Sep 06 2016

Cañete confirms NER300’s date with destiny in December 2016 and the recycling of unused NER300 money to NER400 Innovation Fund

Speaking at the Environment Council of 20 June the Commissioner for Climate Action Miguel Arias Cañete said, “Before the end of 2016 we will know how much money remains unused from those projects awarded in the first NER300 call.” By mid-December of this year NER300 rules say that projects in the first call, for which awards totalling 1.089 bn EUR were made, need to reach final investment decision and have secured all the permits necessary for their construction.

The unused money will be recycled to NER400 Innovation Fund, Cañete said: “The EC proposal foresees also that the money remaining for NER300 projects is added to the Innovation Fund. This was envisaged by the co-legislator when the Market Stability Reserve was agreed last year.” He hinted that it could allow NER400 Innovation Fund to start early, i.e. before Phase 4 of the Emission Trading Scheme begins in 2021: “If it turns out that a considerable amount remains unused, we may want to reflect how we can speed up the reuse of this money to boost innovation and accelerate the roll-out of innovative low-carbon technologies.”

The extent to which the following statement by DG CLIMA Director General Jos Delbeke is reality or caricature is unknown. He made it at the 9 June High Level Roundtable on Low carbon innovation (14:40:00). Referring to the risks inherent in designing funding mechanisms, he said that they’re at risk when “the business cycle turns around. The perspectives are less attractive and half of the projects fall apart because while they were put up before Lehman brothers, they were delivered after Lehman Brothers and a lot of the good intentions did not materialise because of that.” There’s an allusion in there to the amount of money that may be at stake. At the same event, Delbeke appealed for leniency when it comes to judging whether NER400 has succeeded or failed.

Sweden senses that many projects will be declared dead in December. In a written statement to the Council of Ministers it commented that “the NER300 program has significant volumes of funds which have not been disbursed,” preferring to use this non-disbursed money to boost the size of NER400 Innovation Fund than to sell another 50 M tonnes of carbon. The country is home to three NER300 projects, including one, GoBiGas Phase 2, that is “not currently being delivered” (presentation of 21 June at Stakeholder Plenary Meeting, European Biofuels Technology Platform). This project was awarded 58 797 168 EUR. The Belgian project ‘SLIM’, on smart grids, is also withdrawn (8 165 192 EUR).

An MEP has joined the chorus of concern over unused funds. Ivo Belet said at the meeting of the European Parliament’s Environment Committee of 21 June 2016 that, learning from the NER300 experience, it will be important in NER400 Innovation Fund to “make sure there’s no money left at the end of the period” (10:34:44).

The agenda for the Climate Change Committee meeting of 22 September carries an item with the terse description ‘Full deployment of NER 300 funds’, indicating that the EC and Member States are considering options.