1 Angelo Salsi Head of Unit, LIFE & CIP Eco-Innovation EASMEInvesting in EU green economy: LIFE as a catalyst of shift from linear to circular model Angelo Salsi Head of Unit, LIFE & CIP Eco-Innovation EASME TECHITALY 2016, CIRCULAR ECONOMY 30 November 2016

2 What is LIFE Programme? L’ Instrument Financier pour l’Environnement  Programme for the Environment and Climate Action The only EU financial instrument dedicated exclusively to environment Since 1992 over 4000 projects co-financed - representing an investment of EUR 7.2 billion, of which LIFE contributed ~ EUR 3.4 billion Beneficiaries: SMEs, large companies, public sector, environmental NGOs etc There is a call for proposals every year LIFE budget for set at EUR 3.4 billion LIFE Programme - supporting environmental protection and investing in green innovation since its very start in early 1990s.

3 LIFE Budget

4 Types of LIFE projects At least 81% of the LIFE budget (approx. EUR 2,800 million): Traditional Projects Integrated Projects Technical assistance Capacity building Preparatory projects

5 "Traditional" projects Targets:Companies (SMEs & large), public administrations and NGOs active in the field of environment and climate protection Average size: 1 to 5 beneficiaries; EU contribution: €500,000 to €1.5 million Co-financing rate: 60-75%

6 LIFE helping "Close-to-market projects"LIFE supporting green innovation since its start in early 1990s Today – reinforced focus within LIFE on CLOSE-TO-MARKET PROJECTS Increased emphasis on sustainability, transferability and replication LIFE's role also for the economy and job creation LIFE's comparative advantage: LIFE projects are monitored from the start detecting the promising ones at a very early stage accompanying them throughout their implementation towards market maturity In view of supporting sustainable development & circular economy, LIFE is progressively paying more attention to supporting close-to-market projects. These projects do not replace but are complementary to other existing traditional LIFE projects. What is typical for the LIFE close-to-market projects? This type of projects delivers innovative environmental solutions capable of being widely taken up by the economy, generating growth and new employment opportunities. These projects aim to advance their technology readiness levels towards industrial and commercial scale. For some projects, the process of commercialization can already start during the project. LIFE's goal is to support more development of the market potential of promising projects and their investment readiness. As explicitly materialised in the 2016 LIFE Call Guidelines for traditional projects under Environment and Climate Action sub-programmes, the close-to-market projects need to be supported by a sound business plan, as well as a credible strategy for maintaining project results and ensuring sustainability, replication and transferability of the technological solution. In this context, EASME and the parent DGs Environment and Clima aim to build on the comparative advantage of LIFE in relation to other programmes: LIFE projects are monitored from the start, which enables detecting the promising ones at a very early stage and accompany them throughout their implementation towards market maturity. This joint cooperation continues the work already started in DG Environment including establishing cooperation between the LIFE Unit and the EIB under the EFSI/Investment Plan for Europe initiative and launching a first LIFE Investment Platform end of Furthermore, it builds on the good experiences of the CIP Eco-innovation programme. In 2016, the focus is two-fold on: Establishing a system under LIFE in order to be able to identify and support all promising projects towards market uptake and investments – in cooperation with the EIB and the Advisory Hub Reinforcing the role of LIFE as a catalyst and pre-opener for SMEs on their road towards other financing programmes and instruments (such as Phase 3 of SME Instrument or EIB InnovFin), as well as investors (such as the example of recent B2I Matchmaking event organized by the Eco-innovation & LIFE team of EASME at the EU Forum on Eco-innovation in Tallinn) Tallin event – Background: A recent Eurobarometer survey showed that nearly 60 % of the European SMEs indicate the lack of external financing as a barrier to accelerated eco-innovation uptake and development for companies. The B2I Matchmaking event organized by the Eco-innovation & LIFE team of EASME aimed to contribute to overcoming this barrier and explore in an interactive way how investors and businesses in the cleantech area could work better together. Pre-registered cleantech businesses from all over Europe funded by the CIP Eco-innovation and LIFE programmes presented their business ideas to investors, large investment funds, venture capitalists, crowd funders, and business angels. After a public coaching session, selected innovative SMEs presented their business models to the investors in a public pitching session, with ‘live’ feedback on their pitches. This session was followed by bilateral meetings with investors. Key figures & take-aways: Over 100 bilateral meetings between a dozen of investors and nearly 30 cleantech companies organized by the eco-innovation & LIFE team of EASME Over 7 hours of action: B2I pitching, B2B networking, presentations, discussions, interviews, and debriefing sessions with participating investors and SMEs Event impact assessment: All companies and investors confirmed seeing clear value in the B2I event and appreciate big efforts and will from EASME/European Commission to bridge the gap between SMEs and investors. What next? More than half of the companies will continue communication with the identified investors and 6 companies expect a concrete funding agreement within next 12 months Project Pipelining: All investors would welcome a data-pool of investable companies/projects to mine from. Skills development is a must: Majority of participating companies need to build capacity on how to market themselves to customers, investors, commercial partners etc. Technical assistance needed: majority of companies would welcome support in addressing financing and investment requirements to make themselves more investable One-sided focus: According to some investors, many companies focus mainly on technology development and assume that a noble green technology 'walks itself' in the market How the EU funding can help: EU financing is critical for enabling technological demonstration and developing a high TRL. EU funding provides a guarantee of quality for investors. Unsustainable business is high risk. Clear & tangible milestones/deliverables/descriptions required by EU financing instruments from SMEs help mitigate risk. EU to accompany SMEs to green financing: Most of the companies' wishes for the EU funding programmes were towards assisting SMEs to develop their business case (e.g. structure of company vehicle, business plan, marketing plan, contacts with investors, maturing their TRL etc.) Message to SMEs: Step outside your micro-specialised areas of expertise. / Say clearly what you do & do what you say. Make yourselves relevant for the market / Think how you fit in the market & how to develop partnerships across the whole value chain (e.g. supply & commercial agreements, equity partners, strategic industrial partners etc.) Think more circular. Have clear strategy for funding from day 1 => key step on the way to green financing. / Make a plan and prepare well. Prepared SMEs make themselves investable & "available for luck" as one of the participants put it. You need courage to be vulnerable: failure helps to grow and succeed. Being conscious of risks in advance helps to prevent them coming real. Message to policy makers: Evidence-based policy is vital for success of circular economy. EU funding programmes such as LIFE bring evidence forward. LIFE financing instrument plays a crucial role in supporting the move away from a linear economy. EU support for SMEs in bridging gap between innovative ideas and market is vital. Need to help harmonise vocabulary of SMEs and investors to move forward.

