DIRECTORATE-GENERAL ENVIRONMENT
Directorate B - Nature, Biodiversity & Land Use
ENV.B.2 - Biodiversity
ENV.B.3 - Nature
CGBN
Co-ordination Group
for Biodiversity and Nature
14thmeeting – 21/03/13 /
Agenda item 4.1
Financing Biodiversity and Nature – The new multiannual financial perspective.
General Overview
(DOC.4-1)
1. Introduction
An overview of the state of negotiations on the 2014-2020 multiannual financial framework (MFF) was provided in the Nature Directors Meeting of 17-18 September 2012. The objective of this paper is to provide an update on the state of play of negotiations on specific instruments since then, as well as on horizontal issues such as the use of financial instruments for biodiversity-related projects, and tracking biodiversity-related expenses in the next budget. It should be read in conjunction with Document 4.2 which develops Nature-specific financing issues in more detail.
The CGBN is invited to provide their perspective on the state of play of negotiations and the Partnership Agreements and programmes process, as well as feedback on the issue of the use of financial instruments and tracking in the next budget.
2. State of play of negotiations in main policy areas
The European Council conclusions on the 2014-2020 MFF were adopted on 8 February 2013 (see amounts in comparative table in annex 1). There has also been progress in parallel in the negotiations in specific policy areas. This section provides an update on developments in the main policy areas, as well as an update on the process for the Partnership Agreements and programmes.
Common Agricultural Policy
The objective of the Irish Presidency is to find a general, overall political agreement with the European Parliament on the CAP reform by end of June 2013. The political agreement reached at the 7-8 February European Council on the next MFF is an important milestone in this process as it opens the way for the Council to negotiate with the European Parliament and to obtain its consent for the next MFF. The heads of government have given a positive message with respect to their commitment to greening; but there are other aspects of the heads of government outcome that are less positive for environment, such as the flexibility on greening, the cut in rural funding and the possibility for Member States to transfer 15/25% of rural funding into direct payments. The original greening concept has been weakened by stipulating that Ecological Focus Areas (EFAs) could be farmed. The European Council did not pronounce itself on certain other issues relating to greening although it did say that there should be 'a clearly defined flexibility for the Member States relating to the choice of equivalent greening measures'.
Regarding discussions within the European Parliament, the main issues of the Comagri vote on 23-24 January include:
On Direct Payments:
• Greening of Direct Payments was made lighter with greater flexibility, ecological focus area ('EFA') obligation applies as from 10 ha, and the EFA percentage would be introduced progressively (3% initially, 5% two years later and 7% after 4 years). EFAs would also include areas with crops on which no fertilizers/ pesticides are used; farmers located in Natura 2000 would be “green by definition”
• Flexibility between Pillars: increased % for transfers on both ways
On Rural development:
• Greening is deleted from the baseline for agro-environment-climate measures which would limit the opportunity to achieve better environmental results. Moreover, there would be a possibility to support the same operations under both pillars of the CAP ('double-funding');
• Inclusion of greening in the baseline for Natura 2000 payments (Art 31);
• Introduction of a legal obligation to spend at least 25% of the total EAFRD contribution on agri-environment-climate measures and organic farming (Art. 65);
On Horizontal regulation (Financing of the CAP)
• Good Agricultural and Environmental Condition of land: deletion of some standards on soil but introduction of a standard on semi-natural grassland
• Statutory Management Requirements: deletion of some requirements but reintroduction of the bird directive.
• Penalties for non-compliance with greening are not set beyond the 30 % greening payment, which indirectly makes the greening voluntary for farmers.
Cohesion Policy
Negotiations are now in the stages of regular trilogues with the European Parliament and Council/Presidency – in total 16 have been undertaken so far for the CPR, 5 for the ERDF, 2 for CF, and also for the other funds. An inter-institutional agreement is expected in February/March 2013 and formal adoption of the package before summer 2013.
