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EXPLANATORY MEMORANDUM
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The EU’s long-term commitment to a green and digital transition and the impact on
industry in the EU.
The EU is an attractive destination for sustainable investments. The European Single Market
has over the last 30 years delivered very significant economic benefits, delivering to the EU a
GDP that is up to 9% higher in the long run, than would have been the case without the Single
Market.1 The European business model is based on openness and the EU offers a business-
friendly environment. The European social model provides high quality and inclusive
education and training, well-functioning social protection systems, as well as public health
and environmental protection. Together with fair competition and an unparalleled regulatory
framework geared towards the twin digital and green transitions and resilience, this is helping
to provide the necessary predictability for investors.
Strengthening the competitiveness and resilience in strategic sectors and reducing the
dependencies of the European economy through the green and digital transformations has
been the EU compass over the last years. With NextGenerationEU,2 the EU’s flagship
economic recovery programme, the EU has closed the gap with pre-pandemic output levels
already in the summer of 2021. The funds directed to the twin green and digital transition are
making our economy more competitive. The unprecedented efforts by Member States to
implement crucial reforms increase the EU’s resilience.
The EU industry has proven its inbuilt resilience but is being challenged. High inflation,
labour and skills shortages, demographic change, post-COVID supply chains disruptions,
rising interest rates, and spikes in energy costs and input prices are weighing on the
competitiveness of the EU industry. This is paired with strong, but not always fair,
competition on the fragmented global market. The uptake and scaling up of certain critical
and emerging technologies in strategic sectors within the Union will be essential to seize the
opportunities and meet the objectives of the green and digital transitions to reduce strategic
dependencies and to facilitate cross-border investments across the Single Market. Therefore,
immediate action is required to support the development or manufacturing in the Union, or
safeguarding and strengthening their value chains, of critical technologies in the following
fields: deep and digital technologies, clean technologies, and biotechnologies. The Union also
needs to address labour and skills shortages in those strategic sectors.
The EU has already put forward several initiatives to support its industry. The Green Deal
Industrial Plan3 seeks to enhance the competitiveness of Europe's net-zero industry, secure the
volumes needed for critical raw materials and support the fast transition to climate neutrality.
It provides a more supportive environment for the scaling up of the EU's manufacturing
capacity in clean-tech. The plan is based on four pillars: a predictable and simplified
regulatory environment, speeding up access to finance, enhancing skills, and open trade for
resilient supply chains. With the European Innovation Agenda,4 the EU has sought to position
Europe at the forefront of the new wave of deep tech innovation and start-ups. One of its main
objectives is to improve access to finance for European start-ups and scale-ups, for example,
1 Communication on The Single Market at 30, COM(2023) 162 final.
2 https://next-generation-eu.europa.eu/index_en
3 Communication on A Green Deal Industrial Plan for the Net-Zero Age, COM(2023) 62 final.
4 Communication on A New European Innovation Agenda, COM(2022) 332 final.
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by mobilising untapped sources of private capital and simplifying listing rules. Moreover, the
Commission has in March 2023 adopted a new Temporary Crisis and Transition Framework
for State aid.5 Member States have more flexibility to design and implement support measures
in sectors that are key for the transition to climate neutrality. Member States are also currently
amending their national recovery and resilience plans to include REPowerEU Chapters,6
which is a crucial opportunity to provide immediate support to companies and boost their
competitiveness, without creating unnecessary strategic dependencies.
While these solutions provide fast and targeted support, the EU needs a more structural
answer to the investment needs of its industries. As indicated by President von der Leyen in
the State of the Union address of 14 September 2022,7 there is a need to ensure that the future
of industry is made in Europe. Moreover, a common European industrial policy requires
common European funding.8 Hence, the need to set up a Strategic Technologies for
Europe Platform (‘STEP’).
The Platform should help preserve a European edge on critical and emerging technologies
relevant to the green and digital transitions, from computing-related technologies, including
microelectronics, quantum computing, and artificial intelligence; to biotechnology and
biomanufacturing, and net-zero technologies. The European Council recognised the need to
address the issue and recommended to ‘ensure full mobilisation of available funding and
existing financial instruments and deploy them in a more flexible manner, so as to provide
timely and targeted support in strategic sectors without affecting the cohesion policy
objectives’.9 This way, the STEP should also help to mobilise private capital to support the
competitiveness of European businesses in these technologies in the global arena, which in
turn will lead to domestic capacity building.
Placing the STEP at the heart of the EU budget is the most effective solution. The transition to
climate neutrality, resilience and digital technologies are already guiding principles of the
multiannual financial framework: 30% of the EUR 2 trillion 2021-2027 MFF which includes
the NextGenerationEU recovery programmes are being spent on climate actions and more
than 20% of the Recovery and Resilience Facility is dedicated to digital policies. Besides, the
Digital Europe Programme supports bringing digital technology to businesses, citizens and
public administrations. The EU budget is also the ultimate EU tool to underpin the Single
Market and common action with value-added at EU level, securing economies of scale,
effectiveness, solidarity and passing a clear political message that the EU stands together in
the face of challenges.
The creation of the STEP is fully aligned with the ambitions set by Europe’s partners. The
United States’ Inflation Reduction Act will mobilise over USD 360 billion by 2032
(approximately EUR 330 billion). Japan's green transformation plans aim to raise up to JPY
20 trillion (approximately EUR 140 billion).10 India has put forward the Production Linked
Incentive Scheme to enhance competitiveness in sectors like solar photovoltaics and batteries.
The United Kingdom, Canada and many others have also put forward their investment plans
in clean technologies. It is important for all actors to ensure that funding be designed and
implemented in the least distortive manner practicable. Reinforcing transparency and
5 Communication on a Temporary Crisis and Transition Framework for State Aid measures (OJ C 101,
17.3.2023, p. 3).
6 Regulation (EU) 2023/435 as regards REPowerEU (OJ L 63, 28.2.2023, p. 1).
7 https://state-of-the-union.ec.europa.eu/state-union-2022_en
8 Speech of 4 December 2022, https://ec.europa.eu/commission/presscorner/detail/es/speech_22_7487
9 European Council conclusions of 23 March 2023, EUCO 4/23
10 COM(2023) 62 final.
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deliberation on industrial subsidies internationally is equally key to safeguard and improve the
existing – but incomplete - level playing field on which the EU’s and global prosperity has
been built.
Overview of the EU budget to the green and digital transition
The EU has several funds and programmes on- and off-budget to provide support to deep and
digital technologies, clean technologies, and biotechnologies. These instruments include in
particular cohesion policy funds, the Recovery and Resilience Facility, the Innovation Fund,
InvestEU, the European Defence Fund and Horizon Europe:
– Cohesion policy supports the green (EUR 110 billion) and digital (EUR 36.6 billion)
transition in Member States and regions, including a total of EUR 85 billion under
the European Regional Development Fund (ERDF), the Cohesion Fund (CF) and the
Just Transition Fund (JTF) – the EU’s main funds under regional development policy
– to support the EU energy transition.
– The Recovery and Resilience Facility and REPowerEU, the EU's plan to make
Europe independent from Russian fossil fuels, offer unprecedented opportunities to
Member States to finance green and digital investments and reforms.
– Drawing on the revenues from the EU Emission Trading System (ETS)11
– The Modernisation Fund (EUR 60 billion) provides substantial support to 13
beneficiary Member States to accelerate their energy transition.
– The Social Climate Fund (EUR 86 billion) will provide substantial support to
Member States to help addressing for vulnerable groups the consequences of
the green transition.
– The Innovation Fund (EUR 43 billion) will provide until 2030 funding for
innovative low-carbon technologies, including for the manufacturing of these
technologies, for instance to help energy-intensive industries, develop carbon
capture and storage, innovative renewable energy generation or energy
storage.
– InvestEU contributes both to the green transition and to digitisation. Overall 30% of
the InvestEU guarantee (i.e. EUR 7.8 billion) and 60% of the Sustainable
Infrastructure Window (EUR 5.9 billion) contribute to climate objectives. Further, it
is expected that more than EUR 2 billion could contribute to digital objectives and
over EUR 1 billion to biotech and medicines related investments.
– Horizon Europe, the EU's main research and innovation programme, will dedicate
EUR 20.2 billion to research and development of clean tech; EUR 11.5 billion to
biotech and medicines, and EUR 19.3 billion to digital technologies.
– The Digital Europe Programme, with a total budget allocation of EUR 7.6 billion, is
providing support to digital technologies.
– The European Defence Fund, with a budget of EUR 8 billion, supports research and
development of state-of-the-art and interoperable defence technology and equipment.
While the EU has been providing steady financing both to the green and digital transitions,
the funds are generally spread across various spending programmes and following different
rules. Leveraging on existing instruments and governance frameworks will speed-up the
11 Based on a carbon price of EUR 80 / ton CO2eq
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implementation and allow to mobilise higher amounts of financial support. This is the aim of
the STEP.
Strategic Technologies for Europe Platform (STEP)
The STEP will create the necessary conditions for a more effective, efficient and targeted use
of existing EU funds while contributing to achieving a level playing field in the Single Market
and thereby safeguarding cohesion. It will also help to direct existing funding towards the
relevant projects and speed up implementation on a subset of areas which will be identified as
crucial for Europe’s leadership. The choice of streamlining and making a better use of
existing instruments over creating a brand-new instrument responds to the call by the
European Council and has three main advantages. First, timing. With the creation of a new
instrument taking at least 12 to 18 months, bringing existing instruments together can be done
much more quickly. This would be an indisputable advantage for the beneficiaries of EU
funding as they would have the chance to reap the benefits of EU funding more swiftly.
Second, adapting the existing instruments would increase the possibilities of blending
different sources of financing – under both direct and shared management – thereby leading to
a more efficient use of resources. And finally, building on those existing instruments will also
be simpler for project promoters and programme managers. With the help of the Sovereignty
Portal, all the information about funding opportunities will be centralised. Moreover, it will
limit the administrative burden for project promoters and programme managers and minimise
the risk of overlaps amongst instruments.
The STEP would allow the Union to react quickly in the face of risks for companies critical
for Union’s value chains and to develop a top up for multi country projects, such as Important
Projects of Common European Interest (IPCEIs), to enhance all Member State’s access to
such projects, thereby safeguarding cohesion, and to strengthen the Single Market and counter
unequal availability of State Aid.
On that basis, the objective of the STEP is three-fold:
1. Providing flexibility in existing instruments
2. Reinforcing the firepower of existing instruments
3. Creating synergies among existing instruments
Providing flexibility in existing instruments to better support relevant investments
Cohesion funds represent the largest single EU policy financed through the EU budget. To
incentivise Member States, the Commission proposes a new priority across all major funds -
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the European Regional Development Fund (ERDF), Cohesion Fund (CF), and the Just
Transition Fund (JTF). The Commission also proposes to open up those funds for large
companies in less developed and transition regions, as well as in more developed regions of
Member States with a GDP per capita below the EU average, to unleash greater investments
in the target areas of the STEP. By providing financial incentives in the form of higher pre-
financing and EU financing, Member States are encouraged to reprioritise their programmes.
Under those funds, the Commission also proposes a 30% pre-financing in 2024 to incentivise
uptake and an increase the EU financing to 100% for STEP projects.
Moreover, it is proposed to provide additional flexibilities for Member States to be able to
implement the 2014-2020 cohesion policy programmes. The regulatory framework for the
implementation of the 2014-2020 programmes for cohesion policy and the Fund for European
Aid to the Most Deprived (FEAD) has already been adapted to provide Member States and
regions with additional flexibility in terms of implementation rules of cohesion policy and
more liquidity to tackle the effects of the COVID-19 pandemic and the war or aggression
against Ukraine.12 These measures, introduced at the end of the programming period, require
sufficient time and administrative resources to be fully exploited and implemented. Therefore,
it is proposed to extend the deadlines for the submission of the closure documentation under
the 2014-2020 period by 12 months. This should help the Member States that will face
additional workload linked to the revision of the operational programmes for the purpose of
the STEP.
To incentivise Member States to provide resources to InvestEU, the EU flagship programme
to boost investments in critical industries, the Commission proposes to increase the transfers
to InvestEU from the recovery and resilience plans from 4% to 10%. This additional
flexibility to use Member States’ resources under InvestEU will help them to benefit from the
established structures and market expertise of the InvestEU implementing partners, to select
and finance the most promising companies. In this respect, where a Member State decides to
transfer resources to InvestEU national compartments for implementing an existing InvestEU
financial product developed for the EU compartment by the Commission with Union
implementing partners and international implementing partners, such as the European
Investment Bank Group and the European Bank for Reconstruction and Development,
meaning that the Member State has no discretionary input into the design of the financial
product, such a decision does not render the design of the financial product imputable to the
State and hence such a decision does not in itself entail State aid. This is without prejudice to
the obligation of Union financial instruments and budgetary guarantees to be consistent with
State aid rules pursuant to Article 209(2)(c) of the Financial Regulation.
Moreover, to facilitate the RRF related contributions to the Member State compartment of
InvestEU and its uptake, the Commission will adapt the Technical guidance on the application
of ‘do no significant harm’ under Regulation (EU) 2021/241 to ensure that financial products
implemented under the InvestEU Fund can indicate, where applicable the absence of
significant harm to the six environmental objectives set out in Article 17 of Regulation (EU)
12 The additional REACT-EU resources stemming from the NextGenerationEU have increased the
funding available in 2021 and 2022 (without national co-financing required) to provide Member States
with rapid assistance for fostering crisis repair and resilient recovery. Other measures include the
Cohesion’s Action for Refugees in Europe (CARE) package, and the Supporting Affordable Energy
initiative (SAFE). See Regulation (EU) 2022/562 as regards Cohesion’s Action for Refugees in Europe
(CARE) (OJ L 109, 8.4.2022, p. 1); Regulation (EU) 2022/2039 as regards Flexible Assistance for
Territories (FAST-CARE) (OJ L 275, 25.10.2022, p. 23); and Regulation (EU) 2023/435 as regards
REPowerEU (OJ L 63, 28.2.2023, p. 1).
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2020/852 by applying InvestEU rules in combination with the relevant implementing
partner’s policies.
In addition, new STEP priorities will be included in the Innovation Fund, which is a funding
programme for the deployment of net-zero and innovative technologies; the European
Defence Fund, which is a funding programme for the research and development of defence
technology, and the European Innovation Council (EIC) under Horizon Europe, which is
Europe’s flagship innovation programme to identify, develop and scale up breakthrough
technologies. Moreover, it will be possible for the EIC to provide equity-only support to non-
bankable small mid-caps.
Equity support for STEP sectors
Companies looking for investments to start up or scale must overcome a series of
interconnected problems from securing patient capital to accessing critical networks and
capabilities if they are to remain in Europe and compete effectively in the current wave of
innovation.
Figure: Venture capital by destination and by stage (2020-Q1 2023).
Source: Global venture capital – Dealroom Q1 2023 update.
The EU has two main instruments providing equity support for European companies, namely
the InvestEU Programme and the European Innovation Council. InvestEU is the EU flagship
programme to catalyse private investments in the EU economy. The InvestEU Fund is
delivered through implementing partners, including the European Investment Bank (EIB) and
the European Investment Fund (EIF), which deploy financial products providing debt
(including guarantee), equity and quasi-equity support to companies and projects operating in
sectors relevant for the European sovereignty.
In particular, the EIF deploys two equity products with the total EU guarantee allocation of
EUR 5.2 billion and an indicative portfolio of EUR 8.7 billion, targeting research,
development, commercialisation and scaling of clean technologies or environmental
sustainability solutions and digital and sustainable infrastructure projects. As of mid-2023, the
EIF has approved more than 100 investments in funds expected to mobilise close to EUR 30
billion of investment. The EIB provides equity-type support under high-risk thematic and
venture debt products, focusing inter alia on green transition, strategic digital technologies
and key enabling technologies.
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The types of support that can be provided through the EIC involve blended finance, grant-
only and equity-only under certain conditions. In accordance with the existing legislation,
equity-only support can be provided to non-bankable SMEs, including start-ups, which have
already received a grant-only support. This initiative expands that definition by allowing to
provide equity-only to non-bankable SMEs and small mid-caps carrying out breakthrough and
disruptive innovation in critical technologies and regardless of whether they previously
received other types of support from the EIC Accelerator. The proposed extension would
provide equity-only support to high risk, high potential companies targeting investments in
the range of EUR 15 to 50 million and catalysing financing rounds with co-investors in the
range of EUR 50 to 250 million.
The EIC was established under Horizon Europe to identify and provide scale up support for
breakthrough technologies and innovations, with a focus on higher risk, earlier stage
companies. A key component of the EIC is the EIC Fund, which is designed to take risks that
the market will not take alone and bridges a critical financing gap for deep tech companies.
The EIC Fund has been fully operational since Autumn 2022 and has already made over 130
investment decisions. However, the EIC Fund cannot accommodate the needs of an increasing
number of companies that require follow-on financing rounds or larger investment amounts.
