LeX-Ray

The European economy is facing a sharp downturn resulting from the financial crisis. Extraordinary and immediate efforts are needed to counter this serious and unprecedented economic situation. In order to restore confidence among market players, measures impacting on the economy need to be finalised without delay.

At the same time it is clear that the long-term strength and sustainability of the European economy depend on reshaping it to face the demands of energy security and the need to reduce greenhouse gas emissions. Increasing concerns about securing reliable gas supplies reinforce this conclusion.

In light of these concerns, the European Council of 11 and 12 December 2008 endorsed in its conclusions the European Economic Recovery Plan (Recovery Plan), presented by the Commission on 26 November 2008, which sets out how Member States and the European Union can coordinate their policies and provide new stimulus to the European economy, targeting that stimulus to the Community’s long-term objectives.

An important part of the Recovery Plan is the proposal to increase Community spending in defined strategic sectors, so as to address the lack of confidence among investors and to help develop the path to a stronger economy for the future. The European Council asked the Commission to present a list of specific projects, taking into account an adequate geographical balance, to reinforce investment in the development of, in particular, infrastructure projects.

For the Recovery Plan to be effective, it is vital to finance measures that rapidly address both the economic crisis and the Community’s urgent energy needs. Nevertheless, the special programme established by this Regulation should in no way set a precedent for future co-financing rates in the field of infrastructure investments.

In order to have a tangible and substantial impact, those measures should be focussed on a few specific sectors in which action would make a clear contribution to the objectives of the security of energy supply and the reduction of greenhouse gas emissions; there exist large, mature projects capable of making efficient and effective use of significant amounts of financial assistance and of catalysing significant amounts of investment from other sources, including from the European Investment Bank; and action at European level would add value. The sectors of gas and electricity infrastructure, offshore wind energy and carbon capture and storage fulfil those criteria. The choice of those sectors reflects the particular circumstances of the Recovery Plan and should not call into question the high priority attached to energy efficiency and the promotion of energy from renewable sources, which were addressed in the Recovery Plan.

In the event that it is not possible to commit all funds by the end of 2010, the Commission has declared its intention, if appropriate, to propose, when reporting in 2010 on the implementation of this Regulation, measures allowing for the financing of projects consistent with the Recovery Plan, such as projects in the areas of energy efficiency and energy from renewable sources.

In the case of gas and electricity infrastructures, certain challenges have developed in recent years. The recent gas crises (winters 2006 and 2009) and the increase of oil prices until mid-2008 demonstrated Europe’s vulnerability. Indigenous energy resources — gas and oil — are decreasing to the extent that Europe is increasingly dependent on imports for its energy supply. In this context, energy infrastructure will play a crucial role.

However, the current economic and financial crisis is affecting the implementation of energy infrastructure projects. Some important projects, including projects of Community interest, may face severe delays in implementation due to scarcity of funds. Urgent action to support investment in energy infrastructure is therefore appropriate. Given the significant time necessary to plan and then execute such projects, it is important that the Community invest in such infrastructure immediately so that it may, in particular, accelerate the development of projects of particular importance to the security of energy supply within the Community. This will be vital to ensure the Community’s security of energy supply at competitive prices when the economy rebounds and global energy demand increases.

Among energy infrastructure projects, it is necessary to select those that are important to the operation of the internal energy market, to the security of energy supply and which also contribute to the recovery of the economy.

In the cases of carbon capture and storage and offshore wind energy in particular, this Regulation should build on the Strategic Energy Technology Plan for Europe, presented by the Commission on 22 November 2007, which called for a joint and strategic plan for energy research and innovation efforts consistent with EU energy policy goals, and a commitment to the establishment of six European Industrial Initiatives. The European Council of 16 October 2008 called in its conclusions on the Commission to significantly accelerate the implementation of the Strategic Energy Technology Plan for Europe. The programme initiates the funding for carbon capture and storage and offshore wind projects without prejudice to the future creation of the six industrial initiatives on energy demonstration projects as outlined by the Strategic Energy Technology Plan for Europe.

In order to have an immediate impact on the economic crisis, it is essential for this Regulation to list the projects that may receive immediate financial assistance, subject to conformity with criteria that ensure efficiency and effectiveness and to the limits set by the financial envelope.

