Newsroom / News / Media / Info Magazine LGP NEWS 02/2021 / Green energy funding at a glance

Green energy funding at a glance

Green energy funding at a glance

As part of the Green Deal, the European Union and its Member States are providing a wide range of subsidies for sustainable energy. In the following, we will briefly discuss key aspects of the European Union’s support system and then list some of the Union’s own as well as state funding opportunities. 

EU funds are either managed centrally and directly, dealt with in a decentralised fashion by Member States, or handled via mixed management approaches. If they are managed centrally, funds are managed by the European Commission itself. These funds include, for example, research funds within the Horizon Europe or LIFE programmes. However, the majority of funds are managed jointly by the EU and the Member States, with the EU entrusting the management to the Member States. These include, for example, the European Structural and Investment Funds (ESI Funds) and the European Agricultural Fund for Rural Development (EAFRD). The main legal basis for this is the EU Common Provisions Regulation (CPR). In addition, each Member State must draw up and submit a Partnership Agreement. This is intended to define the strategic direction of the programme and to provide information on coordination and demarcation in relation to the funds themselves, as well as in relation to national or regional programmes. 

Climate protection measures in Austria are co-financed from the ESI funds. In addition to the funds from the Multiannual Financial Framework (MFF), 219 million euros are available to Austria in 2021 and 2022 under ‘React-EU’ (as part of the reconstruction programme ‘NextGenerationEU’). These funds will flow into existing funding programmes of the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD) and must be disbursed by 2023. The ERDF will receive over EUR 28 million in 2021 under the ‘Investment in Growth and Jobs’ (IWB/ EFRE) objective for areas relating to the use and deployment of renewable energy, investments for the economical use of resources and energy, and investments for the replacement of fossil fuels while saving energy. 

Kommunalkredit Public Consulting GmbH (KPC) is responsible for awarding grants in these areas throughout Austria. KPC’s tasks are described in the Environmental Support Act and are determined by a contract. In addition to the IWB/EFRE programme, KPC can access funds from the EAFRD. Whether a project is funded with EU or national funds depends on the individual case in question. If a project meets the requirements for EU funding, co-financing is possible. However, if these conditions are not met, KPC can fund the project with national funds. If a project is co-financed with EAFRD or ERDF funds, certain publicity requirements apply. Any co-financing follows a two-stage procedure. If the funding does not exceed the amount of EUR 200,000 over a three-year period, it is considered ‘de minimis’ aid, which is exempt from the notification requirement. In this case, the funding is awarded in a single-stage procedure and only includes national funds. 

The Austrian Development and Resilience Plan 2020-2026, which provides for funding measures under the ERDF and EAFRD, is also worth noting in this context. The programme is still being planned, but the intention is for the ERDF to primarily support measures by SMEs in the area of energy and resource efficiency, as well as measures by municipalities in the area of energy efficiency and renewable energy. Measures in rural areas for the use of renewable energy sources are to be supported within the framework of EAFRD. The funding is to be processed within the framework of environmental funding in Austria, and project assessment and the processing of funding contracts will also be carried out by KPC within the framework of the development and resilience plan. 

Within the Horizon programme, there is some funding for issues relating to the environment and renewable energy. LIFE is the EU’s funding programme for the environment and sustainability. CINEA (European Climate, Infrastructure and Environment Executive Agency) plans to publish the LIFE grants in July 2021, with an expected submission deadline of November 2021. LIFE is implemented via direct or indirect management. This means that the funding programme is implemented either directly by the Commission or by third countries or their designated bodies, international organisations or the development agencies of EU countries, the European Investment Bank (EIB) or the European Investment Fund (EIF). 

In addition to these two programmes, the European Bank for Reconstruction and Development (EBRD) also offers subsidised financial services, such as soft loans, guarantees and equity participation in environmental and energy investments. The EIB has committed itself to aligning all its lending activities with the objectives of the Paris Agreement. In particular, the EIB will increase the proportion of its investments under its climate action and environmental sustainability priority to 50% by 2025 and stop financing fossil fuel projects by the end of 2021. The public financing institutions only offer financial or advisory support if strict criteria are met. In principle, every project that promotes the economic policy goals of the EU is eligible for financing, with the majority tending to be large-scale projects worth millions.


AUTHOR:

Univ.-Doz. Dr. Dr. Alexander Egger, Attorney at Law and Head of EU, Regulatory, Public Procurement & State Aids at LANSKY, GANZGER + partner

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