This is particularly the case for critical and emerging technologies that remain high risk but
also require large amounts of capital to reach the market. The new EIC Fund compartment
would meet the needs for larger investment amounts (above EUR 15 million), as well as
complementing other EU financial instruments and products, including those under Invest
EU.
Demand for investments in deep tech in Europe remains strong, with over 5000 applications
received in the first two years of EIC operation resulting in support for over 400 companies.
Of these, 245 companies have been recommended for the unique blend of non-dilutive grant
alongside investment through the EIC and 131 of these companies have received an
investment recommendation of EUR 5 million or above. It is estimated that approximately
25% of the companies that have been awarded investment of over EUR 5 million from the
EIC will require follow-on funding of on average EUR 25-35 million: representing a pipeline
of 20-30 companies a year13 requiring EUR 0.5 to 1 bn per year.
Based on current experience from the EIC, this EU-backed investment would leverage
additional private investment of up to five times and therefore significantly address the market
gap. Without additional support, many of these companies could relocate outside of Europe to
access larger financing rounds or could be overtaken by third country competitors that are
better financed.
Reinforcing the firepower of existing instruments to speed up relevant investments
In terms of resources, it is proposed that an additional total amount of EUR 10 billion is
allocated to support existing and well-proven EU investment schemes aimed at strengthening
STEP investments, while preserving the cohesion objectives and contributing to a level
playing field in the Single Market by ensuring a geographically balanced distribution of
projects financed under the STEP via the respective mandates of the participating
programmes, taking into account the demand-driven nature of certain implementing
programmes.
InvestEU
13 The figure is based on EIC Accelerator funding awards in 2021-22.
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The deployment is well on track with 85% of the initial guarantee already contracted with
implementing partners, representing EUR 22.3 billion. The fast absorption of the EU
guarantee reveals the large market interest for the funding opportunities offered by InvestEU.
This calls for reinforcing the EU guarantee by an additional EUR7.5 billion; requiring a
financial top-up of EUR 3 billion with a 40% provisioning rate. This additional guarantee
should be exclusively used for project contributing to STEP priorities and has the potential to
trigger up to EUR 75 billion of investments with an average multiplier of 10.
A new STEP policy window will be set under InvestEU to provide an additional volume of
budgetary guarantee to the implementing partners, which will deploy debt (including
guarantees) and equity financial products for companies, including SMEs, and projects in the
sectors supported by the STEP, including investment in manufacturing and supply chains.
InvestEU will leverage additional investment, particularly from the private sector, by
addressing market failures and sub-optimal investment situations experienced in the sectors
targeted by the STEP. InvestEU is already able to support projects falling within Important
Projects of Common European Interest (IPCEIs) within the meaning of Article 107(3)(b)
TFEU and its reinforcement through the fifth window will therefore enhance its possibility to
do so for critical projects within the scope of application of STEP.
The European Innovation Council
The EIC is the leading mean for providing seed capital to fast growing start-ups. Given its
expertise, the EIC is well suited to reinforce the funding in companies seeking scale-up capital
beyond the first innovation phase. A EUR 0.5 billion budgetary reinforcements combined
with EUR 2.13 billion from redeployment and de-commitments will enable the EIC to
provide unprecedented equity investments for tickets between EUR 15 million and EUR 50
million. With an average multiplier of 5, this can lead to EUR 13 billion of fresh equity
support to non-bankable SMEs and small mid-caps.
Innovation Fund
The Innovation Fund, financed from the auctioning of allowances under the EU Emissions
Trading System, is one of the world’s largest funding programmes for the deployment of net-
zero and innovative technologies. It aims to bring to market industrial solutions to
decarbonise Europe and focuses on highly innovative technologies and processes. The goal to
create the right financial incentives for companies to invest in clean tech and to empower
them to become global clean tech leaders is fully aligned with the STEP objectives. To
respond to the growing needs for innovation to maintain the EU’s competitiveness on global
markets, the size of the Innovation Fund should be increased by EUR 5 billion. In line with
the objectives of ensuring cohesion and promoting the Single Market, and in order to support
the green transition and the development of clean technologies throughout the Union, the
additional financial envelope shall be made available through calls for proposals open to
entities from Member States whose average GDP per capita is below the EU average of the
EU-27 measured in purchasing power standards (PPS) and calculated on the basis of Union
figures for the period 2015-2017. Taking into account experience to date, this should result in
overall investments of around EUR 20 billion.
European Defence Fund
The European Defence Fund is critical to enhance the competitiveness, innovation, efficiency
and technological autonomy of the Union’s defence industry, thereby contributing to the
Union’s open strategic autonomy. It also supports the cross-border cooperation between
Member States as well as cooperation between enterprises, research centres, national
administrations, international organisations and universities throughout the Union, both in the
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research and in the development phases of defence products and technologies. To respond to
growing needs, the European Defence Fund should be increased by EUR 1.5 billion. Taking
into account the limited experience to date, this could result in overall investments of around
EUR 2 billion.
Taken together, the reinforcements of the foregoing four programmes and instruments
(InvestEU, European Innovation Council, Innovation Fund, European Defence Fund) can be
expected to lead to additional investments in the critical technologies covered by STEP of
around EUR 110 billion.
By providing financial incentives in cohesion policy funds in the form of higher pre-financing
and co-financing, Member States are encouraged to reprioritise their programmes. Every 5%
of reprogramming towards STEP priorities leads to EUR 18.9 billion of resources made
available, in addition to EUR 6 billion to be paid out from the Just Transition Fund. The
increase of the ceiling under the RRF to use resources for InvestEU products via its national
compartments represents an additional flexibility for Member States of EUR 30 billion
potentially available for such sovereignty investments.
Altogether, the total estimated amount of new investments through STEP could reach up to
EUR 160 billion.
Creating synergies among instruments to better support relevant investments
To access those funds, companies and project promoters will be able to consult a new publicly
available website (the ‘Sovereignty Portal’). This Portal will provide information about
relevant funding opportunities with the ongoing and upcoming calls under the EU
programmes contributing to the STEP objectives as well as guidance and contacts to the
existing advisory hubs.
Moreover, a ‘Sovereignty Seal’ will be awarded to projects contributing to the STEP
objectives, provided that the project has been assessed and complies with the minimum
quality requirements, in particular eligibility, exclusion and award criteria, provided by a call
for proposals under Horizon Europe, the Digital Europe programme, the EU4Health
programme, the European Defence Fund or the Innovation Fund, and regardless of whether
the project has received funds under those instruments. These minimum quality requirements
will be established with a view to identify high quality projects. This Seal offers a unique
opportunity to build on the applicable high-quality evaluation processes under those
instruments. This Seal will be used as a quality label and will help projects attract public and
private investments by certifying its contribution to the objectives of the STEP and therefore
guiding market participants in their investment decisions. Moreover, the Seal will promote
better access to EU funding and financing, notably by facilitating cumulative or combined
funding from several Union instruments. This would, for instance, allow Member States to
grant support from ERDF and ESF+ to projects having been awarded a Sovereignty Seal
directly, subject to compliance with applicable State aid rules.
The Commission is also working to ensure synergies between the rules of the Innovation
Fund and the State aid rules to ensure a more streamlined process. The Commission will
further align criteria and streamline processes to ensure that the decision on State aid is taken
at the same time as the funding decision from the Innovation Fund, provided a complete
notification by the Member State occurs in due time. Such synergies are also being assessed
for other selected EU instruments, including the EIC Fund.
The Commission will also consult Member States on a proposal to enable higher rates of aid
via a bonus for projects within the scope of STEP in assisted regions to spur further economic
development, while preserving cohesion objectives.
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Authorities in charge of programmes falling under STEP should also be encouraged to
consider support for strategic projects identified in accordance with the Net Zero Industry and
the Critical Raw Materials Acts that fall under the scope of Article 2 of the Regulation,
subject to compliance with applicable State aid rules.
STEP– focus on investments
To be successful, the STEP should focus on few but well-targeted investment areas. The
Platform should ensure and preserve a European edge on critical and emerging technologies
and related manufacturing in the following fields:14 deep and digital technologies, clean
technologies, and biotechnologies. The scope of the STEP would therefore focus on leading
edge technologies to advance the green and digital transitions, supporting both the
manufacturing side and the value chains.
Deep and digital technologies
Innovation, and in particular its new wave of deep-tech innovation, is the European reply to
bring down greenhouse gas emissions, to make our economies more digital and to guarantee
Europe’s food, energy and secure raw materials supply and security. Deep tech innovation,
which is rooted in cutting edge science, technology and engineering, often combining
advances in the physical, biological and digital spheres and with the potential to deliver
transformative solutions in the face of global challenges. Those innovations have the potential
to drive innovation across the economy and society, thus transforming the EU’s business
landscape.
The European Innovation Agenda already aims to position Europe at the forefront of the new
wave of deep tech innovation and start-ups. One of its main objectives is to improve access to
finance for European start-ups and scale-ups, for example, by mobilising untapped sources of
private capital and simplifying listing rules.
The STEP would add another dimension to the EU commitment to the delivery on this
agenda. The EU will steer further funding, and also define a clear investment direction. This
will further support deep tech investments in Europe, to the benefit of the EU economies and
the society as a whole.
Digital technologies have a profound impact on the competitiveness of the EU economy as a
whole, boosting efficiency and innovation. Their adoption and integration across the economy
will be vital to the overall competitiveness and productivity.15 To maintain its industrial
leadership, the EU needs to attain a leading role in key digital technology.
Clean technologies
EU’s competitiveness in the clean energy sector entails the capacity to produce and use
affordable, reliable and accessible clean energy and compete in the global clean energy
markets, with the overall aim of supporting the transition to climate neutrality and bringing
benefits to the EU economy and people. The EU is currently facing technological and non-
technological challenges, such as high energy prices, critical raw materials supply chain
disruptions and skills shortages. Strengthening the competitiveness of the EU clean energy
sector will contribute to increasing the EU's technology leadership, and shape a more resilient,
14 In accordance with the New European Innovation Agenda, deep tech innovation has the potential to
drive innovation across the economy and society. The Communication on the long-term
competitiveness of the EU highlighted clean technology, biotechnology and digital as key relevant areas
for the future due to its high-growth potential and higher labour productivity.
15 Communication on the Long-term competitiveness of the EU: looking beyond 2030, COM(2023) 168
final.
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independent, secure and affordable energy system needed to meet these challenges. In that
context, the Commission’s communication on the Green Deal Industrial Plan presented a
comprehensive plan for enhancing the competitiveness of Europe’s net-zero industry and
supporting the fast transition to climate neutrality; and the Net-Zero Industry Act16 establishes
a framework of measures for strengthening Europe’s net-zero energy technologies
manufacturing ecosystem.
Since 2020, the European Commission has published yearly progress reports on
competitiveness of clean energy technologies that present the current and projected state of
play for different clean and low-carbon energy technologies and solutions. According to the
2022 Competitiveness Progress Report,17 which the Commission publishes in the context of
the Governance of the Energy Union and Climate Action framework, ‘The rapid development
and deployment of home-grown clean energy technologies in the EU is key to a cost-
effective, climate friendly and socially fair response to the current energy crisis’. The report
also confirms that more public and private investments in clean energy research and
innovation, scale-up and affordable deployment are of pivotal importance. The EU’s
regulatory and financial frameworks have a crucial role to play here. Together with the
implementation of the New European Innovation Agenda, EU funding programmes, enhanced
cooperation between Member States, and a continuous monitoring of national R&I activities,
are crucial to design an impactful EU R&I ecosystem, and to bridge the gap between research
and innovation and market uptake, thus reinforcing EU competitiveness.
Biotechnologies
Biotechnology and biomanufacturing are key for the modernisation of the European industry.
They are used in a variety of industrial sectors such as healthcare and pharmaceuticals,
agriculture, materials, and bioeconomy. Reaping the full benefits of biotechnology can help
the EU economy grow and provides new jobs, while also supporting sustainable development,
public health, and environmental protection.
The coronavirus pandemic has proven the importance of biotech with vaccine manufacturers
having played a key role in reversing the course of the pandemic. And while Europe continues
to be a leader in life science innovation, its biotech industry remains approximately a quarter
of the size of the US in terms of both the number of companies and the value of venture
financing.18 In addition, financing – both at the earliest stages and later on – is deemed more
limited in Europe than in the US. This constrains companies’ ability to invest in larger
diversified pipelines and leaves them reliant on their initial investors.
• Consistency with existing policy provisions in the policy area
The Green Deal Industrial Plan is the EU’s roadmap to secure the long-term competitiveness
of Europe's industry and support the fast transition to climate neutrality. The Net-Zero
Industry Act represents its regulatory arm. The act seeks to ensure a simpler and fast-track
permitting, promoting European strategic projects, and developing standards to support the
scale-up of technologies across the Single Market. It is complemented by the Critical Raw
Materials Act,19 to ensure sufficient access to those materials, like rare earths, that are vital for
16 Proposal for a regulation establishing a framework of measures for strengthening Europe’s net-zero
technology products manufacturing ecosystem, COM(2023) 161 final.
17 Progress report on competitiveness of clean energy technologies, COM(2022) 643 final.
18 Gong J., Romet-Lemonne J-L., Houser B., ‘Bridging the gap between innovation and later-stage
financing for biotech in Europe’, Nature Reviews Drug Discovery 22, 2023, pp. 438-439.
19 Proposal for a regulation establishing a framework for ensuring a secure and sustainable supply of
critical raw materials, COM(2023) 160 final.
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manufacturing technologies that are key for the twin transition. Another key instrument to
support the competitiveness of the European industry is the European Chips Act.20 It seeks to
bolster Europe’s resilience in semiconductor technologies and applications, and boost the
EU's share of the global microchips market.
• Consistency with other Union policies
The proposal falls within the EU’s overall efforts to secure the green and digital
transformation of its economy. It contributes to the objectives of parts of the Fit for 55
package21 that focus on decarbonising EU industry.
The proposal will also contribute to the EU’s resilience and open strategic autonomy by
strengthening the EU’s capacity as regards critical technologies, including key energy-related
technologies, which is crucial for supporting the development of other sectors of the
economy.
It relies on existing EU policies that seek to achieve the same objective – from cohesion,
through recovery investments to research and innovation financing – which seek to support
European economy and channel EU funds towards the green and digital transformation.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
This Regulation pursues the general objective of setting up a legal framework which supports
the channelling of EU funds towards STEP projects. The objectives of the STEP will be
achieved through the following programmes:
– European Regional Development Fund (ERDF) and Cohesion Fund (CF), established
under Regulation (EU) 2021/1058;22 the Just Transition Fund (JTF), established
under Regulation (EU) 2021/1056;23 the European Social Fund Plus (ESF+),
established under Regulation 2021/1057;24 the Common Provisions Regulation (EU)
2021/1060.25
– Recovery and Resilience Facility, established under Regulation (EU) 2021/241.26
– InvestEU, established under Regulation (EU) 2021/52327
– Digital Europe, established under Regulation 2021/694;28 Horizon Europe,
established under Regulation 2021/695;29 European Defence Fund, established under
Regulation (EU) 2021/69730 and the Innovation Fund, established under Directive
2003/87/EC.31
20 Proposal for a regulation establishing a framework of measures for strengthening Europe’s
semiconductor ecosystem, COM(2022) 46 final.
21 Communication on the Fit for 55, COM(2021) 550 final; and accompanying proposals.
22 OJ L 224, 24.6.2021, p. 31.
23 OJ L 231, 30.6.2021, p. 1.
24 OJ L 231, 30.6.2021, p. 21.
25 OJ L 231, 30.6.2021, p. 159.
26 OJ L 57, 18.2.2021, p. 17.
27 OJ L 107, 26.3.2021, p. 30.
28 OJ L 166, 11.5.2021, p. 1.
29 OJ L 170, 12.5.2021, p. 1.
30 OJ L 170, 12.5.2021, p. 149.
31 OJ L 275 25.10.2003, p. 32.
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– The STEP will also be implemented within the EU4Health programme, established
under Regulation (EU) 2021/52232, concerning the objective to reinforce the
development of biotechnologies in the Union.
Therefore, considering the above, Article 164, Article 173, Article 175(3), Article 176, Article
177, Article 178, Article 182(1) and Article 192(1) are the relevant legal bases for the
implementation of this Regulation.
• Subsidiarity (for non-exclusive competence)
The objectives of the proposal cannot be achieved by Member States acting alone, as the
problems are of a cross-border nature, and not limited to single Member States or to a subset
of Member States. The proposed actions focus on areas where there is a demonstrable value
added in acting at Union level due to the scale, speed and scope of the efforts needed within
the Single Market.
Given the challenges for accelerating the deployment of net-zero and digital technologies,
intervention at the level of the Union helps coordinate responses to address the Union’s needs
for additional manufacturing capacities and to prevent structural dependencies. Action at
Union level can clearly drive European actors towards a common vision and implementation
strategy. This is key to generate economies of scale and of scope and to generate critical mass
necessary for scaling up green and digital technologies manufacturing in the EU, while
limiting fragmentation of efforts, deepening of regional imbalances and self-harming subsidy
races between the Member States.