In the case of gas and electricity infrastructure projects, a list should be established according to the project’s contribution to the objectives of security and diversification of supply as identified in the Commission’s Second Strategic Energy Review of 13 November 2008 and endorsed by the European Parliament in its resolution of 3 February 2009 and by the Council in its conclusions of 19 February 2009. Projects should be selected on the basis that they implement the priorities identified in that Review, have achieved a reasonable degree of maturity, and contribute to security and diversification of sources of energy and supplies; optimisation of the capacity of the network and the integration of the internal energy market, in particular concerning cross-border sections; development of the network to strengthen economic and social cohesion by reducing the isolation of the least favoured regions or islands of the Community; connection of renewable energy resources; safety, reliability and interoperability of interconnected networks; and solidarity among Member States. The implementation of those projects will require a commitment from national, regional and local authorities to accelerate administrative procedures and authorisations. For many projects, support will not be forthcoming within the timeframe set if this acceleration does not take place.

In the case of offshore wind energy, the list should contain projects that can be considered, on the basis of information gathered from stakeholders in the framework of the European Wind Energy Technology Platform, and from industrial and other sources, to be approved and ready for implementation; to be innovative, while building on well established concepts; to be capable of acceleration in response to a financial stimulus; to have a cross-border significance; to be of a large scale; and to be able to demonstrate how the results of technological advances will be disseminated effectively in the light of the objectives and structures endorsed by the Strategic Energy Technology Plan for Europe. Financial assistance should be directed towards those projects that are in a position to progress substantially with project development in 2009 and 2010.

In the case of carbon capture and storage, the list should be largely established on the basis of information gathered from stakeholders in the framework of the Fossil Fuel Forum, the Zero Emissions Fossil Fuel Power Plants Technology Platform and other sources. Financial assistance should be directed towards those projects that are in a position to progress substantially with project development in 2009 and 2010. Readiness should be assessed on the basis of the existence of a mature and feasible concept for the industrial installation, including its carbon capture component; the existence of a mature and feasible concept for the transport and storage of CO 2 ; and a clear commitment on the part of local authorities to support the project. Projects should also demonstrate how the results of technological advances will be disseminated effectively and how they will accelerate the achievement of the objectives laid down in the Strategic Energy Technology Plan for Europe.

It will be necessary to select among eligible proposals. Such selection should guarantee, inter alia, that no more than one carbon capture and storage proposal is supported in each Member State, in order to ensure the investigation of a wide range of geological storage conditions and to support the objective of encouraging economic recovery across Europe.

Community funding should not unduly distort competition or the functioning of the internal market, having regard in particular to the rules on third-party access and possible third party access exemptions. Any further national funds in addition to Community funding should take into account State aid rules. Regardless of its form, Community financial assistance should be granted in accordance with the provisions of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities ( 3 ) (the Financial Regulation) and of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities ( 4 ) , except where the provisions of this Regulation explicitly depart from those rules.

Due to the urgent need to address the economic crisis and the Community’s pressing energy needs, this Regulation already contains detailed provisions concerning the arrangements for financial assistance, including a list of eligible projects. In addition, due to the urgent need for the stimulus, all legal commitments implementing the budgetary commitments made in 2009 and 2010 should be made before the end of 2010.

When actions financed under this Regulation are implemented, the financial interests of the Community should be protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and by the recovery of amounts unduly paid and, if irregularities are detected, by effective, proportionate and dissuasive penalties, in accordance with Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests ( 5 ) , Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities ( 6 ) and with OLAF of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) ( 7 ) .

Taking into account the nature of the issues in the sub-programmes, the Commission should be assisted by different committees for the selection of proposals retained for funding and the determination of the amount of funding to be granted under each sub-programme.

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission ( 8 ) .

Since the objectives of this Regulation, namely to aid economic recovery within the Community, face the demands of energy security and reduce greenhouse gas emissions by increasing spending in defined strategic sectors, cannot be sufficiently achieved by the Member States, and can therefore, by reason of the scope of this Regulation and the nature of the sectors and projects selected, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

Due to the urgent need to address the economic crisis and the Community’s pressing energy needs, this Regulation should enter into force immediately after its publication,