategy of a smart, sustainable and inclusive growth; • The legislative pack (the rules and the priorities) for the policy after 2014 - adopted by the EC in 2011. Further - will be discussed by the Council and EP during 2012-2013. The new Regulations should enter into force in 2014; • The budget for Europe 2020 - focused for providing added value of EU. The overall amount proposed for the period - €1 025 bn; • Future funding for energy policy - €50 bn (for investments to improve transport, energy and digital networks across Europe). The energy sector will benefit from €9.1 bn; • Clear rules elaborated - for better combination of financial instruments and other kind of support (in particular - grants). MS will experience greater flexibility to choose investments and to select the financial instruments. http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm ELI

  14. Further EU acts for SMEs’ support - 2 2. Programme for the Competitiveness of enterprises and SMEs (COSME) 2014-2020. Will run from 2014 to 2020, with a planned budget of €2.5 bn. Objectives: • facilitating SMEs’ access to finances; • creating favourable environment to business creation and growth; • encouraging entrepreneurial culture in Europe; • increasing competitiveness of EU companies; • helping small businesses operate outside their home countries and improving their access to markets. Main beneficiaries • Existing entrepreneurs (small businesses in particular) – easier access to funding for development, consolidation and growth of their business. • Future entrepreneurs (including young people) – assistance in setting up their own business. • National, regional and local authorities – providing tools for effectively reforming policy: EU wide data, best practice and financial support to test and scale up solutions for improving global competitiveness. COSME is expected to contribute to an annual increase of €1.1bn in the EU's GDP. The Enterprise Europe Network is expected to assist 40,000 companies with partnership agreements. http://ec.europa.eu/cip/cosme/index_en.htm ELI

  15. Further EU acts forSMEs’ support - 3 3. Horizon 2020 – a financial instrument implementing the Innovation Union and the Europe 2020 flagships, which: • runs from 2014 to 2020 with an €80 bn budget; • provides major simplification through a single set of rules, combines all research and innovation funding currently provided; • proposes support for research and innovation and will: • enhance EU science with a budget of € 24.598 bn; • promote industrial leadership in innovation with € 17.938 bn i.e by investment in key technologies, greater access to capital and support for SMEs; • provide € 31.748 bn to address major concerns such: as climate change, developing sustainable transport and mobility, making RE more affordable, ensuring food safety and security, or coping with the challenge of an ageing population. http://ec.europa.eu/research/horizon2020/index_en.cfm 4. As EU presidency, Cyprus, will put SMEs at the centre of policy-making. In November it will host Assembly on SME issues, in Nicosia and bring together SMEs; business organisations; EU, national and regional government; academia and the media to discuss how to help SMEs ‘Go for Growth’. ELI

  16. Main funding opportunities to European SMEs EU supports European SMEsin the following forms: • as grants, loans; in some cases - guarantees; • directly or through programmes, managed at national or regional level (such as the EU’s Structural Funds); • non-financial assistance - programmes and business support services. 4 supporting schemes are available: • Thematic funding opportunities - with specific objectives - environment, research, education – by the departments of the EC. SMEs can apply directly; • Structural funds - European Regional Development Fund (ERDF) and European Social Fund (ESF) - the largest Community funding instruments benefiting SMEs, through different thematic programmes, managed at national level; • Financial instruments - available indirectly, via national financial intermediaries. Many of them are managed by the European Investment Fund. • 4. Support for the business and the internationalisation of SMEs - via intermediary organisations – EEN... ELI

  17. Key EU Funding Sectors: Environment, Energy and Transport 1. Programme LIFE +: • contributes to the implementation, updating and development of EU environmental policy and legislation; • co-finances pilot or demonstration projects with European added value; • began in1992, current phase of the program runs to 2013 with global budget of €2.1 bn. Contains3 strands: • Nature and Biodiversity; • Environment Policy and Governance; • Information and Communication SMEs may access LIFE+ funds, both from the part managed centrally by theEC and from the one, managed by national agencies. http://ec.europa.eu/environment/life/funding/lifeplus.htm ELI

