Synergies & Complementarities ERDF – Horizon Europe: What will be possible in 2021-2027 Katja Reppel Deputy Head of Unit for Smart and Sustainable Growth DG Regional and Urban Policy

#CohesionPolicy #EUinmyRegion

Topics

• Concept of complementarities & synergies • State of play in current period

• Novelties for 2021-27 programmes

• Next Steps towards the new generation of ERDF

programmes

Complementarity … with some exceptions

See:

• A renewed European Agenda for Research and Innovation - Europe's chance to shape its future (COM(2018) 306)

• Explanatory memoranda of proposals for HE and CPR/ERDF

Horizon Europe ERDF • Focus on European research and

innovation excellence • focus on regional relevance and economic

transformation, based on smart specialisation strategies

• Focus on frontier research, generation and exploitation of new knowledge and disruptive, market-creating innovations

• Broad innovation concept; focus on diffusion and exploitation of existing knowledge & technology to places that need it

• Quality-based competition for funds, incl. beyond EU

• Focus of support on where it is most needed inside the EU

• Predominantly trans-national projects and consortia

• Predominantly "mono-beneficiaries" or actors in the same country/region

• Focus on R&I activities and "R&I community" in view of contributing to other policies

• Focus on R&I capacities and innovation eco-system development, as one part of a comprehensive policy with sustainable& inclusive growth and a broad partnership

Concept for ERDF-Horizon Europe synergies:

Strategic synergies • Smart Specialisation Strategies set out R&I priorities per

MS / region → teaming up with thematically related H2020 funded projects / initiatives

Financial synergies in 2014-2020 ERDF and H2020

• Sequential funding

• Alternative funding („Seal of Excellence“)

• Parallel funding • Cumulative funding

Concept for ERDF-Horizon Europe synergies (2)

Annex 2 Scenarios & hands-on advice for policy-designers & implementers by project format (also interesting for beneficiaries) 1. Horizon2020 - Standard R&I projects - ERA Chairs, Teaming & Twinning - Marie Skłodowska-Curie researchers' mobility - ERA-NETs, Joint Programming Initiatives, Art. 185 initiatives and Art. 187

Joint Technology Initiatives - EIT / Knowledge and Innovation Communities - Research Infrastructures - Pre-Commercial Procurement and Public Procurement of Innovative Solutions - Innovation in SMEs

2. COSME – Enterprise Europe Network

3. ERASMUS+ - mobility, Knowledge & skills alliances

4. Creative Europe –innovation in& with Creative Industries

5. CEF - Digital Services Platforms – e-government interop.

Annex 1 Explanations by programme (differences, opportunities, management principles) • ESIF & Cohesion

Policy • Horizon2020 • COSME • Erasmus+ • CEF digital

services • Creative Europe

Guidance for policy makers

Basic Principles & Concept of Synergies and Cumulation Recommendations for policy-makers and implementing bodies for strategy development, programme design and implementation mechanisms; Overview of Commission support (SWD(2014)205 final)

Translations in DE, FR, IT, ES, PL available: http://ec.europa.eu/regional_policy/en/information/publications/guides/2014/enabling-synergies-between-european-structural-and-investment-funds-horizon-2020-and-other-research-innovation-and-competitiveness-related-union-programmes

ESIF rules enabling synergies in 2014-2020

• Possibility to combine H2020 and ESIF money in the same project via a derogation from the non-cumulative principle of Art. 129 Fin. Regulation that prohibits a beneficiary to receive 2 EU grants for a project (Art. 65(11) CPR*)

• More ESIF can be spent outside operational programme territory (e.g. to pool funding for technology parks, clusters, research infrastructures abroad, …) if for the benefit of the programme area: Article 70(2) CPR (also contract research is possible outside OP territory irrespective of Art 70(2))

• Stronger obligation to work with innovation actors in other regions & Member States beyond "INTERREG": Art 96(3)d CPR

• Alignment of similar cost options possible for easier combining of funds: lump sums, flat rates, standard scales of unit costs under ESIF may use the H2020 rules applicable for similar types of operations and beneficiaries (Art 67(5)b, 68 CPR)

• Obligation to develop smart specialisation strategies, including seeking synergies and complementarity with Horizon2020 and other centrally managed EU programmes and involvement of Horizon 2020 stakeholders in RIS3 development process and obligation to foresee up- & down-stream measures to Horizon 2020 in RIS3: Annex 1 to CPR