In the European Council Conclusions of 8 February 2013, the expenditure under sub-heading 1b ("Economic, social and territorial cohesion") is set at EUR 325.15 billion, compared to 354.81 in the current MFF which means a decrease of -8.4% (see annex 1). Globally, the share of the Cohesion policy in the total EU budget decreases as well (from 35.7% in 2007-13 to 33.8% in 2014-20). Resources will be allocated as follows:
Cohesion Policy in 2014-20 (in billion EUR, prices 2011)
Less developed regions / 164.279 / 51%Transition regions / 31.677 / 10%
More developed regions / 49.492 / 15%
Cohesion Fund / 66.362 / 20%
Outermost regions / 1.387 / 0%
European territorial cooperation / 8.948 / 3%
Total / 325.149 / 100%
The conclusions also foresee that EUR 330 million of the Structural Funds resources for the Investment for growth and jobs goal will be allocated to innovative actions at the initiative of the Commission in the area of sustainable urban development, which may provide opportunities for financing Green Infrastructure in urban areas. This complements the Commission's proposal that a minimum of 5 % of the ERDF resources allocated to each Member State shall be invested in integrated actions for sustainable urban development implemented through the Integrated Territorial
Investment (ITI) tool.
Fisheries Policy
The negotiations on the European Maritime and Fisheries Fund (EMFF) are closely linked to the reform of the Common Fisheries Policy (CFP). The Council agreed a general approach on the revised CFP in June (12/06/2012) which inter alia proposes the achievement of MSY by 2020 and to adjust the discard-ban provisions proposed by the Commission. Fisheries Ministers, at the meeting of the Council of 28 January 2013, fully endorsed the ambitions of the Irish Presidency to reach a political agreement on the reform of the CFP before mid-2013. The Agriculture and Fisheries Council meeting of 25-26 of February finalized the General Approach, thus complementing the results obtained in June 2012. On the basis of the General Approach agreed, trilogues negotiations will begin as soon as possible with the European Parliament.
The Council managed to reach a 'Partial General Approach’ on the EMFF on 23 October 2012 (albeit with DE, BE, MT and LT opposed to the compromise text). The most controversial issues among Member States remained the funding of scrapping measures, compensation for definitive and temporal cessation of fishing activities and support for construction of new vessels. The Commission indicated that its proposal remains on the table for upcoming negotiations with the EP.
In the European Parliament the PECH Committee (Rapporteur: Alain Cadec (EPP)) held an exchange of views on the EMFF on 12 of July and presented the draft report on 19/09/2012. The discussion in the committee revealed a split in the EPP group, related to subsidies for the building of new fishing vessels. The deadline for amendments was until 10/01/2013. The vote in the PECH Committee is scheduled for 23/04/2013. The vote in plenary is tentatively scheduled for June 2013. ENVI, EMPL, BUDG and REGI committees prepared draft opinions on the EMFF. TRAN decided not to give an opinion. It is unclear at this stage what consequences the changes in the CFP introduced by Council would have for the financing of environmental measures under the EMFF.
Horizon 2020
The new programme for Research and Innovation – Horizon 2020 (H2020) –, currently still debated in the inter-institutional process, is divided in three main parts:
1. Excellent Science (mainly bottom up activities) to support outstanding science
2. Industrial leadership (to support industrial technologies, SMEs and access to risk finance
- "Societal Challenges". Research on biodiversity and ecosystems can be expected to be mainly funded via 2 of these challenges: "Food security, sustainable agriculture, marine and maritime research and the bio-economy" and "climate action, resource efficiency, and raw materials.
The European Council Conclusions adopted on 8 February a level of commitments for sub-Heading 1 a (which contains Horizon 2020) " not exceeding EUR 125 614 million". This suggests a significant reduction compared to the proposal of the Commission (EUR 156 000 million). However, as H2020 contributes to the objectives of the Europe 2020 Strategy, the Council would want to see real growth compared to the 2013 level.
Besides H2020, subheading 1a also contains the "Connecting Europe Facility", the three large infrastructure projects of Galileo, ITER and Copernicus (previously GMES), and decommissioning of nuclear power plants.
The decision on the budget for Horizon 2020 still needs to be taken.
External instruments
The MFF package of proposals tabled by the Commission has been designed to enable the Union to further reinforce its role on the global stage and promote its interests and core values.
