Existing finance of €24 billion ($26.38 billion) from the Horizon 2020 research budget will be extended to support circular economy projects and the realization of EU climate goals, the European Commission announced Thursday.
The announcement was made at the Innovative Enterprise ‘Financing the Circular Economy’ conference held in Luxembourg to promote engagement of businesses in the circular economy with European financial instruments, Yahoo reported.
An amendment to the InnovFin Delegation Agreement signed at the conference will enable higher-risk sustainable business models and plans to access credit through InnovFin, an EU finance support program that comes under the Horizon 2020 banner. This funding was previously only available to innovative industrial and technology projects.
The amendment will also see the InnovFin Advisory financial advice service, housed in the European Investment Bank, support mid-sized businesses in making their circular economy projects investment-ready to benefit from the InnovFin program.
Horizon 2020, the EU research program for 2014-2020, was launched in 2014 to give innovative firms easier access to finance. The InnovFin program offers a range of tailored products that will make €24 billion of financing support for Circular Economy research and innovation projects available until 2020.
Financing
The move to open up the investment opportunity came after the EIB analyzed the role of finance in the transition to a Circular Economy as part of an InnovFin advisory mandate for the European Commission and the Government of Luxembourg. The associated report, ‘Assessment of access-to-finance conditions for projects supporting circular economy’, presents practical actions to finance the re-use, repair, refurbishing and recycling of existing materials and products.
As well as a broadening of InnovFin’s eligibility criteria to attract circular economy projects, the report proposes setting up a platform for institutional and private investors ready to support projects and encourage new funding applications.
It states that broader, non-finance related recommendations directly concern relations between manufacturers and their industry peers, as well as consumers.
The report makes further recommendations on how consumers can receive more information on the expected lifetime of products or availability of spare parts, and how to assist enterprises in the creation of sound secondary markets and sharing platforms for manufactured goods or by-products.
Commenting at the conference in Luxembourg, Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries, stated: “This Commission has made the transition to a more circular economy a priority of our work. And for small and medium businesses across Europe, we are committed to making that transition as easy as possible.
“Now one week after we launched our proposal, we have a real financial commitment. Today’s signing of an extension of funding coverage with the EIB will help our risk-takers make that leap to a more sustainable model of production”.