• Proportionality
The proposal is designed to help developing a manufacturing ecosystem via measures to
facilitate investments. The objective is to support the longer-term competitiveness and
innovation capacity of European industry via manufacturing capabilities, de-risking of
investments into strategic projects, as well as by start-ups, scale-ups and SMEs.
The measures do not go beyond what is necessary to achieve these goals. The STEP does not
consist of a new fund structure but relies on existing EU funding instruments and the
proposed additional resources are proportionate to the need to accelerate Platform investments
in the short term.
• Choice of the instrument
A Regulation is the appropriate instrument as it provides directly applicable rules for the
support.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
CONSULTATIONS AND IMPACT ASSESSMENTS
• Stakeholder consultations
No stakeholder consultation was carried out specifically. This initiative takes into account
stakeholder consultations conducted for the preparation of other related initiatives, such as the
Critical Raw Materials Act, the Net-Zero Industry Act, the European Innovation Agenda, the
Fit for 55 package, the European Chips Act, and the Digital Decade Compass. Moreover, the
European Commission has long-standing and regular contacts with industry stakeholders,
32 OJ L 107, 26.3.2021, p.1.
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Member States and trade associations, which enabled the collection of feedback relevant to
the proposal.
• Impact assessment
This proposal does not create a new instrument but is implemented through existing tools
under the EU budget, which are amended to be able to better mobilise investment resources
into critical technologies. Those existing tools, such as cohesion funds, InvestEU and Horizon
Europe, have been subject to an impact assessment.33 Moreover, the proposal builds on
existing proposals which have been subject to impact analysis, such as the Critical Raw
Materials Act, the European Innovation Agenda, the Fitfor55 package, the European Chips
Act, and the Digital Decade Compass as well as the investment needs assessment published
on 23 March 2023. This analysis, carried out in impact assessments or analytical staff
working documents,34 covers the most significant impacts of this proposal. For those reason,
another impact assessment is not needed. The explanatory memorandum also reflects the ex-
ante assessment carried out by the Commission in relation to the equity-only support to be
provided under the EIC for non-bankable SMEs and small mid-caps.
• Regulatory fitness and simplification
The proposal is not linked to regulatory fitness and simplification but contains a number of
provisions to simplify the implementation of existing EU instruments. The reporting
requirements have been kept to a minimum to limit the administrative burden on Member
States’ authorities and companies, while not undermining the sound financial management
principles.
• Fundamental rights
Article 15 of the Charter provides for the freedom to choose an occupation and the right to
engage in work. Supporting the competitiveness of the European industry will ensure
economic growth and make sure it continues to offer job opportunities to citizens and
residents of the Union.
Article 16 of the Charter of Fundamental Rights of the European Union (‘the Charter’)
provides for the freedom to conduct a business. The measures under this proposal support the
creation of innovation capacity and the deployment of clean energy technologies, which can
reinforce the freedom to conduct a business in accordance with Union law and national laws
and practices.
BUDGETARY IMPLICATIONS
The proposal will result in additional pre-financing to be paid under JTF in 2024, financed by
the European Recovery Instrument NextGenerationEU. It will also result in additional pre-
financing to be paid under the ERDF, CF and ESF+ in 2024 for amounts programmed under
priorities dedicated to operations contributing to strengthening STEP objectives. The
additional pre-financing payments for the JTF in 2024 will be financed only from external
assigned revenues and will result in a frontloading of NGEU payment appropriations from
year 2026 to year 2024. All amounts will be available as external assigned revenues, within
33 In particular ERDF and CF (SWD(2018) 282 final), ESF+ (SWD(2018) 289 final), InvestEU
(SWD(2018) 314 final), and Horizon Europe (SWD(2018) 307 final).
34 SWD(2023) 161 final, SWD(2022) 187 final, SWD(2020) 176 final, SWD(2022) 147 final, and
SWD(2021) 247 final, and SWD(2023)68 final, respectively.
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the meaning of Article 21(5) of Regulation (EU, Euratom) 2018/1046 stemming from the
Next GenerationEU borrowing operations.
The additional pre-financing payments for the ERDF, CF and ESF+ in 2024 will result in a
frontloading of payment appropriations to 2024 and is budgetary neutral over the 2021-2027
period. This additional pre-financing was not envisaged in the draft budget. The Commission
will monitor the amounts programmed by Member States under priorities dedicated to
operations contributing to STEP objectives and assess their impact on the payment needs in
the context of the global transfer exercise in 2024. The amount paid as additional pre-
financing shall be totally cleared from the Commission accounts not later than closure of the
respective programmes, such that the total amount of payments made under the concerned
Funds will remain unchanged with this proposal. The proposed modification does not require
changes in the Multiannual Financial Framework annual ceilings for commitments and
payments as per Annex I to Council Regulation (EU, Euratom) 2020/2093, and does not
imply changes to the overall payment needs over the 2021-27 programming period.
As for Horizon Europe, the proposal consists in reinforcing the envelope of the EIC by EUR
2.63 billion in total:
– EUR 0.8 billion are proposed to be redeployed from the resources allocated to Pillar
II 'Global Challenges and European Industrial Competitiveness' for the period 202[x]
to 2027;
– EUR 0.13 billion from the reflows of the EIC pilot of Horizon 2020
– EUR 1.2 billion resulting from total or partial non-implementation of research
projects supported by Horizon Europe and its predecessors, are proposed to be made
available again, in line with Article 15(3) of the Financial Regulation, to the benefit
of the EIC strand of Horizon Europe; and
– EUR 0.5 billion budgetary reinforcement
In addition, the Innovation Fund should be reinforced by EUR 5 billion, the European
Defence Fund by EUR 1.5 billion and the InvestEU should benefit from a reinforcement of
EUR 3 billion resulting in a guarantee of EUR 7.5 billion.
The total budgetary implications for the MFF is therefore EUR 10 billion.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will monitor the implementation of the Platform and measure the
achievement of the objectives under this Regulation in a targeted and proportionate manner.
The Commission will ensure that data for monitoring the implementation of the activities and
results are collected efficiently, effectively and in a timely manner.
To monitor the implementation of the Platform, the Commission will compile the
expenditures related to the STEP from the relevant programmes. The respective climate
spending targets under the relevant programmes continue to apply. This requires the
following:
– Common Provisions Regulation: updating Annex I of the Regulation to include
additional intervention fields;
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– Recovery and Resilience Facility: tagging and reporting based on a break-down of
the estimated expenditure by the Commission in accordance with article 29(3) of that
Regulation of investments related to the STEP objectives;
– InvestEU: tracking of expenditures by the Commission.
– Direct management programmes (Horizon Europe, Innovation Fund, European
Defence Fund, Digital Europe Programme, EU4Health Programme): tracking of
expenditures by the Commission.
To monitor and assess the performance of the programme, the Commission will compile the
results of performance indicators related to the STEP from the relevant programmes.
The implementation of the performance indicators related to the STEP requires:
– Cohesion instruments: amending of the annexes of the fund-specific regulation
containing the performance indicators;
– InvestEU: amending Annex III of the InvestEU Regulation containing the key
performance and monitoring indicators;
– Recovery and Resilience Facility: relying on the existing reporting framework
– Direct management programmes (Horizon Europe, Innovation Fund, European
Defence Fund, Digital Europe Programme, EU4Health Programme): information to
be gathered by the Commission.
• Detailed explanation of the specific provisions of the proposal
Chapter 1 of this Regulation (Articles 1 to 8) sets out the common provisions necessary for
the creation of the STEP, while Chapter 2 contains the amendments to other relevant pieces of
EU legislation (Articles 9 to 19).
Subject matter and Platform objectives (Articles 1 and 2)
Article 1 explains the subject matter of the Regulation, and Article 2 defines the objectives
and scope of the instrument. In accordance with Article 2, the STEP has a twofold objective:
(i) to support the development or manufacturing of critical technologies in the Union or
safeguarding and strengthening their value chains; and (ii) reducing labour and skills
shortages in those strategic sectors. Article 2 also defines the fields for those critical
technologies, namely deep and digital technologies, clean technologies, and biotechnologies.
This provision further specifies that, in order for a technology to be deemed as critical for the
purposes of the Platform, it should meet the following conditions: (i) bring an innovative,
element with significant economic potential to the Single Market; or (ii) contribute to reduce
or prevent the strategic dependencies of the Union. It is also clarified that, where an IPCEI
approved pursuant to Article 107(3)(b) TFEU relates to any of the technology fields referred
to in Article 2(1)(a), the relevant technologies should be deemed to be critical. Article 2 also
provides with further guidance as to the meaning of ‘value chain’.
Financial support (Article 3)
This provision lays down the additional EU funding which is used to reinforce the firepower
of several instruments, namely InvestEU, Horizon Europe, European Defence Fund and the
Innovation Fund.
Sovereignty Seal and cumulative funding (Article 4)
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Article 4 creates a ‘Sovereignty Seal’, which is a new label intended to help project promoters
attract public and private investments by certifying its contribution to the STEP objectives.
The Sovereignty Seal would be awarded under directly managed programmes, namely
Horizon Europe, the Innovation Fund, the Digital Europe programme, the EU4Health
programme, and the European Defence Fund. The Seal builds on the existing ‘Seal of
Excellence’, which is a quality label for eligible projects that could not be funded due to lack
of budget available. Unlike the Seal of Excellence, the Sovereignty Seal is defined only by
reference to the objectives pursued by the projects to which it has been awarded, and
regardless of whether the project has been able to receive EU funding as long as it has been
successfully evaluated under Horizon Europe, the Innovation Fund, the Digital Europe
programme, the EU4Health programme or the European Defence Fund. This is a way to
promote that projects which have been partly funded can also receive cumulative or combined
funding with another Union instrument (Article 4(1)(b)). Moreover, the Sovereignty Seal
would also apply to cases where a project has not been able to receive EU funds under one
programme, in order to promote that it receives support under another programme (Article
4(1)(a)).
This provision also indicates that projects having been awarded a Sovereignty Seal should be
prioritised by Member States when proposing their Recovery and Resilience Plans and when
deciding on investment projects to be financed from its share of the Modernisation Fund. As
regards the InvestEU Programme (see also Article 15), the Sovereignty Seal should be taken
into account by the Commission in the context of the procedure provided for in Article 19 of
the EIB Statute and of the policy check laid down in Article 23 of Regulation (EU) 2021/523.
In addition, the implementing partners should be requested to examine projects having been
awarded the Sovereignty Seal in case they fall within their geographic and activity scope.
Concerning cohesion policy, it is proposed that managing authorities are able to grant support
from the ERDF or the ESF+ directly, subject to compliance with applicable State aid rules,
for operations attributed a Sovereignty Seal (see Article 13).
Strategic projects identified in accordance with the Net Zero Industry and the Critical Raw
Materials Acts that fall under the scope of Article 2 of the Regulation may benefit from
cumulative funding across relevant Programmes.
Monitoring and implementation (Article 5)
Article 5 defines how the Commission shall monitor the implementation of the STEP, the
results and progress towards the achievement of its objectives.
Sovereignty Portal (Article 6)
Article 6 sets out the obligation for the Commission to set up a new publicly available website
(the Sovereignty Portal) to provide support to companies and project promoters seeking funds
for STEP investments. To that end, the Portal is required to display in particular the following
information: ongoing and upcoming calls for proposals linked to the STEP objectives (Article
6(1)(a)) and contacts to the national competent authorities designated to act as the main point
of contact for the implementation of the STEP at national level (Article 6(1)(d)). Moreover,
the Portal should inform about the projects which have been awarded a Sovereignty Seal
label, in order to give them visibility towards potential investors (Article 6(1)(b)), as well as
strategic projects identified under the NZIA and the CRMA (Article 6(1)(c)). Moreover, the
Platform should present the information about the implementation of the Platform (Article
6(2)). Article 6(4) requires Member States to designate one national competent authority to
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act as the main point of contact for those priorities, with the objective to ensure the consistent
application of the STEP throughout the Union, and in order to facilitate the combination of
available funding for Platform projects, notably under directly managed programmes and
shared management programmes.
Annual report and evaluation (Articles 7 and 8).
Articles 7 sets out the obligation for the Commission to provide an annual report to the
European Parliament and the Council on the progress made in implementing the STEP
objectives.
Article 8 lays down the rules on the evaluation of the Platform. The Commission is required
to provide an evaluation report to the European Parliament and the Council by 31 December
2025.
Amendments to Directive 2003/87/EC (EU ETS Directive) (Article 9)
Article 9 amends the EU ETS Directive to specify the amount of additional funds to be
implemented through the Innovation Fund for projects aimed at supporting the development
or manufacturing in the Union of clean technologies. This additional support is made
available only to Member States whose average GDP per capita is below the EU average of
the EU-27 measured in purchasing power standards (PPS) and calculated on the basis of
Union figures for the period 2015-2017.
Amendments to Regulation (EU) 2021/1058, Regulation on the European Regional
Development Fund and on the Cohesion Fund (Article 10), Regulation on the Just Transition
Fund (Article 11), and to Regulation (EU) 2021/1057, Regulation establishing the European
Social Fund Plus (Article 12)
Article 10 amends the Regulation on the European Regional Development Fund (ERDF) and
on the Cohesion Fund (CF) to create new specific objectives under Policy Objective 1 (a more
competitive and smarter Europe by promoting innovative and smart economic transformation
and regional ICT connectivity) and Policy Objective 2 (a greener, low-carbon transitioning
towards a net zero carbon economy and resilient Europe by promoting clean and fair energy
transition, green and blue investment, the circular economy, climate change mitigation and
adaptation, risk prevention and management, and sustainable urban mobility). It is also made
possible to support productive investments in enterprises other than SMEs, in less developed
and transition regions, as well as in more developed regions in Member States whose average
GDP per capita is below the EU average of the EU-27 measured in purchasing power
standards (PPS) and calculated on the basis of Union figures for the period 2015-2017.
Article 11 amends the Regulation on the Just Transition Fund (JTF) to indicate that such a
programme can support investments linked to the STEP objectives.
Moreover, in order to help accelerate those investments and providing the necessary liquidity,
an exceptional pre-financing of 30% will be available for the year 2024. It is also set out that
Member States should be able to apply an increased EU financing rate of up to 100%. This is
reflected for the three Regulations above, by including the same provisions under Articles 10,
11, and 12.
Annexes I and II of the ERDF and CF regulation are amended to include the indicators related
to the new STEP objectives.
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Amendments to Regulation (EU) 2021/1060, Regulation laying down common provisions
applicable amongst others to the ERDF, CF, JTF and ESF+ (Article 13)
This Regulation is also amended to allow that projects having been awarded a Sovereignty
Seal could benefit from better access to EU funding, notably by facilitating cumulative or
combined funding from several Union instruments. To that end, managing authorities will be
able to grant support from the ERDF or the ESF+ directly, for operations attributed a
Sovereignty Seal. It is also set out that Member States should be able to apply an increased
EU financing rate of up to 100%.
Article 49 of the CPR Regulation is amended to ensure that the managing authorities identify
and submit to the Commission the planned calls for proposals related to the STEP objectives
in order to publish them on the Sovereignty portal, as well as a dedicated secondary theme for
the ESF +.
The amendment to Annex I of the CPR Regulation incorporates supplementary intervention
fields that will allow to track the expenditure related to the new Platform objectives.
Amendments to Regulation (EU) No 1303/2013 (Article 14) and Regulation (EU) No
223/2014 (Article 15)
This amendment to provide with additional flexibilities for Member States to be able to
implement the 2014-2020 cohesion policy programmes, the EMFF and the Fund for European
Aid to the Most Deprived (FEAD). The regulatory framework for the implementation of the
2014-2020 programmes has already been adapted to provide Member States and regions with
additional flexibility in terms of implementation rules and more liquidity to tackle the effects
of the COVID-19 pandemic and the war or aggression against Ukraine.35 These measures,
introduced at the end of the programming period, require sufficient time and administrative
resources to be fully exploited and implemented. This is linked to the need for the Member
States to focus administrative resources on the revision of the operational programmes
towards the STEP.
Therefore, the deadline for the submission of that final payment application should be
extended by 12 months. Furthermore, the deadline for the submission of the closure
documents should also be extended by 12 months so that the necessary controls and audits
allowing for an orderly closure of programmes under the 2014-2020 programming period can
be carried out. In order to ensure a sound implementation of the EU budget and respect for the
payment ceilings, payments to be made in 2025 should be capped at 1 % of the financial
appropriations from resources under the Multiannual Financial Framework per programme. It
should be clarified that amounts due exceeding the ceiling of 1% of programme
appropriations per fund for 2025 would not be paid in 2025 nor in subsequent years but only
used for the clearance of pre-financing. Unused amounts shall be decommitted in accordance
with the general rules for decommitment at closure.
35 The additional REACT-EU resources stemming from the NextGenerationEU have increased the
funding available in 2021 and 2022 (without national co-financing required) to provide Member States
with rapid assistance for fostering crisis repair and resilient recovery. Other measures include the
Cohesion’s Action for Refugees in Europe (CARE) package, and the Supporting Affordable Energy
initiative (SAFE).