  18. Key EU Funding - 2 2. Competitiveness and Innovation Framework Programme (CIP) = anintegrated response to the objectives of the (renewed) Lisbon strategy for growth and jobs. Runs from 2007 to 2013, with a budget of (approximately)€3.6 bn. As regards environment and energy concerns, the CIP comprises: • an Entrepreneurship and Innovation Programme (EIP) with an eco-innovation part. €430 M are allocated for tapping the full potential of environmental technologies; • an Intelligent Energy Europe Programme (IEE) with approximately €727 M. For actions to increase the energyefficiency, to promote renewable energy sources and energydiversification, and to stimulate the diversification of fuels and energy efficiency intransport; • an Information and Communication Technologies PolicySupport Programme (ICT-PSP), with a budget of€730 M for pilot actions (involving both public and private organizations). The aim - to stimulate innovation and competitiveness through the best use of ICT incl. for energy efficiency. http://ec.europa.eu/cip/index_en.htm ELI

  19. Key EU Funding - 3 Sector: Innovation and Research 1. The Seventh Framework Programme for Researchand Technological Development (2007-2013) - FP7 pays special attention to the SMEs through its different programmes: “Co-operation” (circa €32.3 bn), “Ideas” (circa €7.5 bn), “People” (circa € 4.7 bn) and “Capacities” (circa €4 bn): • “Co- operation” programme - SMEs are actively encouraged to participate in all research actions, especially in: Joint Technology Initiatives (JTIs); • "Ideas" programme - open to SMEs Like any other organisation, research teams from SMEs can compete on the basis of excellence ; • “People” programme - encouraging increased SME participation under “Industry-academia partnerships and pathways”; • “Research for the benefit of SMEs” in the“Capacities” aims to strengthen the innovative capacity of European SMEs and their contribution to thedevelopment of new technology-basedproducts and markets.The indicative budget for the SME specific actions is circa €1.3 bn. http://cordis.europa.eu/fp7/home_en.html ELI

  20. Key EU Funding - 4 2. Competitiveness and Innovation Framework Programme (CIP) – as regards innovation and information technologies, the CIP comprises two main strands: • the Entrepreneurship and Innovation Programme (EIP) - aims to improve the conditions for innovation: exchanges of best practices between MS and actions to encourage and promote innovation in SMEs – especially fostering sector-specific innovation, clusters, public-private innovation partnerships and - application of innovation management; • the ICT Policy Support Programme with €728 M - aims to stimulate the new converging markets for electronic networks and services, media content and digital technologies. http://ec.europa.eu/cip/index_en.htm ELI

  21. Key EU Funding – 5 Structural Funds - for reducing disparities in the development of regions, and promoting economic and social cohesion within the EU. EC co-finances regional projectsin the Member States. Direct aid to SMEs to co-finance their investments is only possible in economically less developedregions. Programmes are managed and the projects selected at national and/or regional level! For the period 2007-2013, Strategy and resources of the Cohesion policy, embracing the Structural funds,had three priorityobjectives, witha total allocation of € 347.41 bn: • Convergence: to speed up the economic convergence of the less developed regions (81.54%of the budget); • Regional competitiveness and employment: to strengthen regional competitiveness and attractiveness and help workers and companies to adapt themselves to economic changes (15.94% of the budget); • European territorial co-operation: to strengthen cross-border, transnational and interregional co-operation (2.52% of the budget). ELI

  22. Key EU Funding – 6 European Regional Development Fund ( ERDF) - the largest Community financial instrument Benefiting SMEs - aims to reduce disparities in the development of regions and tosupport Socialand economic cohesion within the EU. ERDF co-finances activities in the areas: • entrepreneurship, innovation and competitiveness of SME (for ex. entrepreneurial mentoring,innovative technologies and management systems in SMEs, eco-innovation, better use of ICT); • improving the regional and local environment for SMEs (for example access to capital for SMEs in the start-up and growth phase, business infrastructure an support services for SMEs, regional and local RTD and innovation capacities, business co-operation and innovation capacities); • interregional and cross-border co-operation of SMEs; • investment in human resources (along with funding from the European Social Fund). ERDF programmes are not directly managed by the ECbut by national and regional authorities. http://ec.europa.eu/regional_policy/funds/feder/index_en.htm ELI

