1. Sectoral costs of environmental policy - Main findings
Igor Jelinski
DG Environment, G.3 – Research, Sciences and Innovation
Luxemburg, May 21st 2008

2. Main features
An “integrated” picture of the effects of environmental policy,
Main questions:
Significance of costs?
Competitiveness impact?
Costs changing over time?
Differences between MS?
Used primary data and secondary data supplemented by an online questionnaire,
Preliminary results have been discussed with a stakeholder workshop.
Study to be found at:

3. Main conclusions
Analysed oil chain industry, electricity producers, the iron and steel industry, and the textiles and leather sectors
Costs generally less than 2% of production costs
Costs overall stable whilst environmental ambition gone up, so unit costs of abatement falling
innovation key
Integration between pieces of legislation (total is less than sum of parts)
Perception of costs is different (seen as higher)
Differences between Member States, US, Australia – no obvious pattern
No evidence of link to relocation of industry or impact on competitiveness.

4. Reflections on data availability
Data difficult to access from NSO due to confidentiality issues,
Instead an online questionnaire was used, but response rate low,
Quality of data is varying, lack of consistent time series,
Little information on expenditure related to climate change.

5. Recommendations Streamlining of data gathering process,
Development of reliable time series,
Need to develop assessment methods for climate change expenditure,
Inclusion of questions on EPE in established business surveys,
Data received from NSO was useful, but should be put in context, i.e.
Main drivers of EPE?
Cooperation between NSO necessary in order to draw comparisons.
Data collection carried out by NSO more successful?

6. Environmental industry - Other initiatives
Igor Jelinski
DG Environment, G.3 – Research, Sciences and Innovation
Luxemburg, May 21st 2008

7. Environmental industries
Ongoing initiatives/ Monitoring eco-innovation:
Networked Observatory on Eco-innovation,
Community Innovation Survey 2008,
Cooperation with OECD,
Projects by DG ENTR.
Market up-take of eco-innovation:
Championing eco-innovation,
Market replication projects,
CIP Financial instrument.

8. Networked Observatory on Eco-innovation under Europe INNOVA
Monitoring eco-innovation
Networked Observatory on Eco-innovation under Europe INNOVA
Knowledge resource on eco-innovation: collection and analysis of up-to-date and strategic information on markets and technology trends
Building on existing projects and networks, and on the experience of the European Environmental Agency
Yearly report on eco-innovation for public diffusion: state-of-play based on relevant indicators, mapping of situation in member States and in specific sectors, analysis of trends
€2 million over 3 years, up to 95% of eligible costs,
Call will be launched in cooperation with DG ENTR
-12-

9. Monitoring eco-innovation
Inclusion of eco-innovation module in CIS 08,
Cooperation between DG ENV and OECD on the development of patent-based indicators for eco-innovation,
Competitiveness study of eco-industry in Europe (to be launched by DG ENTR),
Analysis of the potential for eco-innovation (Europ INNOVA Sector Watch to be launched by DG ENTR).

10. Championing eco-innovation policy under PRO-INNO Europe
Market up-take
Championing eco-innovation policy under PRO-INNO Europe
Better understanding of eco-innovation dynamics and role of public policies,
Identifying and replicating best practices,
Partnership of national and/or regional public authorities (ministries, agencies) responsible for innovation programmes and involved in support to eco-innovation
A think-tank to provide expertise, working groups on GPP, Recycling, International cooperation, outreach activities
€3 million over 3 years, up to 95% of eligible costs
-10-

11. Pilot and Market replication projects €195 million (2008-2013)
Market up-take
Pilot and Market replication projects €195 million ( )
Support the first applications and market uptake of innovative technologies and practices
Aim at bridging the gap between Research & Development and commercialisation
Cover market oriented activities, with a strong emphasis on SMEs
To be run by the EACI in close cooperation with DG Environment
SMEs = entreprises with less than 250 employees
and an annual turnover below 50 mio€
(or an annual balance sheet below 43 mio€)