*) Regulation (EU) No 1303/2013 Common Provisions for all European Structural and Investment Funds

2018: Further facilitations via the “Omnibus Regulation” that modified the EU Financial Regulation and the ESIF Common Provisions Regulation

ESIF Modifications via the "Omnibus" Regulation * Additional option for cumulating funds from different EU sources

Article 65(11) CPR Regulation (EU) No 1303/2013 Initial rules: ESIF and Horizon2020 can be cumulated in the same project, provided that each expenditure / cost item receives funding from only one EU fund (Article 37 H2020 Rules for Participation mirrors Art. 65(11) CPR)

Omnibus: • Current option remains possible • Additional option offered: expenditure reimbursed from different ESI

Funds and Union instruments on a pro rata basis in accordance with the document setting out the conditions of support (while respecting co-financing obligations under ESIF and H2020 respectively)

*) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 ( OJ L 193, 30.7.2018, p. 1–222) entered into force on 2 August 2018

ESIF Modifications via the "Omnibus" Regulation More use of Simplified Cost Options (SCO)

Article 67(2)(5), CPR Regulation (EU) No 1303/2013 Initial rules: Complex situation with limited possibilities, e.g. lump sums limited to EUR 100 000; Flat rates for indirect and staff costs max. 25% or 15% of eligible direct costs Omnibus: modifications in Articles 67, 68, 68a and 68b CPR • No upper limit for lump sums • Compulsory use of SCO for ERDF and ESF where public support does

not exceed EUR 100 000 for operations not implemented exclusively through public procurement.

ESIF Modifications via the "Omnibus" Regulation Clarifications and simplification for operations outside the OP area

Article 70(2) CPR Regulation (EU) No 1303/2013 Initial rules: Projects outside OP area possible if: + operation is for the benefit of the programme area + max.15% of a priority axis may be outside OP area + agreement of monitoring committee to each individual operation + management, control and audit by funding MA or agreements with authorities in the area in which the operation is implemented

Omnibus: Art. 70 totally redrafted

Omnibus: new Art. 70 Common Provisions Regulation

Special simplifications for research and innovation: 1. Operations within EU but outside the Member State: only 2 criteria apply:

- max.15% of a priority axis at the time of adoption of the OP may be outside OP area - management, control and audit by funding MA or agreements with authorities in the area in which the operation is implemented

2. Operations outside EU: R&I operations allowed, provided that expenditure is necessary for the satisfactory implementation of the operation.

ESIF Modifications via the "Omnibus" Regulation Clarifications and simplification for operations outside the OP area

State of play regarding H2020-ERDF synergies & complementarities (1)

• Smart Specialisation prepared the ground for synergies on the ERDF / regional side:

Better innovation governance, more university-enterprise cooperation and improved R&I support in the countries & regions (Stairway2Excellence pilot, S3 support for lagging regions, Teaming/Twinning, ERA chairs, etc.)

Interregional teaming up around related S3 priorities and preparing for transnational H2020 project consortia (Vanguard Initiative, S3 thematic platforms, interregional S3 partnerships, MoUs with Joint Undertakings, regional innovation scheme of the EIT ….)

More comprehensive innovation approach starts to be embraced (research + digitisation, industrial transition, skills, structural reforms …)

Mapping of capacities facilitates match-making (S3 thematic platforms, Digital Innovation Hubs, KETs competence centres ….)

State of play regarding H2020-ERDF synergies & complementarities (2)

• Regulatory possibilities start getting used: Alignment of ESIF funding opportunities to H2020 formats, eligible cost

calulation, etc. (Seal of Excellence for SME Instrument - ERDF, Marie S. Curie - ESF, CleanSky2 labels, SoE Community of Practice & web-site) within State Aid limits (see SWD(2017)11). But: The Seals mostly do not go to the regions where ERDF money would be available to substitute Horizon funds (only 10% of the Seals go to EU-13 countries)

Adoption of good H2020 practices (international evaluators, alignment to H2020 evaluation criteria & language, etc.), but not in all regions …

More cases of sequential combination of H2020 and ESIF (ERDF research infrastructures used for H2020 projects, preferential project selection for take-up of FP/Horizon results in ERDF), but no systematic data collected …

Some cases of cumulation in the same project (ECSEL JU & Italian competitiveness OP, financial instruments for ESS), but complex process …

