Commission Delegated Regulation (EU) 2023/2537 of 15 September 2023 amending Delegated Regulation (EU) 2019/856 supplementing Directive 2003/87/EC of the European Parliament and of the Council with regard to the operation of the Innovation Fund

For the purposes of the fifth sentence of the sixteenth subparagraph of Article 10a(8) of Directive 2003/87/EC, the relevant costs shall be the net extra costs that are borne by the project proponent as a result of the application of the innovative technology related to the reduction or avoidance of the greenhouse gas emissions. The net extra costs shall be calculated as the difference between (i) the best estimate of economic costs (covering investment and operation) and economic revenues and operational benefits, and (ii) the best estimate of the economic costs and revenues and operational benefits of a project using a conventional technology with the same capacity in terms of effective production of the analogous final product. The Commission may also decide that the relevant costs shall be the net extra costs, calculated as the difference between the best estimate of (i) the economic costs (covering investment and operation) and (ii) the economic revenues and operational benefits.’

1 The Commission shall, after consulting the Member States in accordance with Article 21(2), point (c), determine the maximum amount of Innovation Fund support available for project development assistance.

2 The Commission may award project development assistance in the form of technical assistance to any project that falls within the scope of the Innovation Fund, as set out in Article 10a(8), first and sixth subparagraphs of Directive 2003/87/EC.

3 The following activities may be funded by way of project development assistance: (a) improvement and development of project documentation or of components of the project design with a view to ensuring the sufficient maturity of the project; (b) assessment of the feasibility of the project, including technical and economic studies; (c) advice on the financial and legal structure of the project; (d) capacity building of the project proponent.

4 If project development assistance is implemented under indirect management, the implementing entity shall carry out the selection procedure and take the decision to award the project development assistance after having consulted the Commission. The award criteria shall take into account the degree of innovation compared to the state of the art, the potential to significantly reduce climate impacts and to support widespread application, the maturity as well as the geographical and sectoral balance in relation to the portfolio of funded projects.’

1 The Commission shall set out the competitive bidding procedure design in accordance with the principles of openness, clarity, transparency and non-discrimination.

2 Competitive bidding procedures shall be designed so as to minimise the risk of speculative bidding.

3 All competitive bidding procedures shall have a maximum budget or volume that acts as a binding constraint. Undersubscribed competitive bidding procedures shall be adapted to restore effective competition in the subsequent competitive bidding procedures.

4 The competitive bidding procedure design shall be published sufficiently in advance of the publication of the call for proposals to enable effective competition.

1 Project proponents shall be invited to apply for a competitive bidding procedure through open calls for proposals launched by the Commission.

2 Before adopting a decision launching a call for proposals, the Commission shall consult the Member States on the draft decision.

3 The Commission decision launching the calls for proposals shall clearly set out the following: (a) the policy objectives pursued by the call; (b) the precise definition and requirements of the low or zero carbon product for which support may be granted; (c) the budget provided by the Innovation Fund; (d) whether a maximum bid price or volume per bid will apply; (e) whether restrictions to cumulation or combination of the support awarded on the basis of a competitive bidding procedure with EU or national support measures will apply; (f) whether criteria other than the bid price will apply in order to rank the proposals; (g) the maximum duration of the support awarded on the basis of the competitive bidding procedure; (h) a description of the application and selection procedures.

1 Only proposals that meet the qualification requirements shall be considered for the ranking procedure set out in Article 13d.

2 Qualification requirements shall aim at ensuring that project proponents participating in the competitive bidding procedure are able to complete the proposed project in accordance with the competitive bidding procedure design, with the terms of the call for proposals and with the objectives in Article 3, and in compliance with EU law.

3 Qualification requirements shall be limited to what is necessary to achieve the objectives of the competitive bidding procedure and to ensure the highest degree of competition and quality of submitted proposals.

4 Qualification requirements may be eligibility, selection, and award criteria within the meaning of the Financial Regulation.

1 Proposals that meet the qualification requirements shall be ranked from the lowest offered price to the highest, unless additional criteria are applied pursuant to paragraph 2.

2 The Commission may decide, exceptionally, to use additional criteria for the ranking of the proposals, provided that the bid price, put in direct relation to the product or objective forming the subject of the competitive bidding procedure, accounts for at least 70 % of the weighting of the ranking criteria. The use of additional criteria shall be clearly set out in the call for proposals and shall be justified by the nature of the auctioned product and the objectives of the call.

3 The implementing body shall draw up the list of pre-selected proposals and communicate it to the Commission. The list shall contain: (a) a confirmation of compliance with the qualification requirements; (b) details on the ranking; (c) the amount of support requested; (d) the projected volume of the auctioned product.

4 At the request of the Commission, the implementing body shall also communicate the ranking of proposals that meet the qualification requirements but whose price is above the clearing price.

5 On the basis of what was communicated pursuant to paragraph 3, the Commission shall, after consulting the Member States in accordance with Article 21(2), adopt the award decision specifying the support to be provided to the selected proposals and, where appropriate, draw up a reserve list.

1 For each competitive bidding procedure, the Commission may decide to restrict the possibility for a project proponent to cumulate the support awarded on the basis of a competitive bidding procedure with EU funding or national public support.

2 Any restrictions adopted pursuant to paragraph 1 shall be limited to what is necessary to ensure a level playing field and to achieve the objectives of the competitive bidding procedure.

3 The scope and rationale of the restrictions referred to in paragraph 1 shall be clearly set out in the draft decision submitted to Member States pursuant to Article 13b(2) as well as in the publication of the competitive bidding procedure design elements referred to in Article 13a(4).

1 The Commission may request deposits, in accordance with Article 10a(8a) of Directive 2003/87/EC, in the form of a financial guarantee, in order to mitigate the risk of speculative bidding or to incentivise project proponents to deliver the proposed project on time and in accordance with their proposal.

2 Retained deposits shall accrue to the Innovation Fund as external assigned revenue pursuant to Article 21(5) of the Financial Regulation.’

1 Member States with the lowest ratio based on the Innovation Fund support received by projects on their territory compared with their share of EU ETS verified emissions in 2013-2020 may be eligible for technical assistance provided by the Commission in accordance with Article 10a(8), fourteenth subparagraph, of the Directive 2003/87/EC.

2 The maximum amount of the Innovation Fund support available for technical assistance as well as the list of Member States eligible for technical assistance shall be determined by the Commission after consulting the Member States in accordance with Article 21(2)(d). The list of eligible Member States shall be updated at least once every two years thereafter.’

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.