Funding for bioeconomy related projects is available in the form of grants and financial instruments such as loans and equity. Blending of funding sources is possible.
Horizon Europe is the EU’s research & innovation framework programme for 2021 to 2027. It follows Horizon 2020 (2014-2020). Projects can be either fully funded or co-funded by Horizon Europe:
- Horizon Europe Cluster 6 – Food, Bioeconomy, Natural Resources, Agriculture and Environment – will advance knowledge, expand capacities and deliver innovative solutions to accelerate the transition towards the sustainable management of natural resources.
- The Circular Bio-based Europe Partnership (CBE) is expected to invest more than €2 billion, from EU and private funds combined. It will be the successor of the Bio-based Industries Joint Undertaking (BBI-JU), a public-private partnership between the EU and the Bio-based Industries Consortium (BIC).
- ERA-NET Cofunds under Horizon 2020 are designed to support programme collaboration between Member States in any part of the research-innovation cycle. A list of active ERA-NET Co-funds that publish funding calls can be found on the ERA-Learn website. Some of the active Co-funds related to bioeconomy are FOSC (Co-Fund on Food Systems and Climate), BlueBio (Co-fund on blue bioeconomy), ICT AGRI-FOOD (ICT-enabled agri-food systems), ForestValue (Cofund Action Innovating forest-based bioeconomy) and FACCE ERA-GAS (monitoring & mitigation of greenhouse gases from agri- and silvi-culture).
- European Joint Programme Cofunds (EJPs) are co-fund actions designed to support coordinated national research and innovation programmes, through the implementation of a joint programme of activities. They include EJP Soil, which targets climate change adaptation and mitigation, sustainable agricultural production, ecosystem services and restoration and prevention of land and soil degradation.
The LIFE programme is the EU’s funding instrument for the environment and climate action created in 1992. Calls for traditional projects are managed by the Executive Agency for SMEs.
- The Environment sub-programme includes calls under the topics ‘Environment and Resource Efficiency’ and ‘Nature and Biodiversity’.
- The Climate sub-programme manages calls under the topics ‘Climate change mitigation’ and ‘Climate change adaptation’.
Common Agricultural Policy (CAP) and the bioeconomy
The Bioeconomy is included in one of the nine specific objectives of the future CAP 2021-2027 to “promote employment, growth, social inclusion and local development in rural areas, including bioeconomy and sustainable forestry”. Member States have to programme bioeconomy related funding in their CAP National Strategic Plans.
European Structural and Investment Funds (ESIFs)
Jointly managed by the EC and Member States, ESIF investment targets boosting jobs, growth and investment, particularly in the least developed areas. ESIF consists of five different funds, four of which are relevant for the bioeconomy:
- The European Agricultural Fund for Rural development (EAFRD) supports rural development measures under the second pillar of the CAP. It is implemented through national and regional Rural Development Programmes (RDPs).
Key RDP measures for supporting a sustainable bioeconomy that may be programmed by the Member States and regions can be identified here on pages 23-24.
- The European Maritime and Fisheries Fund (EMFF) supports sustainable aquaculture developments and supports coastal communities in diversifying their economies. It funds national operational programmes managed by Member States. The European Commission has delegated to EASME the implementation of part of the EMFF actions in the area of the blue economy.
- Cohesion Fund (CF) is aimed at Member States whose Gross National Income (GNI) per capita is less than 90% of the EU average. It can support projects related to energy which benefit the environment in terms of energy efficiency and the use of renewable energy.
- The European Regional Development Fund (ERDF) focuses its investments on several key priority areas including innovation and research and the low-carbon economy. EU regions publish Smart Specialisation Strategy (RIS3) documents which outline priority R&I areas such as agriculture, waste processing and biorefineries.
The Innovation Fund will provide around €10 billion of support over 2020-2030 for highly innovative technologies and big flagship projects with European value added that can achieve significant emission reductions in carbon intensive sectors. This includes low-carbon technologies (including substitutes), and renewable energy generation projects.
Financial instruments (loans, equity, etc.)
European Investment Bank Group
The EIB provides loans for up to 50% of the total cost of projects in the agriculture, forestry and forest-based sector, blue economy and solid waste management sectors and value chains. Projects must be in line with the priorities of the EIB such as transition to a low-carbon and climate resilient economy. Loans are awarded directly as minimum amounts of €7.5 million for investment projects of minimum €15 million or through intermediary banks for smaller amounts (overview).
The European Fund for Strategic Investments (EFSI) launched by the EC and the EIB in 2015 provides guarantees for funding of economically viable projects and investment with a higher risk profile such as agricultural and bioeconomy projects that would otherwise not be funded by the EIB. The process to obtain EFSI financing is largely the same as for a traditional EIB loan.
The Agricultural and Bioeconomy Programme Loans are a financing initiative under EFSI launched in April 2020. It will support SMEs and Mid-Caps operating throughout the value chains of production and processing of food, bio-based materials and bioenergy. Direct lending for private sector investments ranges from €15 million to €200 million, with the EIB loan amount ranging from min €7.5 million to €50 million.
Under EIF, financial instruments targeting specifically the agriculture and bioeconomy sector include various products, such as capped guarantees, uncapped guarantees and portfolio risk-sharing loans. One example is the AGRI Guarantee Facility, which was introduced in the French region of Languedoc Roussillon Midi Pyrénées (currently Occitanie), providing guarantees and equity to financial intermediaries to increase the amount of finance made available to SMEs, agriculture, agro-food, forestry and rural businesses. Finance can be accessed through EIF financial intermediaries.
InnovFin - EU Finance for Innovators is a joint initiative of the European Investment Bank Group and the EC under Horizon 2020. It provides direct or indirect finance for research and innovation to small and large innovative firms through diverse InnovFin products. Beneficiaries may access finance from €25,000 to €500 million through:
- direct funding for larger businesses e.g. by Emerging Innovators and Corporate Research Equity
- indirect funding for early stage enterprises and SMEs through intermediaries and sub-intermediaries currently operating under the InnovFin SME Guarantee Facility.
The European Circular Bioeconomy Fund (ECBF), backed by a guarantee from InnovFin, has a target volume of €250 million, with the EIB investing up to €100 million. It funds bioeconomy projects and companies in the demonstration and commercial development phases, filling the late-stage funding gap to bring products to the markets.
Target industries subsectors are:
- circular business models (re-use, recycling, waste stream utilization);
- biorefineries and conversion technologies;
- biomass production: increased output and reduced footprint;
- bio-based materials: construction, polymers, fibers, composites.
The Natural Capital Financing Facility (NCFF) is a financial instrument of the EIB and the EC supporting (bioeconomy) projects delivering on biodiversity and climate adaptation through tailored loans and investments.
Besides the lending activities, the EIB also provides advisory support to the sector through the fi-compass platform, as well as on a bilateral basis.
fi-compass is a single advisory platform, jointly designed by the EC and EIB, to support national authorities and other interested parties willing to use financial instruments in the framework of the European Structural and Investment Funds (ESI Funds).
fi-compass provides practical know-how and learning tools on financial instruments for EAFRD and EMFF managing authorities, with the aim to promote access to finance and investment in agriculture and bioeconomy benefitting EU rural areas. To support managing authorities in their programming exercise in the post-2020 period, fi-compass recently published a study on financial needs in the agriculture and agri-food sectors in 24 EU Member States.
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