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Amendments to Regulation (EU) 2021/523, establishing the InvestEU Programme (Article
16)
This provision creates a new policy area (fifth window) aimed at supporting STEP
investments under InvestEU, and it accommodates the additional amount of EUR [...] billion
proposed in the context of the MFF review by amending the amounts of the EU guarantee for
the purposes of the STEP. Amendments are also made to reflect the Sovereignty Seal
dimension into InvestEU, as explained under Article 4.
It also proposes additional flexibilities and clarifications to better pursue the objectives of this
initiative. In relation to the combination of portfolios, it is specified that when support from
the financial instruments referred to in Article 7(1) is combined in a financial product in a
subordinated position to the EU guarantee under this Regulation and/or EU guarantee
established by Regulation (EU) 2015/1017, the losses, revenues and repayments as well as
potential recoveries may also be attributed on a non pro rata basis. This amendment aims at
facilitating synergies between the InvestEU and other Union programmes by increasing the
flexibility on the design of blending operations.
To facilitate the uptake of the Member State compartment, it is proposed to slightly increase
the time period available to conclude a guarantee agreement from nine to twelve months from
the conclusion of the contribution agreement. The rules on the membership of the Investment
Committee are also amended to clarify that a non-permanent member may be assigned to a
maximum of two configurations to apply a selection process that allows to constitute the
Investment Committee for the new fifth window in a swift manner.
Annex III of InvestEU Regulation is amended to include the indicators related to the new
STEP window.
Amendments to Regulation (EU) 2021/695, establishing Horizon Europe (Article 17)
This provision aims at providing additional flexibility and funding for the EIC Accelerator.
The Accelerator under Horizon Europe should be able to provide equity-only support to non-
bankable SMEs, including start-ups, and non-bankable small mid-caps, carrying out
innovation in the technologies supported by STEP. Moreover, the unused funds committed for
the EIC Pilot under Horizon2020 should be made available for the purposes of the EIC
Accelerator under Horizon Europe.
Amendments to Regulation (EU) 2021/697, establishing the European Defence Fund (Article
18)
Article 18 amends the Regulation on the European Defence Fund to specify the amount of
additional funds to be implemented through the European Defence Fund.
Amendments to Regulation (EU) 2021/241, establishing the Recovery and Resilience Facility
(Article 19)
This Regulation is amended to increase the ceiling for the amount of estimated costs of the
recovery and resilience plans that Member States can use for the Member State compartment
of InvestEU. In addition to the applicable ceiling of 4% of the recovery and resilience plan’s
financial allocation, Member States can decide to allocate a further 6% to support STEP
investments, therefore up to a total of 10%. Article 29 is amended to ensure the Member
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States identify and submit to the Commission the planned calls for proposals related to the
Platform objectives in order to publish them on the Sovereignty portal.
Entry into force and application (Article 20)
It is proposed that this Regulation, which is directly applicable in all Member States, enters
into force on the day following that of its publication.
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2023/0199 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
establishing the Strategic Technologies for Europe Platform (‘STEP’) and amending
Directive 2003/87/EC, Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057,
(EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695,
(EU) 2021/697 and (EU) 2021/241
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 164, Article 173, Article 175, third paragraph, Article 176, Article 177, Article 178,
Article 182(1) and Article 192(1) thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Economic and Social Committee36,
Having regard to the opinion of the Committee of the Regions37,
Acting in accordance with the ordinary legislative procedure,
Whereas:
(1) Strengthening the competitiveness and resilience of the European economy through
the green and digital transformations has been the EU compass over the last years. The
green and digital transitions anchored in the European Grean Deal38 and the Digital
Decade,39 spurs growth and the modernisation of the EU economy, opening up new
business opportunities and helping gain a competitive advantage on the global
markets. The European Green Deal sets out the roadmap for making the Union’s
economy climate neutral and sustainable in a fair and inclusive manner, tackling
climate and environmental-related challenges. Moreover, the Digital Decade Policy
Programme 2030 sets out a clear direction for the digital transformation of the Union
and for the delivery of digital targets at Union level by 2030, notably concerning
digital skills, digital infrastructures, and the digital transformation of businesses and
public services.
(2) The EU industry has proven its inbuilt resilience but is being challenged. High
inflation, labour shortages, post-COVID supply chains disruptions, rising interest
rates, and spikes in energy costs and input prices are weighing on the competitiveness
of the EU industry. This is paired with strong, but not always fair, competition on the
fragmented global market. The EU has already put forward several initiatives to
36 OJ C [...], [...], p. [...]
37 OJ C [...], [...], p. [...]
38 Communication on The European Green Deal, COM(2019) 640 final. See also European Parliament
resolution of 15 January 2020, and European Council conclusions of 11 December 2020.
39 Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022
establishing the Digital Decade Policy Programme 2030 (OJ L 323, 19.12.2022, p. 4).
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support its industry, such as the Green Deal Industrial Plan,40 the Critical Raw
Materials Act41, the Net Zero Industry Act42, the new Temporary Crisis and Transition
Framework for State aid,43 and REPowerEU.44 While these solutions provide fast and
targeted support, the EU needs a more structural answer to the investment needs of its
industries, safeguarding cohesion and the level playing field in the Single Market and
to reduce the EU’s strategic dependencies.
(3) The uptake and scaling up in the Union of deep and digital technologies, clean
technologies, and biotechnologies will be essential to seize the opportunities and meet
the objectives of the green and digital transitions, thus promoting the competitiveness
of the European industry and its sustainability. Therefore, immediate action is required
to support the development or manufacturing in the Union of such technologies,
safeguarding and strengthening their value chains thereby reducing the Union’s
strategic dependencies, and addressing existing labour and skills shortages in those
sectors through trainings and apprenticeships and the creation of attractive, quality
jobs accessible to all.
(4) There is a need to support critical technologies in the following fields: deep and digital
technologies, clean technologies, and biotechnologies (including the respective critical
raw materials value chains), in particular projects, companies and sectors with a
critical role for EU’s competitiveness and resilience and its value chains. By way of
example, deep technologies and digital technologies should include microelectronics,
high-performance computing, quantum technologies (i.e., computing, communication
and sensing technologies), cloud computing, edge computing, and artificial
intelligence, cybersecurity technologies, robotics, 5G and advanced connectivity and
virtual realities, including actions related to deep and digital technologies for the
development of defence and aerospace applications. Clean technologies should
include, among others, renewable energy; electricity and heat storage; heat pumps;
electricity grid; renewable fuels of non-biological origin; sustainable alternative fuels;
electrolysers and fuel cells; carbon capture, utilisation and storage; energy efficiency;
hydrogen and its related infratructure; smart energy solutions; technologies vital to
sustainability such as water purification and desalination; advanced materials such as
nanomaterials, composites and future clean construction materials, and technologies
for the sustainable extraction and processing of critical raw materials. Biotechnology
should be considered to include technologies such as biomolecules and its
applications, pharmaceuticals and medical technologies vital for health security, crop
biotechnology, and industrial biotechnology, such as for waste disposal, and
biomanufacturing. The Commission may issue guidance to further specify the scope of
the technologies in these three fields considered to be critical in accordance with this
Regulation, in order to promote a common interpretation of the projects, companies
and sectors to be supported under the respective programmes in light of the common
strategic objective. Moreover, technologies in any of these three fields which are
subjects of an Important Project of Common European Interest (IPCEI) approved by
the Commission pursuant to Article 107(3), point (b) TFEU should be deemed to be
critical, and individual projects within the scope of such an IPCEI should be eligible
40 Communication on A Green Deal Industrial Plan for the Net-Zero Age, COM(2023) 62 final.
41 COM(2023) 160 final
42 COM(2023) 161 final
43 Communication on a Temporary Crisis and Transition Framework for State Aid measures (OJ C 101,
17.3.2023, p. 3).
44 Regulation (EU) 2023/435 as regards REPowerEU (OJ L 63, 28.2.2023, p. 1).
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for funding, in accordance with the respective programme rules, to the extent that the
identified funding gap and the eligible costs have not yet been completely covered.
(5) Strengthening the manufacturing capacity of key technologies in the Union will not be
possible without a sizeable skilled workforce. However, labour and skills shortages
have increased in all sectors including those considered key for the green and digital
transition and endanger the rise of key technologies, also in the context of
demographic change. Therefore, it is necessary to boost the activation of more people
to the labour market relevant for strategic sectors, in particular through the creation of
jobs and apprenticeships for young, disadvantaged persons, in particular, young people
not in employment, education or training. Such support will complement a number of
other actions aimed at meeting the skills needs stemming from the transition, outlined
in the EU Skills Agenda.45
(6) The scale of investments needed for the transition require a full mobilisation of
funding available under existing EU programmes and funds, inclusive those granting a
budgetary guarantee for financing and investment operations and implementation of
financial instruments and blending operations. Such funding should be deployed in a
more flexible manner, to provide timely and targeted support for critical technologies
in strategic sectors. Therefore, a Strategic Technologies for Europe Platform (‘STEP’)
should give a structural answer to the Union investment needs by helping to better
channel the existing EU funds towards critical investments aimed at supporting the
development or manufacturing of critical technologies, while preserving a level
playing field in the Single Market, thereby preserving cohesion and aiming at a
geographically balanced distribution of projects financed under the STEP in
accordance with the respective programme mandates.
(7) The STEP should identify resources which should be implemented within the existing
Union programmes and funds, the InvestEU, Horizon Europe, European Defence Fund
and Innovation Fund. This should be accompanied by providing additional funding of
EUR 10 billion. Of this, EUR 5 billion should be used to increase the endowment of
the Innovation Fund46 and EUR 3 billion to increase the total amount of the EU
guarantee available for the EU compartment under the InvestEU Regulation to EUR
7,5 billion,47 taking into account the relevant provisioning rate. EUR 0.5 billion should
be made available to increase the financial envelope under the Horizon Europe
Regulation,48 which should be amended accordingly; and EUR 1.5 billion to the
European Defence Fund.49
(8) A Sovereignty Seal should be awarded to projects contributing to the STEP objectives,
provided that the project has been assessed and complies with the minimum quality
requirements, in particular eligibility, exclusion and award criteria, provided by a call
for proposals under Horizon Europe, the Digital Europe programme,50 the EU4Health
45 Communication on a European Skills Agenda for sustainable competitiveness, social fairness and
resilience, COM(2020) 274 final.
46 Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading (OJ L 275,
25.10.2003, p. 32).
47 Regulation (EU) 2021/523 establishing the InvestEU Programme (OJ L 107, 26.3.2021, p. 30).
48 Regulation (EU) 2021/695 establishing Horizon Europe (OJ L 170, 12.5.2021, p. 1).
49 Regulation (EU) 2021/697 establishing the European Defense Fund (OJ L 170, 12.5.2021, p. 149.)
50 Regulation (EU) 2021/694 establishing the Digital Europe Programme (OJ L 166, 11.5.2021, p. 1).
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programme,51 the European Defence Fund or the Innovation Fund, and regardless of
whether the project has received funding under those instruments. These minimum
quality requirements will be established with a view to identify high quality projects.
This Seal should be used as a quality label, to help projects attract public and private
investments by certifying its contribution to the STEP objectives. Moreover, the Seal
will promote better access to EU funding, notably by facilitating cumulative or
combined funding from several Union instruments.
(9) To that end, it should be possible to rely on assessments made for the purposes of
other Union programmes in accordance with Articles 126 and 127 of Regulation (EU,
Euratom) 2018/1046,52 in order to reduce administrative burden for beneficiaries of
Union funds and encourage investment in priority technologies. Provided they comply
with the provisions of the RRF Regulation,53 Member States should consider including
actions awarded the Sovereignty Seal when preparing their recovery and resilience
plans and when proposing their Recovering and Resilience Plans and when deciding
on investment projects to be financed from its share of the Modernisation Fund. The
Sovereignty Seal should also be taken into account by the Commission in the context
of the procedure provided for in Article 19 of the EIB Statute and of the policy check
laid down in Article 23 of the InvestEU Regulation. In addition, the implementing
partners should be required to examine projects having been awarded the Sovereignty
Seal in case they fall within their geographic and activity scope in accordance with
Article 26(5) of that Regulation. Authorities in charge of programmes falling under
STEP should also be encouraged to consider support for strategic projects identified in
accordance with the Net Zero Industry and the Critical Raw Materials Acts that are
within the scope of Article 2 of the Regulation and for which rules on cumulative
funding may apply.
(10) A new publicly available website (the ‘Sovereignty Portal’) should be set up by the
Commission to provide information on available support to companies and project
promoters seeking funds for STEP investments. To that end, it should display in an
accessible and user-friendly manner the funding opportunities for STEP investments
available under the EU budget. This should include information about directly
managed programmes, such as Horizon Europe, the Digital Europe programme, the
EU4Health programme, and the Innovation Fund, and also other programmes such as
InvestEU, the RRF, and cohesion policy funds. Moreover, the Sovereignty Portal
should help increase the visibility for STEP investments towards investors, by listing
the projects that have been awarded a Sovereignty Seal. The Portal should also list the
national competent authorities responsible for acting as contact points for the
implementation of the STEP at national level.
(11) While the STEP relies on the reprogramming and reinforcement of existing
programmes for supporting strategic investments, it is also an important element for
testing the feasibility and preparation of new interventions as a step towards a
European Sovereignty Fund. The evaluation in 2025 will assess the relevance of the
51 Regulation (EU) 2021/522 establishing a Programme for the Union’s action in the field of health,
EU4Health Programme (OJ L 107, 26.3.2021, p. 1).
52 Regulation (EU, Euratom) 2018/1046 on the financial rules applicable to the general budget of the
Union (OJ L 193, 30.7.2018, p. 1).
53 Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p.
17).
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actions undertaken and serve as basis for assessing the need for an upscaling of the
support towards strategic sectors.
(12) Directive 2003/87/EC54 should be amended to allow for additional financing with a
financial envelope for the period 2024-2027 of EUR 5 billion. The Innovation Fund
supports investments in innovative low-carbon technologies, which is a scope that is to
be covered by the STEP. The increase in volume of the Innovation Fund should
therefore allow to provide financing responding to the objective of supporting the
development or manufacturing in the Union of critical clean technologies. In line with
the objectives of ensuring cohesion and promoting the Single Market, and in order to
support the green transition and the development of clean technologies throughout the
Union, the additional financial envelope should be made available through calls for
proposals open to entities from Member States whose average GDP per capita is
below the EU average of the EU-27 measured in purchasing power standards (PPS)
and calculated on the basis of Union figures for the period 2015-2017.
(13) In order to extend support possibilities for investments aimed at strengthening
industrial development and reinforcement of value chains in strategic sectors, the
scope of support from the ERDF should be extended by providing for new specific
objectives under the ERDF, without prejudice to the rules on eligibility of expenditure
and climate spending as set out in Regulation (EU) 2021/106055 and Regulation (EU)
2021/105856. In strategic sectors, it should also be possible to support productive
investments in enterprises other than SMEs, which can make a significant contribution
to the development of less developed and transition regions, as well as in more
developed regions of Member States with a GDP per capita below the EU average.
Managing authorities are encouraged to promote the collaboration between large
enterprises and local SMEs, supply chains, innovation and technology ecosystems.
This would allow reinforcing Europe’s overall capacity to strengthen its position in
those sectors through providing access to all Member States for such investments, thus
counteracting the risk of increasing disparities.
(14) The scope of support of the JTF, laid down in Regulation (EU) 2021/1056,57 should
also be extended to cover investments in clean technologies contributing to the
objectives of the STEP by large enterprises, provided that they are compatible with the
expected contribution to the transition to climate neutrality as set out in the territorial
just transition plans. The support provided for such investments should not require a
revision of the territorial just transition plan where that revision would be exclusively
linked to the gap analysis justifying the investment from the perspective of job
creation.
(15) The ESF+,58 being the main EU Fund for investment in people, provides a key
contribution to promote the development of skills. In order to facilitate the use of that
Fund for the STEP objectives, it should be possible to use the ESF+ to cover
54 Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading (OJ L 275,
25.10.2003, p. 32).
55 Regulation (EU) 2021/1060 laying down common provisions (OJ L 231, 30.6.2021, p. 159).
56 Regulation (EU) 2021/1058 on the European Regional Development Fund and on the Cohesion Fund
(OJ L 224, 24.6.2021, p. 31).
57 Regulation (EU) 2021/1056 establishing the Just Transition Fund (OJ L 231, 30.6.2021, p. 1).
58 Regulation (EU) 2021/1057 establishing the European Social Fund Plus (ESF+) (OJ L 231 30.6.2021,
p.21).
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investments aimed at achieving a skilled and resilient workforce ready for the future
world of work.