7 LIFE as a catalyst of shift from linear to circular economyLIFE finances projects demonstrating viability of circular economy since 1992 (e.g. over 670 waste reduction, recycling, re-use projects totalling to over ~EUR 1 billion of EU funding) LIFE continues supporting circular economy: In the period over EUR 164 million invested by LIFE into waste projects alone; over 165 projects representing an overall investment of more than EUR 430 million Only in-between period over EUR 100 million invested into over 80 circular economy projects. LIFE funding together with national co-financing lead into creation of an economy totalling to over EUR 200 million Further strengthening of LIFE's focus on circular economy foreseen Disclaimer: the quoted figures are approximate, mapping analysis of LIFE and LIFE+ projects ongoing !!! What next? Circular Economy & Business orientation in the ENV&RE/CLIMA in the call / reorientation to close to market projects – intended to fill a gap which appeared at the expiry of the CIP-Eco Innovation programme – while at the same time not excluding other areas in the ENV priority area Sustainability and Replication: LIFE makes a difference to other programmes – this are elements which should be looked at very carefully – we monitor constantly how our projects survive, do they exist after the project period, did they upscale? We look currently into ideas how to support our projects after the LIFE with emphasis also on CE projects

8 Helping our projects access green financingNEEDS Recurrent requests from projects for assistance with access to finance Turning need to demand: companies face need for investments but lack knowledge how to access financing. Technical assistance required: majority of companies would welcome support in addressing financing & investment requirements to make themselves more investable RESPONSE We provide ad-hoc support to projects seeking financing We plan establishing a system to be able to identify and support all promising projects towards market uptake and investments We plan reinforcing the role of LIFE as a catalyst and pre-opener for SMEs on their road towards other financing programmes and instruments In the context of our work of helping close-to-market projects to get closer to possible investments: established contact with the European Investment Advisory Hub, advisory services of the EIB. The Hub created recently but already seeing a lot of demands from SME’s for technical assistance & access to finance. Joint horizontal meeting with EIB Hub representative and the Horizon & COSME colleagues - Presentation to EIB Hub Senior Adviser giving overview of services provided to SME’s through EASME; follow-up discussion how these might be linked to those of the EIB and the Hub Current state of due diligence - FATER GROUP certification of output, being secondary raw materials or products (certification, hygiene aspects) Issues of value chain, primarily the logistics behind inputs (reliable waste streams, agreements/LOIs covering supply volumes) and outputs (markets and how offtakers can on-sell competitively the outputs of the recycling units thus yielding you royalties). Strategy to develop partnerships across the value chain such as strategic industrial equity partners, supply or commercial agreements among others

9 LIFE: Some examples of CE projectsLIFE GREEN SINKS (Italy) Realization of green composite sinks substituting organic and mineral primary materials by recovered waste LIFE12 ENV/IT/000736 Website | Layman ICARRE 95 (France) Industrial Platform Demonstrator to achieve 95% recycling of the "end-of-life vehicle" LIFE10 ENV/FR/000202 From Roof to Road (Denmark) From Roof to Road - Innovative recycling of bitumen felt roofing material LIFE07 ENV/DK/ Website | Layman Usa e Riusa - Use and ... Reuse (Italy) The "processing centre" in the logistics of packaging of fresh fruit and vegetable products LIFE99 ENV/IT/000034 Website | Web summary/Layman

10 THANK YOU FOR YOUR ATTENTION More information on:  Follow LIFE on: @LIFE_Programme   facebook.com/LIFE.programme  flickr.com/life_programme