Some cases of ERDF funding outside OP area (ESS in kind contribution)

Evolution of main policy areas in the EU budget

Source: European Commission

*Adjusted for 1995 enlargement

Proposals for the 2021-2027 MFF programmes

Main novelties for synergies for 2021-2027 MFF

• Strategic level: • Strategic planning process links Cohesion Policy to European Semester • Complementarity of ERDF with Horizon Europe, Digital Europe, Single

Market Programme, etc. set out in Regulations

• Financial level: • More links and bridges between different programmes • More Simplified Cost Options: Unit costs, fixed rates, lump sums, including

replicating those in directly managed programmes for similar types of projects

• Management level: • Use of same bodies to implement different funds to facilitate

synchronisation and links at governance level (in particular Horizon “co-funds”)

+ State aid simplifications: • Modification of General Block Exemption Regulation • Regulatory fitness check of RDI Framework …

Proposed bridges and links between EU Funds

• Open to receive voluntary transfers from any CPR Funds to: – Any Fund covered by the CPR, any Fund under the shared management or any

instrument under direct or indirect management.

– 10 proposed EU programmes explicitly mention the receipt of transfers (Horizon Europe, Digital Europe, Single Market Programme, InvestEU, Creative Europe, Erasmus+, Space Programme, Rights & Values Programme, Reform Support Programme, Connecting Europe Facility)

• Cumulative funding : – 14 proposed EU programmes: Horizon Europe, Digital Europe, Single Market

Programme, LIFE, Creative Europe, Space Programme, CEF2, Euratom, Erasmus+, Customs Programme, Justice Programme, AMF, ISF and BMVI

• Seal of Excellence or equivalent: – 14 proposed EU programmes: Horizon Europe, Digital Europe, Single Market

Programme, LIFE, Creative Europe, Space Programme, Defence Programme, CEF2, Rights & Values Programme, Justice Programme, Erasmus+, AMF, ISF and BMVI

• Co-funds managing jointly Horizon Europe and ERDF / ESF+ funds for reserach and innovation

Design phase is key to synergies ERDF strategic planning process: • Partnership Agreements and programmes have to take into account relevant 2019 country specific recommendations when selecting policy objectives (Art. 8(a) and 17(3)(a)(iii) Common Provisions Regulation (CPR)*)

• Partnership Agreements have to set out arrangements for using the CPR Funds in an effective and efficient manner and complementarities between the shared managed Funds and other Union instruments (Art. 8 CPR*).

There is 1 PA per MS covering all 7 CPR Funds that precedes the draft national / regional "programmes" and sets out the priorities for them. • Smart Specialisation Strategies are key to synergies with Horizon Europe, Single Market Programme, Digital Europe Programme and other EU smart growth related instruments. S3 "Entrepreneurial Discovery Process" should bring together the industry and research "communities" and other relevant stakeholders.

How to engage with ERDF and S3 governance bodies for mutual understanding & search for shared priorities & complementarities?

*) https://ec.europa.eu/commission/publications/regional-development-and-cohesion_en

Design phase is key to synergies (2) Country Specific recommendations 2019 & Annex D: Investment in research, development and innovation is needed in most Member States and regions to enhance their productivity growth and competitiveness. Annex D of each country report presents the preliminary Commission services views on priority investment areas and framework conditions for effective delivery for the 2021-2027 Cohesion Policy: • Strengthen links between businesses, academia, research and public sector actors trough cooperation in value chains, including through smart specialization: BE, BG, FR, CY, PL, LV, EE • Digitalisation of companies and digital public services need further investment in BE, CY, AT, SI, ES, SK, PL, EE, DE, BG • Investing in intangibles and innovation building: HU, PL, CZ , • Investment related to resource efficiency and climate risk prevention: EE, LU, SK, PT, BG, NL, IT, CY, FR See: http://europa.eu/rapid/press-release_IP-19-1389_en.htm and COM(2019) 150 final

Horizon Europe strategic planning process: • Consultation and conference to prepare the Strategic Plan for Horizon

Europe closed. HE mission boards created.