(16) In order to help accelerate investments and provide immediate liquidity for
investments supporting the STEP objectives under the ERDF, the ESF+59 and the JTF,
an additional amount of exceptional pre-financing should be provided in the form of a
one-off payment with respect to the priorities dedicated to investments supporting the
STEP objectives. The additional pre-financing should apply to the whole of the JTF
allocation given the need to accelerate its implementation and the strong links of the
JTF to support Member States towards the STEP objectives. The rules applying for
those amounts of exceptional pre-financing should be consistent with the rules
applicable to pre-financing set out in Regulation (EU) 2021/1060. Moreover, to further
incentivise the uptake of such investments and ensure its faster implementation, the
possibility for an increased EU financing rate of 100% for the STEP priorities should
be available. When implementing the new STEP objectives, managing authorities are
encouraged to apply certain social criteria or promote social positive outcomes, such
as creating apprenticeships and jobs for young disadvantaged persons, in particular
young persons not in employment, education or training, applying the social award
criteria in the Directives on public procurement when a project is implemented by a
body subject to public procurement, and paying the applicable wages as agreed
through collective bargaining.
(17) The Common Provisions Regulation60 should be amended to allow that projects
having been awarded a Sovereignty Seal could benefit from better access to EU
funding, notably by facilitating cumulative or combined funding from several Union
instruments. To that end, it should be possible for managing authorities to grant
support from the ERDF or the ESF+ directly, for operations attributed a Sovereignty
Seal.
(18) The regulatory framework for the implementation of the 2014-2020 programmes has
been adapted over the past years to provide Member States and regions with additional
with additional flexibility in terms of implementation rules and more liquidity to tackle
the effects of the COVID-19 pandemic and the war or aggression against Ukraine.
These measures, introduced at the end of the programming period, require sufficient
time and administrative resources to be fully exploited and implemented; also at a time
where Member States will focus resources on revising the 2021-2027 operational
programmes linked to the STEP objectives. With a view to alleviate the administrative
burden on programme authorities and to prevent possible loss of funds at closure for
purely administrative reasons, the deadlines for the administrative closure of the
programmes under the 2014-2020 period should be extended in Regulation (EU) No
1303/201361 and Regulation (EU) No 223/201462. More specifically, the deadline for
the submission of that final payment application should be extended by 12 months.
Furthermore, the deadline for the submission of the closure documents should also be
extended by 12 months. In the context of this amendment, it is appropriate to clarify
that distribution of food and material bought until the end of the eligibility period
59 Regulation (EU) 2021/1057 establishing the European Social Fund Plus (ESF+) (OJ L 231, 30.6.2021,
p. 21).
60 Regulation (EU) 2021/1060 laying down common provisions (OJ L 231, 30.6.2021, p. 159).
61 Regulation (EU) 1303/2013 laying down common provisions (OJ L 347, 20.12.2013, p. 320).
62 Regulation (EU) 223/2014 on the Fund for European Aid on the Most Deprived (OJ L 72, 12.3.2014, p.
1).
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(end-2023) may continue after that date. In order to ensure a sound implementation of
the EU budget and respect for the payment ceilings, payments to be made in 2025
should be capped at 1 % of the financial appropriations from resources under the
Multiannual Financial Framework per programme. Amounts due exceeding the ceiling
of 1% of programme appropriations per fund for 2025 would not be paid in 2025 nor
in subsequent years but only used for the clearance of pre-financing. Unused amounts
shall be decommitted in accordance with the general rules for decommitment at
closure.
(19) InvestEU is the EU flagship programme to boost investment, especially the green and
digital transition, by providing demand-driven financing, including through blending
mechanisms, and technical assistance. Such approach contributes to crowd in
additional public and private capital. Given the high market demand of InvestEU
guarantee, the EU compartment of InvestEU should be reinforced to correspond to the
objectives of the STEP. This will, among other things, reinforce InvestEU’s existing
possibility to invest in projects forming part of an IPCEI, within the identified critical
technology sectors. In addition, Member States are encouraged to contribute to the
InvestEU Member State compartment to support financial products in line with the
STEP objectives, without prejudice to applicable State aid rules. It should be possible
for Member States to include as a measure in their recovery and resilience plans a cash
contribution for the purpose of the Member State compartment of InvestEU to support
objectives of the STEP. That additional contribution to support objectives of the STEP
could reach up to 6% of their recovery and resilience plan’s total financial allocation
to the Member State compartment of InvestEU. Additional flexibility and
clarifications should also be introduced to better pursue the objectives of the STEP.
(20) Horizon Europe is the EU’s key funding programme for research and innovation, and
its European Innovation Council (EIC) provides for support for innovations with
potential breakthrough and disruptive nature with scale-up potential that may be too
risky for private investors. Additional flexibility should be provided for under Horizon
Europe, so that the EIC Accelerator can provide equity-only support to non-bankable
SMEs, including start-ups, and non-bankable SMEs and small mid-caps, carrying out
innovation in the technologies supported by the STEP and regardless of whether they
previously received other types of support from the EIC Accelerator. The
implementation of the EIC Fund is currently limited to a maximum investment amount
of EUR 15 million except in exceptional cases and cannot accommodate follow-on
financing rounds or larger investment amounts. Allowing for equity-only support for
non-bankable SMEs and small mid-caps would address the existing market gap with
investments needs in the range of EUR 15 to 50 million. Moreover, experience has
shown that the amounts committed for the EIC Pilot under Horizon2020 are not fully
used. These unused funds should be made available for the purposes of the EIC
Accelerator under Horizon Europe. The Horizon Europe Regulation should also be
amended to reflect the increased envelope for the European Defence Fund.
(21) The European Defence Fund is the leading programme for enhancing the
competitiveness, innovation, efficiency and technological autonomy of the Union’s
defence industry, thereby contributing to the Union’s open strategic autonomy. The
development of defence capabilities is crucial, as it underpins the capacity and the
autonomy of the European industry to develop defence products and the independence
of Member States as the end-users of such products. The additional envelope should
therefore be made available to support actions in the field of deep and digital
technologies contributing to the development of defence applications.
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(22) Since the objectives of this Regulation, namely to strengthen European sovereignty,
accelerate the Union’s green and digital transitions and enhance its competitiveness,
and reduce its strategic dependencies cannot be sufficiently achieved by the Member
States, but can rather be better achieved at Union level, the Union may adopt measures
in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on
European Union. In accordance with the principle of proportionality as set out in that
Article, this Regulation does not go beyond what is necessary to achieve those
objectives.
HAVE ADOPTED THIS REGULATION:
CHAPTER 1
STEP
Article 1
Subject matter
This Regulation establishes a Strategic Technologies for Europe Platform (‘STEP’ or ‘the
Platform’) to support critical and emerging strategic technologies .
It lays down the objectives of the Platform, the amount of financial support available under
the Platform, and rules for the implementation of the Sovereignty Seal and Sovereignty portal
and for reporting on the Platform objectives.
Article 2
STEP objectives
1. To strengthen European sovereignty and security, accelerate the Union’s green and
digital transitions and enhance its competitiveness, reduce its strategic dependencies,
favour a level playing field in the Single Market for investments throughout the
Union, and promote inclusive access to attractive, quality jobs, the Platform shall
pursue the following objectives:
(a) supporting the development or manufacturing throughout the Union, or
safeguarding and strengthening the respective value chains, of critical
technologies in the following fields:
(i) deep and digital technologies
(ii) clean technologies
(iii) biotechnologies
(b) addressing shortages of labour and skills critical to all kinds of quality jobs in
support of the objective under point (a).
2. The technologies referred to in point (a) of the first paragraph, shall be deemed to be
critical where they meet at least one of the following conditions:
(a) bring an innovative, cutting-edge element with significant economic potential
to the Single Market;
(b) contribute to reduce or prevent strategic dependencies of the Union.
3. Where an Important Project of Common European Interest (IPCEI) approved by the
Commission pursuant to Article 107(3), point (b) TFEU relates to any of the
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technology fields referred to in point (a) of paragraph 1, the relevant technologies
shall be deemed to be critical.
4. The value chain for the manufacturing of critical technologies referred to in the first
paragraph relates to final products, as well as key components, specific machinery
and critical raw materials primarily used for the production of those products.
1. Implementation of the Platform shall be supported, in particular, through:
Article 3
Financial Support
(a) a Union guarantee referred to in Article 4(1) of Regulation (EU) 2021/523 with
the indicative amount of EUR 7 500 000 000 That guarantee shall be
implemented in accordance with Regulation (EU) 2021/523;
(b) an amount of EUR 500 000 000 in current prices of the financial envelope
referred to in point (i) of Article 12(2)(c) of Regulation (EU) 2021/695. That
amount shall be implemented in accordance with Regulation (EU) 2021/695;
(c) an amount of EUR 5 000 000 000 in current prices of the financial envelope
referred to in the sixth subparagraph of Article 10a(8) of Directive 2003/87/EC.
That amount shall be implemented within the Innovation Fund in accordance
with the rules of Article 10a(8) of Directive 2003/87/EC and Commission
Delegated Regulation [2019/856].
(d) An amount of EUR 1 500 000 000 in current prices of the financial envelope
refered to in Article 4(1) of Regulation (EU) 2021/697. That amount shall be
implemented in accordance with Regulation (EU) 2021/697.
2. The amounts referred to in the paragraph 1 shall be used with the aim of achieving
the objectives referred to in Article 2.
Article 4
Sovereignty Seal and cumulative funding
1. The Commission shall award a Sovereignty Seal to any action contributing to any of
the Platform objectives, provided the action has been assessed and complies with the
minimum quality requirements, in particular eligibility, exclusion and award criteria,
provided by a call for proposals under Regulation (EU) 2021/695, Regulation (EU)
2021/694, Regulation (EU) 2021/697, Regulation (EU) 2021/522, or Commission
Delegated Regulation (EU) 2019/856.
2. The Sovereignty Seal may be used as a quality label, in particular for the purposes
of:
(a) receiving support for the action under another Union fund or programme in
accordance with the rules applicable to that fund or programme, or
(b) financing the action through cumulative or combined funding with another
Union instrument in line with the rules of the applicable basic acts.
3. When revising their recovery and resilience plans in accordance with Regulation
(EU) 2021/241, Member States shall, without prejudice to the provisions of that
Regulation, consider as a priority action which have been awarded a Sovereignty
Seal in accordance with paragraph 1.
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4. When deciding on investment projects to finance from their respective shares of the
Modernisation Fund in accordance with Article 10d of Directive 2003/87/EC,
Member States shall consider as a priority project for critical clean technologies
which have received the Sovereignty Seal in accordance with paragraph 1. In
addition, Member States may decide to grant national support to projects with a
Sovereignty Seal contributing to the Platform objective referred to in Article 2(1),
point (a)(ii).
5. Under Regulation (EU) 2021/523, the Sovereignty Seal shall be taken into account in
the context of the procedure provided for in Article 19 of the European Investment
Bank Statute and of the policy check as laid down in Article 23(3) of that Regulation.
In addition, the implementing partners shall examine projects having been awarded
the Sovereignty Seal in case they fall within their geographic and activity scope as
laid down in Article 26(5) of that Regulation.
6. Strategic projects identified in accordance with the [Net Zero Industry Act] and the
[Critical Raw Materials Act] within the scope of Article 2 that receive a contribution
under the Programmes refered to in Article 3 may also receive a contribution from
any other Union programme, including Funds under shared management, provided
that the contributions do not cover the same costs. The rules of the relevant Union
programme shall apply to the corresponding contribution to the strategic project. The
cumulative funding shall not exceed the total eligible costs of the strategic project.
The support from the different Union programmes may be calculated on a pro-rata
basis in accordance with the documents setting out the conditions for support.
7. The award of a Sovereignty Seal and provision of cumulative funding is without
prejudice to applicable State aid rules and to the Union’s international obligations.
Article 5
Monitoring of implementation
1. The Commission shall monitor the implementation of the Platform and measure the
achievement of the Platform objectives set out in Article 2. The monitoring of
implementation shall be targeted and proportionate to the activities carried out under
the Platform.
2. The monitoring system of the Commission shall ensure that data for monitoring the
implementation of the activities carried out under the Platform and the results of
those activities are collected efficiently, effectively and in a timely manner.
3. The Commission shall report on the expenditure financed by the Platform. It shall, as
appropriate, report on the achievements related to each of the specific Platform
objectives.
Article 6
Sovereignty portal
1. The Commission shall establish a dedicated publicly available website (the
‘Sovereignty portal’), providing investors with information about funding
opportunities for projects linked to the Platform objectives and grant visibility to
those projects, in particular by displaying the following information:
(a) ongoing and upcoming calls for proposals and calls for tender linked to the
Platform objectives under the respective programmes and funds;
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(b) projects that have been awarded a Sovereignty Seal quality label in accordance
with Article 4;
(c) projects that have been identified as strategic projects under the [Net-Zero
Industry Act] and the [Critical Raw Materials Act], to the extent that they fall
within the scope of Article 2;
(d) contacts to the national competent authorities designated in accordance with
paragraph 4;
2. The Sovereignty portal shall also display information about the implementation of
the Platform and in relation to Union budget expenditure as referred to in Article 5,
as well as the performance indicators defined under the respective programmes.
3. The Sovereignty portal shall be launched at the [date of the entry into force of this
Regulation] and shall be updated by the Commission regularly.
4. By [3 months after the entry into force of this Regulation], Member State shall
designate one national competent authority to act as the main point of contact for the
implementation of the Platform at national level.
Article 7
Annual report
1. The Commission shall provide an annual report to the European Parliament and the
Council on the implementation of the Platform.
2. The annual report shall include consolidated information on the progress made in
implementing the Platform objectives under each of the programmes and funds.
3. The annual report shall also include the following information:
(a) overall expenditure of the STEP financed under the respective programmes;
(b) the performance of the STEP based on the performance indicators defined
under the respective programmes.
Article 8
Evaluation of the Platform
1. By 31 December 2025, the Commission shall provide the European Parliament and
the Council with an evaluation report on the implementation of the Platform.
2. The evaluation report shall, in particular, assess to which extent the objectives have
been achieved, the efficiency of the use of the resources and the European added
value. It shall also consider the continued relevance of all objectives and actions, in
view of their potential upscaling.
3. Where appropriate, the evaluation shall be accompanied by a proposal for
amendments of this Regulation.
CHAPTER 2
AMENDMENTS
Article 9
Amendments to Directive 2003/87/EC [ETS]
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Directive 2003/87/EC is amended as follows:
(1) In Article 10a(8), the following sixth subparagraph is inserted:
‘In addition to the allowances referred to in the first to fifth subparagraphs of this
paragraph, the Innovation Fund shall also implement a financial envelope for the
period from 1 January 2024 to 31 December 2027 of EUR 5 000 000 000 in current
prices for supporting investments contributing to the STEP objective referred to in
Article 2, point (a)(ii) of Regulation .../...63 [STEP Regulation]. This financial
envelope shall be made available to support investments only in Member States
whose average GDP per capita is below the EU average of the EU-27 measured in
purchasing power standards (PPS) and calculated on the basis of Union figures for
the period 2015-2017’
Amendments to Regulation (EU) 2021/1058 [ERDF and CF]
Article 10
Regulation (EU) 2021/1058 is amended as follows:
(1) In Article 3(1), point (a), the following point is added:
‘(vi) supporting investments contributing to the STEP objectives referred to in
Article 2 of Regulation .../...64 [STEP Regulation]’
(2) In Article 3(1), point (b), the following point is added:
‘(ix) supporting investments contributing to the STEP objective referred to in Article
2(1), point (a)(ii) of Regulation .../... [STEP Regulation]’
(3) In Article 3, the following paragraph 1a is inserted:
The resources under the specific objective referred to in Article 3(1), first
subparagraph, points (a)(vi) and (b)(ix) shall be programmed under dedicated
priorities corresponding to the respective policy objective.
The Commission shall pay 30 % of the ERDF allocation to that priority as set out in
the decision approving the programme amendment as exceptional one-off pre-
financing in addition to the yearly pre-financing for the programme provided for in
Article 90(1) and (2) of Regulation (EU) 2021/1060 or in Article 51(2), (3) and (4) of
Regulation (EU) 2021/1059. The exceptional pre-financing shall be paid by 31
December 2024, provided the Commission has adopted the decision approving the
programme amendment by 31 October 2024.
In accordance with Article 90 (5) of Regulation (EU) 2021/1060 and Article 51(5) of
Regulation (EU) 2021/1059, the amount paid as exceptional pre-financing shall be
cleared no later than with the final accounting year.
In accordance with Article 90(6) of Regulation (EU) 2021/1060, any interest
generated by the exceptional pre-financing shall be used for the programme
concerned in the same way as the ERDF and shall be included in the accounts for the
final accounting year.
63 Regulation …/… of the European Parliament and of the Council … [insert full title and OJ reference].
64 Regulation …/… of the European Parliament and of the Council … [insert full title and OJ reference].
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In accordance with Article 97(1) of Regulation (EU) 2021/1060, the exceptional pre-
financing shall not be suspended.
In accordance with Article 105 (1) of Regulation (EU) 2021/1060, the pre-financing
to be taken into account for the purposes of calculating amounts to be de-committed
shall include the exceptional pre-financing paid.
By way of derogation from Article 112 of Regulation (EU) 2021/1060, the maximum
co-financing rates for dedicated priorities established to support the STEP objectives
shall be increased to 100 %.’