The various reviews undertaken of the current DCI have acknowledged its overall added value and its contribution to the achievement of the MDGs, but have also highlighted certain shortcomings. New challenges, together with the priorities set out in the Europe 2020 Strategy and the latest EU development policy, have prompted the Commission to make a proposal to review the DCI in line with the communication “A Budget For Europe 2020” of 29 June 2011 and with the communication "Increasing the Impact of EU Development Policy: An Agenda for Change" of 13 October 2011.
The proposal for a new Development Cooperation Instrument (DCI), together with the European Development Fund, will constitute the main EU external action instruments to reduce and ultimately eradicate poverty over the period 2014-2020. The new Partnership Instrument should also be useful as a tool underpinning regular EU policy dialogues with strategic partner countries and to help better deal with global environmental challenges, including biodiversity.
The DCI consists of two main categories of programmes: (i) bilateral and regional geographic programmes covering cooperation with Asia, Latin America, Central Asia, the Middle East and South Africa and (ii) thematic programmes. The DCI proposal also includes as a third category a dedicated Pan-African programme. The DCI recognizes that, "in a globalised world, different internal EU policies such as environment, climate change […] are increasingly becoming part of the EU's external action" and that "fighting climate change and protecting the environment are among the great challenges which face the Union and where the need for international action is urgent". DCI's primary objective is to reduce and eradicate poverty, but should also contribute to fostering sustainable economic, social en environmental development. Among the general principles, is the obligation to mainstream environment sustainability in all DCI funded programmes. The Commission's proposal foresees that no less than 50% of the thematic programme for Global Public Goods and Challenges will be spent on climate change and environmental objectives, and that 'in view of a key role of healthy ecosystem services for food production, biodiversity, especially when also contributing to climate resilience, will be one of the key areas under food security and sustainable agriculture'.
A first trilogue meeting on DCI took place on 27 February. The main issues have focused on delegated acts and Parliament's involvement in programming, as well as on financial allocations. Outstanding discussions on articles 1-3 are expected to continue in the next trilogue meetings. Technical discussions on other articles are also expected to start. The next trilogue meeting is expected either the 2nd or 3rd week of March.
The Commission services are currently developing the thematic and geographical programmes. The new Financial Regulation allows the EU to establish trust funds in external action, which are funds pooled from a number of donors, in particular the EU, its Member States, third countries, international organisations or private donors such as citizens to provide support to agreed objectives. The possibility of establishing such a Trust Fund for biodiversity to enhance European coordination and enhance the visibility of EU and Member States' external aid might be explored.
The EDF is the main instrument providing EU assistance for development cooperation under the Cotonou Agreement with ACP countries and for co-operation with Overseas Countries and Territories. The EDF is funded outside the EU budget. For the post-2013 multiannual financial framework, the COM proposed in "A Budget for Europe 2020" EUR 30 318.7 million for co-operation with ACP/OCT. The negotiation on the draft internal agreement for the 11th EDF started in January 2012 in the ACP working group. The text of the Internal Agreement was finalised in Coreper in June 2012, except for the global amount and the amounts of the specific financial envelopes, the contribution keys and the voting rights, as well as the recital linked to EDF budgetisation. The proposal will be presented for adoption by written procedure in March and for adoption by Council before end of 2013 thereby enabling timely programming and implementation of the 11th EDF (2014-2020). The EDF being outside of the EU budget, the legislative proposals are not negotiated with the European Parliament.
LIFE
Informal trilogues discussions during the CY Presidency concluded with compromises in most of the text, including Integrated Projects. Strong links with the Common Provisions Regulation were achieved (see Cohesion Policy update). National allocations, co-financing rates (and linked to this, the share earmarked for nature and biodiversity), and delegated acts vs. implementing acts remain main issues under discussions for the IE Presidency. Negotiations are for the moment on hold waiting for a clearer signal from the Commission after the European Council Conclusions on the MFF. Informal trilogues are expected to resume in April-May in view of reaching a first reading agreement in June.
Partnership Agreements and Programmes
According to the Common Provisions Regulation, the Common Strategic Framework (CSF) will translate the objectives and targets of the Union priorities of smart, sustainable and inclusive growth into key actions for the ERDF, the CF, the ESF, the EAFRD and the EMFF which will ensure an integrated use of the ESI Funds to deliver common objectives.