• Consultation on the Horizon Europe Implementation strategy: • How to improve the dissemination and exploitation of the results of Horizon projects • Creation of central data hub on R&I investments made at EU, national, regional and local levels • Make information on all the EU funding programmes available in a single portal • How to improve synergies with other EU funded programmes, including Structural Funds Deadline for replying was October 4th See: https://ec.europa.eu/eusurvey/runner/HorizonEurope_Codesign_Implementation

• Consultation on “European Partnerships”: aiming to mobilise Horizon Europe, national and other funding for research and innovation actions around topics, many of which are also frequently prioritised in S3 Strategies, such as:

o Innovative Health o Key Digital Technologies o Smart Networks and Services o Clean Aviation o Circular bio-based Europe o Clean Hydrogen o Safe and Automated Road Transport o Innovative SMEs

Deadline for replying is November 6th. See: https://ec.europa.eu/eusurvey/runner/consultationpartnershipshorizoneurope?surveylanguage=en

Design phase is key to synergies (3)

Financial level synergies 1. Sequential funding: draw on results of previous EU funding for next

projects: better information on projects, e.g. via www.innoradar.eu mapping of infrastructures, e.g. ERDF supported Digital Innovation Hubs:

http://s3platform.jrc.ec.europa.eu/digital-innovation-hubs-tool MoUs with regional bodies (e.g. CleanSky Joint Undertaking), etc. …

2. Alternative funding (Seal of Excellence): under ERDF rules with less red tape and more possibility to align ERDF funding to other programmes' conditions (Art.67(5), 48(2)c CPR, Art 11, 20(5), 43(6) Horizon Europe Regulation, Art. 22(2) DEP, Art. 14(2) SMP, etc.)

3. Transfer of up to 5% to directly / indirectly managed EU funds, implemented under rules of the receiving fund (Art 21 CPR, Art 9(8) HE Regulation, Art.9(5) DEP, Art.4(6) SMP ...)

4. Cumulative funding: Joint - possibly pro rata - funding for projects, with each part under own fund's rules (Art. 57(9) CPR, Art 9(8) HE Regulation, Art 22(1) DEP, Art 14(1) SMP ..)

Financial level synergies Seal of Excellence - alternative funding (1)

• Horizon Europe side Seal of Excellence award follows previous practice as in Horizon 2020 "SME

instrument / EIC pilot, a priori only to SMEs (no mid-caps) and only for "innovation actions" type of activities (no Technology Readiness Level 9) and only for grants, not equity (Art 43(6) HE Regulation)

Horizon VC support may be combined with an ERDF grant for a SoE project (Art 43 Horizon Europe Regulation)

ERDF managing authorities may receive directly information on SoE recipients subject to the conclusion of confidentiality agreements and prior authorisation from the applicants (Art 20(5) Horizon Europe Regulation)

Horizon work programmes will specify under which calls SoE will be awarded (Art 20(5) Horizon Europe Regulation)

Projects that receive alternative funding thanks to an EIC SoE may benefit from Horizon EIC business acceleration services (Annex I to Horizon Europe Decision, 1.1.3.)

• ERDF side Projects may receive directly, without a new qualitative evaluation, ERDF or ESF+

funding under CPR rules (i.e. only check of eligibility, contribution to programme objectives, smart specialisation priorities, SME status and other issues not guaranteed by “Seal” before signing ERDF grant agreement) (Art. 67(3) and (5) CPR)

The cost eligibility rules for the ERDF programme can be aligned to the HE eligibility cost rules, including use of "simplified cost options" (unit costs, lump sums, flat-rates) (Art. 48(2)c CPR)

SME innovation projects up to EUR 2.5 million with a Seal of Excellence from Horizon, might benefit from a GBER modification to get same aid intensity as the funding rate in Horizon (See proposal for an enabling Regulation COM(2018) 398 final)

Beneficiary is provided with a document setting out all the conditions for support, incl. the method for determining the eligible costs and the conditions for payment of the grant (Art 67(4) CPR)

Financial level synergies Seal of Excellence - alternative funding (2)

Financial level synergies Synergies through cumulative funding

• Cumulative funding from different Union instruments in the same operation, as long as double financing is avoided (Art. 57(9) CPR & Article 23 HE Regulation):

Rules of each contributing Union programme apply to its respective contribution

Cumulative financing shall not exceed the total eligible costs Support from different Union programmes may be calculated on a

pro-rata basis Document setting out for the beneficiary the conditions for support

Financial level synergies Synergies through voluntary transfers (1)