(4) In Article 5(2), the following point (e) is inserted:
‘(e) when they contribute to the specific objective under PO 1 set out in Article 3(1),
first subparagraph, point (a)(vi) or to the specific objective under PO 2 set out in
point (b)(ix) of that subparagraph, in less developed and transition regions, as well as
more developed regions in Member States whose average GDP per capita is below
the EU average of the EU-27 measured in purchasing power standards (PPS) and
calculated on the basis of Union figures for the period 2015-2017.
Point (e) shall apply to Interreg programmes where the geographical coverage of the
programme within the Union consists exclusively of categories of regions set out in
that point.’
(5) In Article 5, the following new paragraph 3a is inserted:
‘3a. In order to contribute to the specific objectives under PO 1 set out in Article
3(1), first subparagraph, point (a)(vi) and under PO 2 set out in point (b)(ix) of that
subparagraph, the ERDF shall also support training, life-long learning, reskilling and
education activities’.
(6) In Annex I, Table I, the following row is added under policy objective 1:
(vi)
supporting
investments contributing
to the STEP objectives
referred to in Article 2 of
Regulation .../... [STEP
Regulation]
Any RCO listed for
specific objectives (i),
(iii) and (iv)
Any RCR listed for
specific objectives (i),
(iii) and (iv)
RCO125 Firms:
Enterprises supported
linked primarily to deep
and digital technologies
productive investments
RCO126 Firms:
Enterprises supported
linked primarily to clean
technologies productive
investments
RCO127 Firms:
Enterprises supported
linked primarily to
biotechnologies
productive investments
[These indicators are to
be reported as subsets of
RC001-RCO04]
(7) In Annex I, Table I, the following row is added under policy objective 2:
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(ix)
supporting
investments contributing
to the STEP objectives
referred to in Article 2 of
Regulation .../... [STEP
Regulation]
Any RCO listed for
specific objectives (i),
(iii), (iv) and (vi) under
policy objective 1
Any RCR listed for
specific objectives (i),
(iii) and (iv) under policy
objective 1
RCO125 Firms:
Enterprises supported
linked primarily to deep
and digital technologies
productive investments
RCO126 Firms:
Enterprises supported
linked primarily to clean
technologies productive
investments
RCO127 Firms:
Enterprises supported
linked primarily to
biotechnologies
productive investments
[These indicators are to
be reported as subsets of
RC001-RCO04]
(8) In the Table of Annex II, the following row is added under policy objective 1:
(vi)
supporting
investments contributing
to the STEP objectives
referred to Article 2 of
Regulation .../... [STEP
Regulation]
Any CCO listed for
specific objectives (i),
(iii) and (iv) under policy
objective 1
Any CCR listed for
specific objectives (i),
(iii) and (iv) under
policy objective 1
(9) In the Table of Annex II, the following row is added under policy objective 2:
(ix)
supporting
investments contributing
to the STEP objectives
referred to Article 2 of
Regulation .../... [STEP
Regulation]
Article 11
Any CCO listed for
specific objectives (i),
(iii) and (iv) under policy
objective 1
Any CCR listed for
specific objectives (i),
(iii) and (iv) under
policy objective 1
Regulation (EU) 2021/1056 is amended as follows:
(1) Article 2 is replaced by the following:
Amendments to Regulation (EU) 2021/1056 [JTF]
‘In accordance with the second subparagraph of Article 5(1) of Regulation (EU)
2021/1060, the JTF shall contribute to the specific objective of enabling regions and
people to address the social, employment, economic and environmental impacts of
the transition towards the Union’s 2030 targets for energy and climate and a climate-
neutral economy of the Union by 2050, based on the Paris Agreement. The JTF may
also support investments contributing to the STEP objective referred to in Article
2(1), point (a)(ii) of Regulation .../... [STEP Regulation].’
(2) In Article 8(2) the following subparagraph is inserted:
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‘The JTF may also support productive investments in enterprises other than SMEs
contributing to the STEP objectives referred to in Article 2 of Regulation .../...65
[STEPRegulation]. That support may be provided irrespective of whether the gap
analysis was carried out in accordance with Article 11(2)(h) and irrespective of its
outcome. Such investments shall only be eligible where they do not lead to relocation
as defined in point (27) of Article 2 of Regulation (EU) 2021/1060. The provision of
such support shall not require a revision of the territorial just transition plan where
that revision would be exclusively linked to the gap analysis.’
(3) In Article 10, the following paragraph 4 is added:
‘The Commission shall pay 30% of the JTF allocation, including amounts transferred
in line with Article 27 of Regulation EU 2021/1060, to a programme as set out in the
decision approving the programme as exceptional one-off pre-financing in addition
to the yearly pre-financing for the programme provided for in Article 90(1) and (2)
of Regulation (EU) 2021/1060. The exceptional pre-financing shall be paid as from
[entry into force of this Regulation].
In accordance with Article 90(5) of Regulation (EU) 2021/1060, the amount paid as
exceptional pre-financing shall be cleared no later than with the final accounting
year.
In accordance with Article 90(6) of Regulation (EU) 2021/1060, any interest
generated by the exceptional pre-financing shall be used for the programme
concerned in the same way as the ERDF and shall be included in the accounts for the
final accounting year.
In accordance with Article 97(1) of Regulation (EU) 2021/1060, the exceptional pre-
financing shall not be suspended.
In accordance with Article 105(1) of Regulation (EU) 2021/1060, the pre-financing
to be taken into account for the purposes of calculating amounts to be de-committed
shall include the exceptional pre-financing paid.
By way of derogation from Article 112 of Regulation (EU) 2021/1060, the maximum
co-financing rates for dedicated priorities established to support the STEP objectives
shall be increased to 100 %.’
Article 12
Amendments to Regulation (EU) 2021/1057 [ESF+]
Regulation (EU) 2021/1057 is amended as follows:
(1) A new article 12a is inserted:
‘Article 12a
In addition to the pre-financing for the programme provided for in Article 90(1) and
(2) of Regulation (EU) 2021/1060, where the Commission approves an amendment
of a programme including one or more priorities dedicated to operations supported
by the ESF+ contributing to the STEP objectives referred to in Article 2 of
65 Regulation …/… of the European Parliament and of the Council … [insert full title and OJ reference].
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Regulation .../...66 [STEP Regulation], it shall make an exceptional pre-financing of
30% on the basis of the allocation to those priorities. The exceptional pre-financing
shall be paid by 31 December 2024, provided the Commission has adopted the
decision approving the programme amendment by 31 October 2024.
In accordance with Article 90(5) of Regulation (EU) 2021/1060, the amount paid as
exceptional pre-financing shall be cleared no later than with the final accounting
year.
In accordance with Article 90(6) of Regulation (EU) 2021/1060, any interest
generated by the exceptional pre-financing shall be used for the programme
concerned in the same way as the ESF+ and shall be included in the accounts for the
final accounting year.
In accordance with Article 97(1) of Regulation (EU) 2021/1060, the exceptional pre-
financing shall not be suspended.
In accordance with Article 105(1) of Regulation (EU) 2021/1060, the pre-financing
to be taken into account for the purposes of calculating amounts to be de-committed
shall include the exceptional pre-financing paid.
By way of derogation from Article 112 of Regulation (EU) 2021/1060, the maximum
co-financing rates for dedicated priorities established to support the STEP objectives
shall be increased to 100 %.’
Article 13
Amendments to Regulation (EU) 2021/1060 [CPR]
Regulation (EU) 2021/1060 is amended as follows:
(1) In Article 2, point (45) is replaced by the following:
‘(45) ‘Seal of Excellence’ means the quality label attributed by the Commission in
respect of a proposal, which shows that the proposal which has been assessed in a
call for proposals under a Union instrument is deemed to comply with the minimum
quality requirements of that Union instrument, but could not be funded due to lack of
budget available for that call for proposals, and might receive support from other
Union or national sources of funding; or the ‘Sovereignty Seal’ referred to in
Article 4 of Regulation .../...67 [STEP Regulation].’
(2) In Article 14(5), the first subparagraph is replaced by the following:
‘In accordance with the second subparagraph of Article 10(4) of the InvestEU
Regulation, where a guarantee agreement has not been concluded within 12 months
from the conclusion of the contribution agreement, the contribution agreement shall
be terminated or prolonged by mutual agreement.’
(3) In Article 49, the following paragraph 2a is inserted:
‘Where support is programmed for the STEP objectives referred to in Article 2 of
Regulation .../... [STEP Regulation], the managing authority shall ensure that all the
information to be published in accordance with paragraph 2 of this Article is also
submitted to the Commission in the format set out in paragraph 4 of this Article for
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publication on the Sovereignty Portal set out in Article 6 of Regulation .../... [STEP
Regulation], including a timetable of the planned calls for proposals that is updated
at least three times a year, as well as the link to the calls for proposals on the day of
their publication.’
(4) In the Annex I, Table 1, the following rows are added:
INTERVENTION FIELD
145a
145b
188
Support for the
development of skills or
access to employment in
deep and digital
technologies,
biotechnologies.
Support for the
development of skills or
access to employment in
clean technologies.
Productive investments
in large enterprises
linked primarily to clean
technologies.
189 Productive investments
in SMEs linked
primarily to clean
technologies.
190 Productive investments
in large enterprises
linked primarily to
biotechnologies.
191 Productive investments
in SMEs linked
primarily
to
biotechnologies.
192 Productive investments
in large enterprises
linked primarily to deep
and digital technologies.
193 Productive investments
in SMEs linked
primarily to deep and
digital technologies.
Coefficient for the
calculation of support to
climate change
objectives
Coefficient for the
calculation of support to
environmental objectives
0%
0%
100%
40%
100%
40%
100%
40%
0%
0%
0%
0%
0%
0%
0%
0%
(5) In Annex I, Table 6, the following row is added:
11 Contributing to skills
and jobs in deep and
digital technologies,
clean technologies,
biotechnologies
0%
0%
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Article 14
Amendments to Regulation (EU) No 1303/2013 [CPR]
Regulation (EU) No 1303/2013 is amended as follows:
(1) In Article 135, the following paragraph 6 is added:
‘6. By way of derogation from paragraph 2, the deadline for the submission of the
final application for an interim payment for the final accounting year shall be 31 July
2025. The last application for interim payment submitted by 31 July 2025 shall be
deemed to be the final application for an interim payment for the final accounting
year.
Amounts from resources other than REACT-EU reimbursed by the Commission as
interim payments in 2025 shall not exceed 1 % of the total financial appropriations to
the programme concerned by Fund, REACT-EU resources excluded. Amounts that
would be due to be paid by the Commission in 2025 exceeding this percentage shall
not be paid and shall be used exclusively for the clearing of pre-financing at
closure.’
(2) In Article 138, the following subparagraph is added:
‘By way of derogation from the deadline set out in the first subparagraph, Member
States may submit the documents referred to under points (a), (b) and (c) for the final
accounting year by 15 February 2026.’
Article 15
Amendment to Regulation (EU) No 223/2014 [FEAD]
Regulation (EU) No 223/2014 is amended as follows:
(1) In Article 13, paragraph 5 is replaced by the following:
‘5. The Member State shall submit a final report on implementation of the
operational programme together with the closure documents as set out in Article 52,
by 15 February 2026 at the latest.’
(2) In Article 22, the following paragraph 2a is added:
‘2a. In the case of costs reimbursed pursuant to points (b), (c), (d) and (e) of Article
26(2), the corresponding actions being reimbursed shall be carried out by the
submission of the final application for an interim payment for the final accounting
year in accordance with Article 45(6).’
(3) In Article 45, the following paragraph 6 is added:
‘6. By way of derogation from paragraph 2, the deadline for the submission of the
final application for an interim payment for the final accounting year shall be 31 July
2025. The last application for interim payment submitted by 31 July 2025 shall be
deemed to be the final application for an interim payment for the final accounting
year.
Amounts reimbursed by the Commission as interim payments in 2025 shall not
exceed 1 % of the total financial appropriations to the programme concerned.
Amounts that would be due to be paid by the Commission in 2025 exceeding this
percentage shall not be paid and shall be used exclusively for the clearing of pre-
financing at closure.’
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(4) In Article 48, the following subparagraph is added:
‘By way of derogation from the deadline set out in the first subparagraph, Member
States may submit the documents referred to under points (a), (b) and (c) for the final
accounting year by 15 February 2026.’
Article 16
Amendments to Regulation (EU) 2021/523 [InvestEU]
Regulation (EU) 2021/523 is amended as follows:
(1) Article 3 is amended as follows:
(a) the following point is added in paragraph 1:
‘(h) supporting investments contributing to the STEP objectives referred to in
Article 2 of Regulation .../...68 [STEP Regulation]’
(b) the following point is added in paragraph 2:
‘(e) supporting financing and investment operations related to the areas
referred to in Article 8(1), point (e).’
(2) Article 4 is amended as follows:
(a) In paragraph 1, the first subparagraph is replaced by the following:
‘The EU guarantee for the purposes of the EU compartment referred to in
Article 9(1), point (a), shall be EUR 33 652 310 073 in current prices. It shall
be provisioned at the rate of 40 %. The amount referred to in Article 35(3), first
subparagraph, point (a), shall be also taken into account for contributing to the
provisioning resulting from that provisioning rate.‘;
(b) paragraph 2, second subparagraph is replaced by the following:
‘An amount of EUR 18 827 310 073 in current prices of the amount referred to
in the first subparagraph of paragraph 1 of this Article shall be allocated for the
objectives referred to in Article 3(2).’;
(c) the fourth subparagraph of paragraph 2 is replaced by the following:
‘The indicative distribution of the EU guarantee for the purposes of the EU
compartment is set out in Annex I to this Regulation. Where appropriate, the
Commission may depart from the amounts referred to in Annex I by up to 15
% for each objective referred to in Article 3(2), points (a) to (e). The
Commission shall inform the European Parliament and the Council of any such
departure.’
(3) In Article 7(3), a second subparagraph is added:
‘By way of derogation from the first subparagraph, when support from the financial
instruments is combined in a financial product in a subordinated position to the EU
guarantee under this Regulation and/or EU guarantee established by Regulation (EU)
2015/1017, the losses, revenues and repayments from financial products as referred
to in paragraph 1, as well as potential recoveries, may also be attributed on a non pro
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rata basis between the financial instruments and the EU guarantee under this
Regulation and/or EU guarantee established by Regulation (EU) 2015/1017.’
(4) Article 8 is amended as follows:
(a) In paragraph 1, the introductory wording is replaced by the following:
‘1. The InvestEU Fund shall operate through the following five policy
windows that shall address market failures or suboptimal investment situations
with their specific scope:’;
(b) In paragraph 1, the following point (e) is added:
‘(e) a STEP policy window, which comprises investments contributing to
the STEP objectives referred to in Article 2 of Regulation .../... [STEP
Regulation]’.
(5) In Article 10, the second subparagraph of paragraph 4 is replaced by the following:
‘Where no guarantee agreement has been concluded within 12 months from the
conclusion of the contribution agreement, the contribution agreement shall be
terminated or prolonged by mutual agreement. Where the amount of a contribution
agreement has not been fully committed under one or more guarantee agreements
within twelve months from the conclusion of the contribution agreement, that amount
shall be amended accordingly. The unused amount of provisioning attributable to
amounts allocated by Member States pursuant to the provisions on the use of the
ERDF, the ESF+, the Cohesion Fund and the EMFAF delivered through the
InvestEU Programme laid down in Regulation (EU) 2021/1060 or to the provisions
on the use of the EAFRD delivered through the InvestEU Programme laid down in
the CAP Strategic Plans Regulation shall be re-used in accordance with those
respective Regulations. The unused amount of provisioning attributable to amounts
allocated by a Member State under Article 4(1), third subparagraph, of this
Regulation shall be paid back to the Member State.’
(6) Article 13(4) is replaced by the following:
‘4. At least 75 % of the EU guarantee under the EU compartment as referred to in
Article 4(1), first subparagraph, amounting to at least EUR 25 239 232 554, shall be
granted to the EIB Group. The EIB Group shall provide an aggregate financial
contribution amounting to at least EUR 6 309 808 138. That contribution shall be
provided in a manner and form that facilitates the implementation of the InvestEU
Fund and the achievement of the objectives set out in Article 15(2).’;
(7) In Article 23, the following paragraph 3 is added:
‘3. In the context of the procedures referred to in paragraphs 1 and 2 of this Article,
the Commission shall take into account any Sovereignty Seal awarded under Article
4 of Regulation .../... [STEP Regulation] to a project’.
(8) Article 24(2) is amended as follows:
(a) the first subparagraph is replaced by the following:
‘The Investment Committee shall meet in five different configurations,
corresponding to the five policy windows referred to in Article 8(1).’
(b) The fifth subparagraph is replaced by the following:
‘Four members of the Investment Committee shall be permanent members of
each of the five configurations of the Investment Committee. At least one of
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the permanent members shall have expertise in sustainable investment. In
addition, each of the five configurations shall have two experts with experience
in investment in sectors covered by the corresponding policy window. The
Steering Board shall assign the Investment Committee members to the
appropriate configuration or configurations. A non-permanent member may
be assigned to maximum two configurations, subject to fulfilling the
requirements for both of them. The Investment Committee shall elect a
chairperson from among its permanent members.’