  23. Key EU Funding – 7 Financial instruments - processed through financial intermediaries such as banks, credit institutions or investment funds - intend to increase the volume of credit available to SMEs. 1. Competitiveness and Innovation Framework Programme (CIP) - €1130 M- for financial instruments for 2007-2013, organised under 3 schemes. The schemes are managed on behalf of the EC by the European Investment Fund (EIF): • The High Growth and Innovative SME Facility (GIF) - aims to increase the supply of equity for innovative SMEs both in their early stages (GIF1) and in the expansion phase (GIF2). GIF shares risk and reward with private equity investors, providing important leverage for the supply of equity to innovative companies; • The SME Guarantee Facility (SMEG) provides additional guarantees to guarantee schemes, in order to increase the supply of debt finance to SMEs. • A Capacity Building Scheme supports the capacity of financial intermediaries in some MS. http://ec.europa.eu/cip/index_en.htm http://ec.europa.eu/enterprise/policies/finance/cip-financial-instruments/index_en.htm http://eif.europa.eu/ ELI

  24. Key EU Funding – 8 2. Joint European Resources for Micro and Medium Enterprises (JEREMIE) - a joint initiative of the EC and the European Investment Fund (EIF) with the European Investment Bank (EIB): • aims to improve access to finance for micro to medium- sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and/or other forms of innovative financing; • gives special emphasis to supporting start-ups, technology transfer, technology and innovation funds and micro-credit; • is managed as an integral part of the ERDF: • its projects are selected at national and regional level. http://eif.europa.eu/jeremie/ http://ec.europa.eu/regional_policy/funds/2007/jjj/jeremie_en.htm For access financing of national/regional managing authorities: http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm ELI

  25. Key EU Funding – 9 3. European Investment Fund (EIF) - based on two instruments: • EIF’s venture capital instrumentsconsist of capital investments in venture capital funds and business incubators that support SMEs, particularly those that are newly created and technology-oriented. • EIF’s guarantee instrumentsconsist of providing guarantees to financial institutions that cover credits to SMEs. http://www.eif.europa.eu/ 4. European Investment Bank (EIB) loans - delivered via intermediaries such as commercial banks. They are targeted at tangible or intangible investments by SMEs. EIB loans may also help to provide a stable working capital base to SMEs.The duration of the loans will be between 2 and 12 years, with a maximum amount of€12.5 M per loan. http://eib.europa.eu http://eib.europa.eu/projects/topics/sme/index.htm 5. European Bank for Reconstruction and Development (EBRD) programmes - provides financing to SMEs in 11 countries in central Europe, including new member states. The finance is processed through local banks, leasing companies and equity funds. The funding available is of €847 M from the EBRD, with a contribution from the European Commission of €130 M. http://www.ebrd.com/pages/sector/financial/sme.shtml ELI

  26. EU Funding and EU companies In brief: Micro, small, medium and large Companies could participate: • in almost all FP7 activities and are encouraged to do so. The FP7- Capacities Programme has specific schemes for research relating to SMEs; • in pilot and market replication projects in the area of ICT or eco-innovation. CIP Eco-innovation actions mainly targets SMEs (more than 70 % of participants are SMEs); • In Intelligent Energy Europe programme; • In CIP Financial Instruments (mainlythe SMEs). They should contact a financial intermediary located in their country or region. The list of financial intermediaries, and information on eligibility criteria and application procedures, can be found at: http://www.access2finance.eu/; • The Structural Funds offer many funding possibilities for companies (in particular SMEs). The ESF supports activities that make people more employable by initial and vocational training. ELI

  27. EU Funding – combinations EU funding sources: FP7, CIP and Structural Funds, could be combined, as follows: By Co-financing: • General rule - beneficiary (whether a public authority, SME or research entity) also contributes to the cost. The Structural Funds, EFRD, FP7 and CIP have their specific rules on the required level of co-financing. • Funds from the European Investment Bank Group (EIB and EIF) can generally be used to finance the national or regional contribution to a project under the ESF. • In the case of FP7 or the CIP – given the system of calls for proposals with specific subjects, eligibility and selection criteria, the applicant’s contribution to a project under other funds is in practical terms impossible. By Complementary financing: • While co-financing the same project by different EU funds is either prohibited or not practically possible, it is possible to combine the resources of the Structural Funds, FP7 and CIP in a complementary way. This means using different funds for different actions (with separate cost statements/bills), which are carried out in a related or consecutive manner. • For instance, the preparatory phase (planning and design) of a research infrastructure project may be financed by FP7 , the construction - by ERDF. After the construction, the use for research activities, including the training of researchers, may be supported by FP7, CIP, ERDFor ESF. ELI