12. Market up-take GIF1 SEED & START-UP STAGE GIF2 EXPANSION STAGE
in their establishment or early stages
GIF2
EXPANSION STAGE
in their expansion stage
Operating in Participating Countries (EU27, EEA/EFTA, 5 other MoU signed, others will follow)
Targeting > 50% of innovative SMEs with high growth potential and being:
Commercially oriented/ best market principles and practice
Independent management team with skills and experience to manage a fund
Clear strategy (number of investments, adequate deal flow, established exit policies)

13. DG Environment, G.3 – Research, Sciences and Innovation
Concluded studies on eco-innovation 1. Measuring Eco-Innovation 2. Financing Eco-innovation
Igor Jelinski
DG Environment, G.3 – Research, Sciences and Innovation
Luxemburg, May 21st 2008

14. MEI- Measuring eco-innovation/ EcoDrive
Objectives:
Conceptual clarification of eco-innovation (developing a typology)
Identify the main methodological challenges in developing indicators and statistics on eco-innovation
Defining further research in developing eco-innovation indicators
Make recommendations for possible indicators, taking into account the availability of data

15. Measuring eco-innovation New proposed typology:
Environmental technologies
Organisational methods and systems
New or environmental improved products, environmental services
Green system innovations (new product systems)
1)…
2) Environmental management and auditing systems: formal systems of environmental management involving measurement, reporting and responsibilities for dealing with issues of material use, energy, water and waste
Chain management: cooperation between companies so as to close material loops and to avoid environmental damage across the value chain (from cradle to grave
3) New or environmentally improved products (goods) including eco-houses and buildings
Environmental services: solid and hazardous waste management, water and waste water management, environmental consulting, testing and engineering, testing and analytical services.
A possible third category is green financial products such as greenlease, climate mortgage, CO2 compensation schemes (Trees for travel)
4) Alternative systems of production and consumption, involving new production technologies, knowledge, changes in organisation, institutions and infrastructures and possibly changes in consumer behaviour
Examples are renewables-based energy systems and chain mobility

16. FUNDETEC: Main Objective
Financing
eco-innovation
FUNDETEC: Main Objective
Improvement of finance for environmental technology development
Comparison of different types of instruments
Recommendations for evolution of existing schemes and for new schemes and instruments
From three Perspectives:
Public Finance Instruments
Commercial (Private) Finance Instruments
Perspective of Technology Developers

17. Public Finance Instruments
Financing
eco-innovation
Public Finance Instruments
20 Countries, 30 Institutions, 45 Instruments
Institutions focussing exclusively on environmental aspects/ technologies or promotion of technology innovation or SME development
Results
Predominantly grants & loans
Also tax incentives & guarantees
Lack of instruments addressing early stages

18. Private Funding Instruments
Financing
eco-innovation
Private Funding Instruments
24 Countries, 141 Institutions/ Organisations, 179 Instruments from Europe, North America, and Asia. Funds, banks, venture capital and private equity
Results
Predominantly private equity & venture capital
Also pension funds and traditional bank loans
Lack of private instruments addressing early stages, almost nothing addressing pre-commercialisation / mid-stage

19. Technology Developers
Financing
eco-innovation
Technology Developers
24 Countries, 37 Technology Developers
Public policy is far more developed in Europe, in general, than North America or Asia
The predominant source of funding in Europe: grants Followed by high usage of the developers’ own funds and debt in the form of loans.
There was little adoption of other financial instruments

20. Barriers and solutions More info: www.fundetec.eu
Financing
eco-innovation
Barriers and solutions
Project Preparation / Administrative Barriers: enhanced, comprehensive support
Lack of Management and Communication Skills: networks for public financers to contact researchers and industry
Risk Assessment: provide risk minimising instruments to leverage more private investment
Lack of Awareness: project specific support facilities that share some of the elevated transaction costs
More info:

21. Thank you for your attention!
Please visit:
Igor Jelinski
European Commission, DG Environment
Tel:
-14-