(9) In Article 25, point (j) is added to paragraph 2 as follows:
‘(j) provide advisory support to equity fund managers active in the areas referred
to in point (e) of Article 8(1).’
(10) In Article 26, the following paragraph 5 is added:
‘5. In addition to paragraph 4, implementing partners shall also examine projects
having been awarded the Sovereignty Seal under Article 4 of Regulation .../... [STEP
Regulation] whenever those projects fall within their geographic and activity scope’.
(11) In Article 35, paragraph 5 is added as follows:
‘5. By way of derogation from Article 16, second subparagraph, of this Regulation,
financing and investment operations approved by the implementing partner as of 1
January 2023 until the signature of a guarantee agreement or of an amendment to an
existing one encompassing the STEP Window may be covered by the EU guarantee,
provided that those operations are indicated in the guarantee agreement, pass the
policy check referred to in Article 23(1) or receive a favourable opinion within the
framework of the procedure provided for in Article 19 of the EIB Statute and are in
both cases approved by the Investment Committee in accordance with Article 24.’
(12) In Annex I, point (e) is added as follows:
‘(e) up to EUR 7 500 000 000 for objectives referred to in Article 3(2), point (e).’
(13) In Annex II, point (16) is inserted as follows:
‘(16) scaling up, deployment and large-scale manufacturing of the critical
technologies referred to in Article 2(1), point (a) of Regulation .../... [STEP
Regulation], as well as the respective value chain referred to in Article 2(4) of that
Regulation.’
(14) In Annex III, point (9) is inserted as follows:
‘7a. STEP
7a.1 Investment mobilised by technology area: i) deep and digital technologies, ii)
clean technologies and iii) biotechnologies.’
7a.2 Jobs created or supported.
7a.2 Number of enterprises supported by technology area: i) deep and digital
technologies, ii) clean technologies and iii) biotechnologies.
Amendments to Regulation (EU) 2021/695 [Horizon Europe]
Regulation (EU) 2021/695 is amended as follows:
Article 17
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(1) Article 12 is amended as follows:
(a) paragraph 1 is replaced by the following:
‘1. The financial envelope for the implementation of the Programme for the
period from 1 January 2021 to 31 December 2027 shall be EUR 86 623 000
000 in current prices for the specific programme referred to in point (a) of
Article 1(2) and for the EIT and EUR 9 453 000 000 in current prices for the
specific programme referred to in point (c) of Article 1(2). ’
(b) in paragraph 2, points (b) and (c) are replaced by the following:
‘(b) EUR 46 628 000 000 for Pillar II 'Global Challenges and European
Industrial Competitiveness' for the period 2021 to 2027, of which:
(i) EUR 6 775 000 000 for cluster 'Health';
(ii) EUR 1 350 000 000for cluster 'Culture, Creativity and Inclusive
Society';
(iii) EUR 1 276 000 000 for cluster 'Civil Security for Society';
(iv) EUR 13 229 000 000 for cluster 'Digital, Industry and Space';
(v) EUR 13 229 000 000 for cluster 'Climate, Energy and Mobility';
(vi) EUR 8 799 000 000 for cluster 'Food, Bioeconomy, Natural
Resources, Agriculture and Environment';
(vii) EUR 1 970 000 000 for the non-nuclear direct actions of the JRC;
(c) EUR 13 237 000 000 for Pillar III 'Innovative Europe' for the period 2021
to 2027, of which:
(i) EUR 10 052 000 000 for the EIC;
(ii) EUR 459 000 000 for European innovation ecosystems;
(iii) EUR 2 726 000 000 for the EIT;’
(2) In Article 46, the following paragraph 4a is inserted:
‘4a. By derogation from Article 209(3) of the Financial Regulation, repayments
including reimbursed advances, revenues and unused amounts net of fees and costs
of EIC blended finance of the EIC pilot under Horizon 2020 shall be considered to be
internal assigned revenues in accordance with Article 21(3), point (f) and Article
21(4) and (5) of the Financial Regulation. The time restriction of two years set out in
the second subparagraph of Article 209(3) of the Financial Regulation shall apply as
from the date of entry into force of Regulation .../...69 [STEP Regulation]’.
(3) In Article 48, the following point (d) is added in the first subparagraph:
‘(d) equity-only support required for scale-up to non-bankable SMEs, including start-
ups, and non-bankable small mid-caps, including entities which have already
received support in line with points (a) to (c), carrying out breakthrough and
disruptive non-bankable innovation in the critical technologies referred to in Article
2(1)(a) of Regulation .../... [STEP Regulation], financed under Article 3(b) of that
Regulation.’
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Article 18
Amendments to Regulation (EU) 2021/697 [EDF]
Regulation (EU) 2021/697 is amended as follows:
(1) Article 4 is amended as follows
(a) Paragraph 1 is replaced by the following:
‘1. In accordance with Article 12(1) of Regulation (EU) 2021/695, the
financial envelope for the implementation of the Fund for the period from
1 January 2021 to 31 December 2027 shall be EUR 9 453 000 000 in current
prices.’
(b) in paragraph 2, points (a) and (b) are replaced by the following:
‘(a) EUR 3 151 000 000 for research actions;
(b) EUR 6 302 000 000 for development actions.’
(c) Paragraph 5 is added:
‘An amount of EUR 1 500 000 000 in current prices of the amount referred to
in paragraph 2 shall be allocated to calls for proposals or awards of funding
supporting investments contributing to the STEP objectives referred to in
Article 2(1), point (a)(i) of Regulation .../...70 [STEP Regulation].’
Article 19
Amendments to Regulation (EU) 2021/241 [RRF]
Regulation (EU) 2021/241 is amended as follows:
(1) In Article 7, the following paragraph 3 is added:
‘3. Without prejudice to paragraph 2, Member States may also propose to include in
their recovery and resilience plan, as estimated costs, the amount of the cash
contribution for the purpose of the Member State compartment pursuant to the
relevant provisions of the InvestEU Regulation exclusively for measures supporting
investment operations contributing to the STEP objectives referred to in Article 2 of
Regulation .../...71 [STEP Regulation]. Those costs shall not exceed 6 % of the
recovery and resilience plan’s total financial allocation, and the relevant measures, as
set out in the recovery and resilience plan, shall respect the requirements of this
Regulation.’
(2) In Article 29 the following paragraph 6 is inserted:
‘6. Prior to launching any calls for proposals or tendering procedures related to the
STEP objectives, as defined in Article 2 of Regulation .../... [STEP Regulation],
Member States shall make available the following information on the Sovereignty
portal referred to in Article 6 of that Regulation:
(a) geographical area covered by the call for proposal;
(b) investment concerned;
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(c) type of eligible applicants;
(d) total amount of support for the call;
(e) start and end date of the call;
(f) link to the website where the call will be published.’
CHAPTER 3
FINAL PROVISIONS
Article 20
Entry into force and application
This Regulation shall enter into force on the day following that of its publication in the
Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,
For the European Parliament For the Council
The President The President
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LEGISLATIVE FINANCIAL STATEMENT
Contents
1. FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3
1.1. Title of the proposal/initiative ...................................................................................... 3
1.2. Policy area(s) concerned .............................................................................................. 3
1.3. The proposal/initiative relates to: ................................................................................. 3
1.4. Objective(s) .................................................................................................................. 3
1.4.1. General objective(s) ..................................................................................................... 3
1.4.2. Specific objective(s) ..................................................................................................... 3
1.4.3. Expected result(s) and impact ...................................................................................... 4
1.4.4. Indicators of performance ............................................................................................ 4
1.5. Grounds for the proposal/initiative .............................................................................. 4
1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for
roll-out of the implementation of the initiative ............................................................ 4
1.5.2. Added value of Union involvement (it may result from different factors, e.g.
coordination gains, legal certainty, greater effectiveness or complementarities). For
the purposes of this point 'added value of Union involvement' is the value resulting
from Union intervention which is additional to the value that would have been
otherwise created by Member States alone. ................................................................. 5
1.5.3. Lessons learned from similar experiences in the past .................................................. 5
1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies
with other appropriate instruments............................................................................... 5
1.5.5. Assessment of the different available financing options, including scope for
redeployment ................................................................................................................ 6
1.6. Duration and financial impact of the proposal/initiative ............................................. 7
1.7. Management mode(s) planned ..................................................................................... 7
2. MANAGEMENT MEASURES................................................................................... 7
2.1. Monitoring and reporting rules .................................................................................... 7
2.2. Management and control system(s) ............................................................................. 8
2.2.1. Justification of the management mode(s), the funding implementation mechanism(s),
the payment modalities and the control strategy proposed .......................................... 8
2.2.2. Information concerning the risks identified and the internal control system(s) set up
to mitigate them............................................................................................................ 8
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control
costs ÷ value of the related funds managed"), and assessment of the expected levels
of risk of error (at payment & at closure) .................................................................... 8
2.3. Measures to prevent fraud and irregularities ................................................................ 8
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3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE .............. 9
3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s)
affected ......................................................................................................................... 9
3.2. Estimated financial impact of the proposal on appropriations ................................... 11
3.2.1. Summary of estimated impact on operational appropriations.................................... 11
3.2.2. Estimated output funded with operational appropriations ......................................... 16
3.2.3. Summary of estimated impact on administrative appropriations ............................... 18
3.2.4. Compatibility with the current multiannual financial framework.............................. 20
3.2.5. Third-party contributions ........................................................................................... 20
3.3. Estimated impact on revenue ..................................................................................... 21
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1. FRAMEWORK OF THE PROPOSAL
1.1. Title of the proposal/initiative
Proposal for a Regulation of the European Parliament and of the Council establishing
the Strategic Technologies for Europe Platform (‘STEP’) and amending Directive
2003/87/EC, Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU)
No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695,
(EU) 2021/697 and (EU) 2021/241
1.2. Policy area(s) concerned
Industrial policy
European Green Deal
Europe fit for the digital age
Single Market
1.3. The proposal/initiative relates to:
 a new action
 a new action following a pilot project/preparatory action72
 the extension of an existing action
 a merger or redirection of one or more actions towards another/a new action
1.4. Objective(s)
1.4.1. General objective(s)
The EU has put in place over the last years a comprehensive set of instruments to
support the decarbonisation and digitalisation of Europe. While the EU has been
providing steady financing both to the green and digital transitions, the funds are
generally spread across various spending programmes and following different rules.
Ensuring coherence among these existing funds towards a common objective has the
potential to enhance their effectiveness and accelerate the support to the industrial
sectors critical for the twin transition.
The STEP aims to strengthen European edge on critical and emerging technologies
relevant to the green and digital transitions, from computing-related technologies,
including microelectronics, quantum computing, and artificial intelligence; to
biotechnology and biomanufacturing, and net-zero technologies.
The STEP aims to achieve its objectives through the following means:
1. Providing flexibility in existing instruments
2. Reinforcing the firepower of existing instruments
3. Creating synergies among instruments towards the common goal
72 As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
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1.4.2. Specific objective(s)
(a) supporting the development or manufacturing throughout the Union, or
safeguarding and strengthening the respective value chains, of critical technologies in
the following fields, provided those technologies meet certain conditions:
(i) deep and digital technologies
(ii) clean technologies
(iii) biotechnologies
(b) addressing shortages of labour and skills critical to all kinds of quality jpbs in
support of the objective under point (a).
1.4.3. Expected result(s) and impact
Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.
The expected impact of the Platform includes a substantial strengthening of the
European Union's industrial capabilities and competitiveness in the areas of clean,
biotech and deeptech technologies. This impact is projected to reinforce the EU's
position as a global leader in these critical areas ultimately enhancing the EU's
economic growth, sustainable development and international competitiveness.
1.4.4. Indicators of performance
Specify the indicators for monitoring progress and achievements.
Indicators:
1. Enterprises supported
2. Number of participants in trainings
3. Total investment mobilised
4. Number of jobs created or maintained
1.5. Grounds for the proposal/initiative
1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for
roll-out of the implementation of the initiative
The Regulation should be fully applicable shortly after its adoption, i.e. the day
following its publication in the Official Journal of the European Union. However,
some actions will start as of the date of adoption of the proposal by the Commission:
- The Commission will start integrating the STEP objectives in the ongoing
implementation of programmes, such as under Horizon Europe or the Innovation
Fund.
- The Commission is establishing the One-Stop-Shop as of now to act as the central
coordinator among EU instruments for the purpose of the Platform. The structure
will grow over time to integrate additional resources.
The two actions above should be able to produce results as of end 2023.
Subject to the adoption of this proposal by the co-legislators, the Commission intends
to deploy very quickly the additional resources in the selected programmes so that
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beneficiaries could start receiving financial support or implementing additional EU
guarantee as of 2024.
1.5.2. Added value of Union involvement (it may result from different factors, e.g.
coordination gains, legal certainty, greater effectiveness or complementarities). For
the purposes of this point 'added value of Union involvement' is the value resulting
from Union intervention, which is additional to the value that would have been
otherwise created by Member States alone.
The EU as whole is at the forefront for implementing the actions required to pursue
the green and digital transitions. By acting together, Member States are better able to
pool resources for achieving these objectives and reinforce the effectiveness of the
actions.
Sustaining the green and digital transitions with a strong industrial base requires a
coordinated action among Member States, also in view of the global competition to
attract capital and investments.
1.5.3. Lessons learned from similar experiences in the past
The EU has adopted in previous years regulatory changes to accelerate the
deployment of EU funds, for instance CARE and FAST CARE are examples where
the cohesion funds have been subject to targeted changes to face emerging crisis.
The EU has also adopted recently the REPowerEU Regulation to reinforce the
firepower of an existing instrument, the Recovery and Resilience Facility, and
flexibilise at the same time the possibility to use other funds for the REPowerEU
purposes.
These experiences have been taken into account in the design of this proposal.
1.5.4. Compatibility with the Multiannual Financial Framework and possible synergies
with other appropriate instruments
This Regulation creates the necessary conditions for a more effective, efficient and
targeted use of existing EU funds in the name of greater support to STEP projects.
The EU has put in place over the last years a comprehensive set of instruments to
support the decarbonisation and digitalisation of Europe.
The choice of streamlining and making a better use of existing instruments over
creating a brand new instrument has two main advantages. First, timing. With the
creation of a new instrument potentiallly taking a long time, bringing existing
instruments together can be done much more quickly. This would be an indisputable
advantage for the beneficiaries of EU funding as they would have the chance to reap
the benefits of EU funding more swiftly. Second, blending different sources of
financing – under direct, indirect and shared management – could also lead to a more
efficient use of resources.
While the STEP proposal is fully embedded in the exising MFF and the current
instruments, it also requires additional resources to achieve the objectives. As such,
as part of the mid-term review of the MFF, the Commission is proposing targeted
reinforcements for the STEP.
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1.5.5. Assessment of the different available financing options, including scope for
redeployment
N/A
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1.6. Duration and financial impact of the proposal/initiative
 limited duration
– in effect from [DD/MM]YYYY to 31/12/2030
–  Financial impact from 2023 to 2027 for commitment appropriations and from
2023 to 2030 for payment appropriations.
 unlimited duration
– Implementation with a start-up period from YYYY to YYYY,
– followed by full-scale operation.
1.7. Method(s) of budget implementation planned73
 Direct management by the Commission
–  by its departments, including by its staff in the Union delegations;
–  by the executive agencies
 Shared management with the Member States
 Indirect management by entrusting budget implementation tasks to:
–  third countries or the bodies they have designated;
–  international organisations and their agencies (to be specified);
– the EIB and the European Investment Fund;
–  bodies referred to in Articles 70 and 71 of the Financial Regulation;
–  public law bodies;
–  bodies governed by private law with a public service mission to the extent that
they are provided with adequate financial guarantees;
–  bodies governed by the private law of a Member State that are entrusted with
the implementation of a public-private partnership and that are provided with
adequate financial guarantees;
–  bodies or persons entrusted with the implementation of specific actions in the
CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.
– If more than one management mode is indicated, please provide details in the ‘Comments’ section.
2. MANAGEMENT MEASURES
2.1. Monitoring and reporting rules
Specify frequency and conditions.
In accordance with Article 7 of the STEP Regulation, the Commission shall provide
an annual report to the European Parliament and the Council on the implementation
of the STEP. The annual report shall provide consolidated information on the
progress made in implementing the STEP objectives under each of the programmes
referred to in Article 2, including:
73 Details of budget implementation methods and references to the Financial Regulation may be found on
the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-
implementation/Pages/implementation-methods.aspx
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(a) overall STEP expenditure financed under the respective programmes
(b) the performance of the STEP investments based on the common indicators
In addition, in accordance with Article 8 of the STEP Regulation, the Commission
will draw up an evaluation report on the implementation of the Fund no later than
31/12/2025 and submit it to the European Parlimament and the Council. The
evaluation report shall, in particular, assess to which extent the objectives have been
achieved, the efficiency of the use of the resources and the European added value. It
shall also consider the continued relevance of all objectives and actions.