  28. Examples of good practices in some EU MS SMEs are the green champions- calculations by CarbonTrust estimate that businesses waste 26% of allenergy they consume. This can be reduced with small adjustments. Lack ofinformation,time andfinances can prevent businesses fromundertakingenergyefficiency measures: • UK: An unique new initiative, called Low Carbon Champions (LCC)takes an innovative approach to help SMEs overcome the above problems by creating ‘ambassadors’ to champion carbon reduction programmes. LCC was designed specifically to reduce the need for businesses to rely on external resources, to become self-sufficient and take a long-term attitude to carbon reduction; • Denmark: Through a specially created Business Innovation Fund (EUR 100 M for 2010-2012), the Danish Ministry of Economic and Business Affairs supports SMEs valuable business initiatives in green markets – national and addressed to the Single one. • The Netherlands: A Foundation for Knowledge and Innovation in Energy and Environmental Technology was set up - a network of 160 companies, knowledge institutes and public authorities for co-financing projects delivering eco-products and technologies (e.g. smart solar applications, smart grids, etc.). ELI

  29. Good practices for turning environmental challenges into opportunities • Belgium, Bulgaria, Cyprus, France, Germany Malta, Portugal, Slovenia and the UK help SMEs upgrade or replace equipment with energy efficient alternatives providing funding through favourable loan conditions or direct subsidies; • Bulgaria, Czech Republic, Germany and Slovakiaimplemented special policy measures and levers to support and stimulate SMEs for developing green products and services. • Austria, Belgium, Bulgaria, Germany, Hungary, Spain, Sweden and the UK provide consulting and information services for SMEs and raise awareness of energy efficiency cost-saving and innovative business opportunities. • Bulgaria launchedEnergy Efficiency and Green Economy Programmein April 25th 2012. It aims to help SMEs become more competitive in the EU market. The porgramme will be managed by the Ministry of Economy, Energy and Tourism and is supported with a grant of up to EUR 150 M by the EU Structural Funds. The resources will be used to make SMEs undertaking investments in energy efficiency and renewable energy projects reimbursing up to 30-50% of eligible project costs upon successful implementation. A technical assistance will be porvided by the Ministry for the preparation of investment projects. In parallel, the EBRD is launching a new EUR 150 M credit line : Bulgarian Energy Efficiency for Competitive Industry Finance Facility (BEECIFF), for supporting the Programme. This financing will be extended to commercial banks for on-lending to SMEs needing resources for the energy projects implementataion. ELI

  30. Good practices outside EU Examples of resource efficiency supporting initiatives: Japan • Started policy on Green Purchasing and the market share of “environmental business” in Japan started rapid increase. The target is to have 30% of private companies applying green purchasing principles in the next 2 years. • Establsihed aGreen IT Promotion Council as an industry-government-university partnership to promote green IT. It will assist the development of innovative technologies; promote the dissemination of energy-efficient technologies and products; and facilitate the monitoring, reporting and verification of the environmental contribution of ICT. US • Created Green Suppliers Network based on cooperation between industry and the US Government. The Network works with large manufacturers to engage their SME-suppliers in low-cost technical evaluations in order to use materials more efficiently. China • Implemented a special Law for“creating a 'circular economy‘” requiring low energy consumption and high efficiency, low emissions of pollutants and minimal waste discharge. It uses the '3-R' principle of: reduce, reuse, and recycle. Action is carried out at individual firm level, within industrial parks and clustered/chained industries. The new 5-year plan 2011-2015 provides for huge investments in clean technologies. The concept of green GDP is explored. ELI

  31. This is the last slide! Thank you for the attention! ELI site: www.eli-energy.com email: eli.bulgaria@gmail.com

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