• ERDF side: Voluntary transfer of Cohesion Policy allocations: MS may request transfer of up to 5 % of their programme resources to any other EU Fund or instrument under shared, direct or indirect management (Art. 21 CPR)

Transferred resources may only concern the future budgetary commitments

The relevant ERDF programme has to be amended, incl. its financing plan Investments have to be for the benefit of the transferring Member State Commission may object to a request for transfer if achievement of ERDF

programme's objectives would be undermined Rules of the receiving EU Fund/instrument apply to the transferred budget Financing plan of OP has to specify transfer (Art. 17(3) f (i) CPR) for future

calendar years

• Horizon Europe side:

• The transferred ERDF budgets will be implemented under HE rules (proposed Article 9 (8), & 19(1) Horizon Europe Regulation) The Commission shall implement those resources directly in accordance

with point (a) of Article 62(1) of the Financial Regulation or indirectly in accordance with point (c) of that Article.

"Where possible", those resources shall be used for the benefit of the Member State concerned.

For actions benefiting from amounts under Article 9(8), only entities established in the jurisdiction of the delegating Managing Authority shall be eligible for funding out of these amounts. (Article 19(1) HE Regulation )

Financial level synergies Synergies through voluntary transfers (2)

Synergies at management level • Managing Authorities may identify Horizon (DEP, SMP…) implementing bodies as intermediate bodies for implementing ERDF funds under CPR rules. (Art 67(3) CPR)

• “Co-fund” partnerships that pool Horizon Europe and ERDF / ESF+ funds in a programme-like manner, implemented jointly by the participating national & regional bodies (Art. 65(5), 67(5) CPR, Art 8 Horizon Europe Regulation)

• Simplified cost options allow to align ERDF funding conditions to many Horizon funding rules: Unit costs, lump sums and flat rates may be established on the basis of the rules on corresponding unit costs and lump sums applicable in other Union funds for a similar type of operations (Art. 48(2)c, 49 and 88(2)c CPR)

• Horizon Europe programme committee shall be regularly informed on the progress of the implementation of Horizon Europe, as well as synergies with other relevant Union programmes. (Art.12(6) HE Decision & Annex III)

State aid simplifications • Fitness check of RDI Framework, de minimis, regional aid, etc.:

https://ec.europa.eu/competition/state_aid/modernisation/fitness_check_en.html

• GBER revision (1st round of public consultation closed on 27 September): https://ec.europa.eu/competition/consultations/2019_gber/index_en.html • Aid for Seal of Excellence SME R&D- projects (new Article 25a): Horizon rules apply

re. eligible costs. Horizon maximum aid intensities apply: up to 100% for fundamental research or industrial research and 70% for experimental development (up to maximum EUR 2.5 million per undertaking per project).

• SoE Marie Skłodowska-Curie actions (new Article 25a): Horizon rules apply re. eligible costs. Aid intensity up to 100%

• Aid for co-funded R&D-projects under Horizon Europe (new Article 25b): Horizon rules on eligible costs apply. Total public funding (EU + State aid) up to 100% for fundamental research and industrial research, 70% for experimental development. Provided HE funding at least 35 - 30%

• Aid for ‘Teaming’ actions, including for Teaming-related infrastructure investments (new Article 25b): Horizon rules on eligible costs apply; in addition, investments costs in project-related tangible and intangible assets shall be eligible. Total public funding (EU + State aid) up to 100% for fundamental research and industrial research, 70% for experimental development; for Teaming-related infrastructure up to 70% of the investment costs.

Next Steps towards the new generation of ERDF programmes

Proposals for CPR, ERDF, etc. Regulations (May 2018): • trilogue started in October 2019; adoption expected in 2020

2019 European Semester Country Reports: Annex D contains investment guidance on Cohesion Policy funding (Feb. 2019) • All contain reference to innovation investments

“Informal dialogue” with MS and Regions has begun: • timetables (roadmaps) for Cohesion policy programming received in June 2019

Preparation for fulfilment of “enabling conditions”: • e.g. revisiting Smart Specialisation Strategies SHOULD HAVE STARTED …

Partnership agreements (first drafts end 2019) • Incl. transfers to InvestEU and possibly first round of transfers to other EU programmes

Approval of Programmes probably until end of 2021

Implementation via Managing Authorities (role of Monitoring Committees; partnership – multi-level & stakeholders): • Definition of “selection criteria”, including possibly for “Seals of Excellence”

Questions and Answers

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