2.2. Management and control system(s)
2.2.1. Justification of the management mode(s), the funding implementation mechanism(s),
the payment modalities and the control strategy proposed
The STEP shall be implemented in accordance with the management mode, payment
modalities and control strategy applicable to the programmes referred to in Article 3
of the Regulation.
2.2.2. Information concerning the risks identified and the internal control system(s) set up
to mitigate them
The STEP will rely on existing EU instruments, including their control set-ups, and
as such should not result in additional risks.
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control
costs ÷ value of the related funds managed"), and assessment of the expected levels
of risk of error (at payment & at closure)
The budget will be implemented in accordance with the management mode, payment
modalities and control strategy applicable to the programmes referred to in Article 3
of the regulation. This approach guarantees an efficient implementation of funds,
using proven control systems that are already established.
2.3. Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
The Platform shall be implemented through the programmes referred to in Article 3
of the Regulation. The prevention and protection measures will be those already in
place for those programmes.
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3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1. Heading(s) of the multiannual financial framework and expenditure budget
line(s) affected
 Existing budget lines
In order of multiannual financial framework headings and budget lines.
Heading of
multiannual
financial
framework
Number
Budget line
Type of
expenditure
Diff./Non-
diff.74
Contribution
from
EEA-
EFTA
countries
75
from
candidate
countries
and
potential
candidates
76
from
other
third
countries
other assigned
revenue
1 01.020210 Cluster “Health” (Horizon Europe) Diff Yes Yes Yes Yes
1
1
1
1
1
1
01.020220 Cluster ‘Culture, Creativity and
Inclusive Society’ (Horizon Europe)
01.020230 Cluster ‘Civil Security for Society’
(Horizon Europe)
01.020240 Cluster ‘Digital, Industry and
Space’ (Horizon Europe)
01.020250 Cluster ‘Climate, Energy and
Mobility’ (Horizon Europe)
01.020260 Cluster ‘Food, Bioeconomy,
Natural Resources, Agriculture and
Environment’ (Horizon Europe)
01.0200301 European Innovation Council
(Horizon Europe)
Diff Yes Yes Yes Yes
Diff Yes Yes Yes Yes
Diff Yes Yes Yes Yes
Diff Yes Yes Yes Yes
Diff Yes Yes Yes Yes
Diff Yes Yes Yes Yes
1 02.0202 (InvestEU - provisioning) Diff Yes No No Yes
05.02.01 European Regional Development
Fund (ERDF) Operational Expenditure
2a
05.03.01 Cohesion Fund (CF) Operational
Expenditure
Diff. No No No
07.02.01 European Social Fund Plus (ESF+)
shared management strand – Operational
Expenditure
External
assigned
revenue from
NGEU for the
JTF
3 09.03.01 Just Transition Fund (JTF) - Diff No No No Yes
74 Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
75 EFTA: European Free Trade Association.
76 Candidate countries and, where applicable, potential candidates from the Western Balkans.
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Operational Expenditure
 New budget lines requested
In order of multiannual financial framework headings and budget lines.
Heading of
multiannual
financial
framework
Number
Diff./Non-
diff.
from
EFTA
countries
Budget line
Type of
expenditure
Contribution
from
candidate
countries
and
potential
candidates
from
other
third
countries
other assigned
revenue
09.05.01 Innovation Fund (IF) - operational
expenditure
3
09.01.04.01 Support expenditure for the
Innovation Fund
Diff. and
Non-diff.
No No No Yes
09.01.04.74 European Climate, Infrastructure
and Environment Executive Agency –
Contribution from the Innovation Fund
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3.2. Estimated financial impact of the proposal on appropriations
3.2.1. Summary of estimated impact on operational appropriations
–  The proposal/initiative does not require the use of operational appropriations
– The proposal/initiative requires the use of operational appropriations, as explained below:
Heading of multiannual financial
framework
Number 1
EUR million (to three decimal places)
Horizon Europe
2023 2024 2025 2026
2027 TOTAL
Operational appropriations redeployed from Horizon Europe Pillar II to the European Innovation Council
01.020210 Cluster “Health”
Commitments
(1a)
-14,700
-44,200
-59,100 -118,000
01.020220 Cluster ‘Culture, Creativity and
Inclusive Society’
Commitments
(1a)
01.020230 Cluster ‘Civil Security for Society’ Commitments
01.020240 Cluster ‘Digital, Industry and Space’ Commitments
(1a)
(1a)
01.020250 Cluster ‘Climate, Energy and
Mobility’
Commitments
(1a)
01.020260 Cluster ‘Food, Bioeconomy, Natural
Resources, Agriculture and Environment’
Commitments
(1a)
-4,400
-13,300
-18,300
-36,000
-3,300
-10,000
-13,700
-27,000
-29,200
-87,500
-116,300 -233,000
-29,200
-87,500
-116,300 -233,000
-19,200
-57,500
-76,300 -153,000
01.020301 European Innovation Council Commitments
(1a)
100,000 300,000 400,000 800,000
Operational appropriations stemming from decommitments made available again (Article 15(3) of the Financial Regulation) (current prices)
01.020301 European Innovation Council Commitments
(1a)
500,000 400,000 200,000 100,000 1 200,000
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Operational appropriations stemming from the Mid-Term Revision of the Multiannual Financial Framework 2021-2027
01.020301 European Innovation Council Commitments
(1a)
125,000 125,000 125,000 125,000 500,000
Estimated operational appropriations stemming from repayments from the European Innovation Council Pilot under Horizon 2020
01.00301 European Innovation Council Commitments
(1a)
p.m. p.m. p.m.
Appropriations of an administrative nature financed from the envelope
of specific programmes77
p.m. p.m. p.m.
p.m.
p.m.
130,000
Total appropriations for Horizon Europe
01.020301 European Innovation Council
Commitments
Payments
(1a)
(2a)
625,000 625,000 625,000 625,000 2 630,000*
625,000 625,000 625,000 625,000 2 630,000*
* of which an estimated amount of EUR 130 million of assigned revenue stemming from the European Innovation Council Pilot under Horizon 2020, for which the annual profile cannot be known in advance.
DG: ECFIN
2023 2024 2025 2026 2027 TOTAL
 Operational appropriations
02.0202 - Provisioning of InvestEU
Guarantee
Commitments (1a)
Payments
(2a)
750,000 750,000 750,000 750,000 3000,000
750,000 750,000 750,000 750,000 3000,000
Appropriations of an administrative nature financed from the envelope
of specific programmes78
p.m. p.m. p.m. p.m.
TOTAL appropriations
for DG ECFIN
Commitments =1a
750,000 750,000 750,000 750,000 3000,000
Payments =2a
750,000 750,000 750,000 750,000 3000,000
77 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the
78 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the
same percentages compared to administrative lines as the one occurred in the 2021-2024 period.
same percentages compared to administrative lines as the one occurred in the 2021-2024 period.
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Heading of multiannual financial
framework
Number 3
DG: Regional and Urban Policy
2023 2024 2025 2026 2027 2028 2029 TOTAL
 Operational appropriations
09.0301 - Just Transition Fund (JTF) -
Operational Expenditure*
Commitments
Payments
(1a)
(2a)
0,000 0,000 0,000 0,000
5 935,000
-5 935,000
0,000
0,000
Appropriations of an administrative nature financed from the
envelope of specific programmes79
p.m. p.m. p.m. p.m.
TOTAL appropriations
for DG Regional and Urban Policy
Commitments =1a+1b
+3
Payments
=2a+2b
+3
0,000 0,000 0,000 0,000
0,000
5 935,000 0,000 -5 935,000 0,000 0,000 0,000 0,000
* The additional pre-financing payments for the JTF in 2024 will be financed only from external assigned revenues and will result in a frontloading of NGEU payment
appropriations from year 2026 to year 2024. Additional pre-financing amounts to be paid under the ERDF, CF and ESF+ will depend on Member State’s programming
decisions and will be entirely financed by MFF resources.
Heading of multiannual financial
framework
Number 3
DG: CLIMA
2023 2024 2025 2026 2027 TOTAL
79 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the
same percentages compared to administrative lines as the one occurred in the 2021-2024 period.
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 Operational appropriations
09.0501 - Innovation Fund (IF) -
operational expenditure
Commitments (1a)
1 250,000 1 250,000 1 250,000 1 250,000 5 000,000
Payments
(2a)
500,000 1 125,000 1 150,000 2 225,000 5 000,000
Appropriations of an administrative nature financed from
the envelope of specific programmes80
p.m. p.m. p.m. p.m.
TOTAL appropriations
for DG CLIMA
Commitments =1a+1b
+3
Payments
=2a+2b
+3
1 250,000 1 250,000 1 250,000 1 250,000 5 000,000
500,000 1 125,000 1 150,000 2 225,000 5 000,000
Heading of multiannual
financial
framework
Number 5
European Defence Fund
2023
2024
2025
2026
2027 TOTAL
 Operational appropriations
13.0301 – Defence
Commitments (1a)
Payments
(2a)
Appropriations of an administrative nature
financed from the envelope of specific
programmes81
TOTAL Commitments =1a+1b
+3
375,000
375,000
376,000
376,000
375,000
375,000
374,000 1 500,000
374,000 1 500,000
p.m.
p.m.
p.m.
p.m.
375,000
375,000
375,000
375,000 1 500,000
80 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the
81 Technical and/or administrative assistance and expenditure are not detailed but included in the overall amounts indicated under operational lines. They should roughly correspond to the
same percentages compared to administrative lines as the one occurred in the 2021-2024 period.
same percentages compared to administrative lines as the one occurred in the 2021-2024 period.
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appropriations
for European
Defence Fund
Payments
=2a+2b
+3
375,000 376,000 375,000 374,000 1 500,000
 TOTAL operational appropriations
Cmimns 4
Pyet ()
 TOTAL appropriations of an administrative nature
financed from the envelope for specific programmes (6)
TOTAL appropriations
under HEADING <….>
of the multiannual financial framework
Cmimns 4
Pyet =+6
If more than one operational heading is affected by the proposal / initiative, repeat the section above:
 TOTAL operational appropriations (all
operational headings)
Cmimns 4
Pyet ()
TOTAL appropriations of an administrative nature financed
from the envelope for specific programmes (all operational
headings)
(6)
TOTAL appropriations
under HEADINGS 1 to 6
of the multiannual financial framework
(Reference amount)
Cmimns 4
Pyet =+6
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Heading of multiannual financial
framework
7 ‘Administrative expenditure’
This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative
Financial Statement (Annex 5 to the Commission decision on the internal rules for the implementation of the Commission section of the general
budget of the European Union), which is uploaded to DECIDE for interservice consultation purposes.
2023 2024 2025 2026 2027 2028 2029 TOTAL
EUR million (to three decimal places)
 Human resources
DG: <…….>
3,026 3,026 3,026 3,026 1,037 1,037
 Other administrative expenditure
0.257 0.385 0.385 0.257 0.182 0.182
14,178
1,648
TOTAL DG <…….> Appropriations
3,283 3,411 3,411 3,283 1,219 1,219 15,826
TOTAL appropriations
under HEADING 7
of the multiannual financial framework
(Total commitments =
Total payments)
3,283 3,411 3,411 3,283 1,219 1,219
15,826
2023 2024 2025 2026 2027 2028 2029 TOTAL
EUR million (to three decimal places)
TOTAL appropriations
under HEADINGS 1 to 7
of the multiannual financial framework
Commitments
Payments
3.2.2. Estimated output funded with operational appropriations
Commitment appropriations in EUR million (to three decimal places)
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Indicate
objectives and
outputs

Type82
Avera
ge
cost
o
N
Cost N
o
Cost N
o
Cost N
o
Cost N
o
Cost N
o
Cost N
o
Cost
Total
No
Total
cost
OUTPUTS
2023 2024 2025
2026
2027 2028 2029 TOTAL
SPECIFIC OBJECTIVE No 183…
- Output
- Output
- Output
Subtotal for specific objective No 1
SPECIFIC OBJECTIVE No 2 ...
- Output
Subtotal for specific objective No 2
TOTALS
82 Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).
83 As described in point 1.4.2. ‘Specific objective(s)…’
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3.2.3. Summary of estimated impact on administrative appropriations
–  The proposal/initiative does not require the use of appropriations of an
administrative nature
–  The proposal/initiative requires the use of appropriations of an administrative
nature, as explained below:
EUR million (to three decimal places)
2023 2024 2025 2026 2027 2028 2029 TOTAL
HEADING 7
of the multiannual
financial framework
Human resources
3.026 3.026 3.026 3.026 1.037 1.037
14,178
0.257 0.385 0.385 0.257 0.182 0.182 1.648
3.283 3.411 3.411 3.283 1.219 1.219 15,826
Other administrative
expenditure
Subtotal HEADING 7
of the multiannual
financial framework
Outside HEADING 784
of the multiannual
financial framework
Human resources
Other expenditure
of an administrative
nature
Subtotal
outside HEADING 7
of the multiannual
financial framework
TOTAL
3,283 3,411 3,411 3,283 1,219 1,219 15,826
The appropriations required for human resources and other expenditure of an administrative nature will be met by
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the
DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.
84 Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes
and/or actions (former ‘BA’ lines), indirect research, direct research.
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3.2.3.1. Estimated requirements of human resources
–  The proposal/initiative does not require the use of human resources.
–  The proposal/initiative requires the use of human resources, as explained
below:
 Establishment plan posts (officials and temporary staff)
20 01 02 01 (Headquarters and Commission’s Representation
Offices)
20 01 02 03 (Delegations)
01 01 01 01 (Indirect research)
01 01 01 11 (Direct research)
Other budget lines (specify)
 External staff (in Full Time Equivalent unit: FTE)85
Estimate to be expressed in full time equivalent units
2023 2024 2025 2026 2027 2028 2029
5 5 5 5 5
20 02 01 (AC, END, INT from the ‘global envelope’)
5 5 2
20 02 03 (AC, AL, END, INT and JPD in the delegations)
XX 01 xx yy zz 86
- at Headquarters
- in Delegations
01 01 01 02 (AC, END, INT - Indirect research)
01 01 01 12 (AC, END, INT - Direct research)
Other budget lines (specify)
TOTAL
0 0 0 0 7
XX is the policy area or budget title concerned.
The human resources required will be met by staff from the DG who are already assigned to management of the
action and/or have been redeployed within the DG, together if necessary with any additional allocation which
may be granted to the managing DG under the annual allocation procedure and in the light of budgetary
constraints.
Description of tasks to be carried out:
Officials and temporary staff 15 FTEs (12 AD and 3 AST) will be required to set up and start the first activities of
the one-stop-shop in 2024. The same number of FTEs will be needed until the end of
the current MFF period, before decreasing to 5 FTEs in 2028 and 2029
External staff
The One-Stop-Shop will consist of an additional unit to be established within DG
BUDG in the Commission. However, these needs will be covered through internal
redeployment within the Commission.
2 Contract Agents and 3 Seconded National Experts until 2027 and 2 Contract Agents
afterwards. The 2 contract agents will be covered from internal redeployment within
the Commission.
85 AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff;
86 Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
JPD= Junior Professionals in Delegations.
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3.2.4. Compatibility with the current multiannual financial framework
The proposal/initiative:
–  can be fully financed through redeployment within the relevant heading of the
Multiannual Financial Framework (MFF).
Explain what reprogramming is required, specifying the budget lines concerned and the corresponding
amounts. Please provide an excel table in the case of major reprogramming.
–  requires use of the unallocated margin under the relevant heading of the MFF
and/or use of the special instruments as defined in the MFF Regulation.
Explain what is required, specifying the headings and budget lines concerned, the corresponding
amounts, and the instruments proposed to be used.
–  requires a revision of the MFF.
B1’s input needed
3.2.5. Third-party contributions
The proposal/initiative:
–  does not provide for co-financing by third parties
–  provides for the co-financing by third parties estimated below:
Appropriations in EUR million (to three decimal places)
Year
N87
Year
N+1
Year
N+2
Year
N+3
Enter as many years as necessary
to show the duration of the
impact (see point 1.6)
Total
Specify the co-financing
body
TOTAL appropriations
co-financed
87 Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the
expected first year of implementation (for instance: 2021). The same for the following years.
EN
20
EN
3.3. Estimated impact on revenue
–  The proposal/initiative has no financial impact on revenue.
–  The proposal/initiative has the following financial impact:
–  on own resources
–  on other revenue
– please indicate, if the revenue is assigned to expenditure lines 
Appropriations
available for
the current
financial year
Budget revenue line:
Article ………….
EUR million (to three decimal places)
Impact of the proposal/initiative88
Year
N
Year
N+1
Year
N+2
Year
N+3
Enter as many years as necessary to show
the duration of the impact (see point 1.6)
For assigned revenue, specify the budget expenditure line(s) affected.
Other remarks (e.g. method/formula used for calculating the impact on revenue or any other
information).
88 As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net
amounts, i.e. gross amounts after deduction of 20 % for collection costs.
EN
21
EN
