Legal provisions of COM(2018)372 - European Regional Development Fund and on the Cohesion Fund

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dossier COM(2018)372 - European Regional Development Fund and on the Cohesion Fund.
document COM(2018)372 EN
date June 24, 2021


TABLE OF CONTENTS

CHAPTER ICOMMON PROVISIONS71

Article 1Subject matter71

Article 2Tasks of the ERDF and the Cohesion Fund71

Article 3Specific objectives for the ERDF and the Cohesion Fund71

Article 4Thematic concentration of ERDF support73

Article 5Scope of support from the ERDF75

Article 6Scope of support from the Cohesion Fund76

Article 7Exclusion from the scope of the ERDF and the Cohesion Fund76

Article 8Indicators78

CHAPTER IISPECIFIC PROVISIONS ON TREATMENT OF PARTICULAR TERRITORIAL FEATURES AND INTERREGIONAL INNOVATION INVESTMENTS78

Article 9Integrated territorial development78

Article 10Support for disadvantaged areas78

Article 11Sustainable urban development79

Article 12European Urban Initiative79

Article 13Interregional Innovation Investments80

Article 14Outermost regions80

CHAPTER IIITRANSITIONAL AND FINAL PROVISIONS81

Article 15Transitional provisions81

Article 16Exercise of the delegation81

Article 17Review82

Article 18Entry into force82

ANNEX ICOMMON OUTPUT AND RESULT INDICATORS FOR ERDF AND THE COHESION FUND – ARTICLE 8(1)83

ANNEX IICORE SET OF PERFORMANCE INDICATORS FOR ERDF AND COHESION FUND REFERRED TO IN ARTICLE 8(3) , To Be Used BY THE COMMISSION IN COMPLIANCE WITH ITS REPORTING REQUIREMENT PURSUANT TO POINT (H)(iii) Of ARTICLE 41(3) OF THE FINANCIAL REGULATION91

Contents

CHAPTER I - COMMON PROVISIONS


Article 1

Subject matter

1. This Regulation sets out the specific objectives and the scope of support from the European Regional Development Fund (ERDF) with regard to the Investment for jobs and growth goal and the European territorial cooperation goal (Interreg) referred to in Article 5(2) of Regulation (EU) 2021/1060.

2. This Regulation also sets out the specific objectives and the scope of support from the Cohesion Fund with regard to the Investment for jobs and growth goal referred to in point (a) of Article 5(2) of Regulation (EU) 2021/1060.

Article 2

Tasks of the ERDF and the Cohesion Fund

1. The ERDF and the Cohesion Fund shall contribute to the overall objective of strengthening the economic, social and territorial cohesion of the Union.

2. The ERDF shall contribute to reducing disparities between the levels of development of the various regions within the Union, and to reducing the backwardness of the least favoured regions through participation in the structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions, including by promoting sustainable development and addressing environmental challenges.

3. The Cohesion Fund shall contribute to projects in the field of environment and trans-European networks in the area of transport infrastructure (TEN-T).

Article 3

Specific objectives for the ERDF and the Cohesion Fund

1. In accordance with the policy objectives set out in Article 5(1) of Regulation (EU) 2021/1060, the ERDF shall support the following specific objectives:

(a)a more competitive and smarter Europe by promoting innovative and smart economic transformation and regional ICT connectivity (PO 1) by:

(i)developing and enhancing research and innovation capacities and the uptake of advanced technologies;

(ii)reaping the benefits of digitisation for citizens, companies, research organisations and public authorities;

(iii)enhancing sustainable growth and competitiveness of SMEs and job creation in SMEs, including by productive investments;

(iv)developing skills for smart specialisation, industrial transition and entrepreneurship;

(v)enhancing digital connectivity;

(b)a greener, low-carbon transitioning towards a net zero carbon economy and resilient Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility (PO 2) by:

(i)promoting energy efficiency and reducing greenhouse gas emissions;

(ii)promoting renewable energy in accordance with Directive (EU) 2018/2001, including the sustainability criteria set out therein;

(iii)developing smart energy systems, grids and storage outside the Trans-European Energy Network (TEN-E);

(iv)promoting climate change adaptation and disaster risk prevention and resilience, taking into account eco-system based approaches;

(v)promoting access to water and sustainable water management;

(vi)promoting the transition to a circular and resource efficient economy;

(vii)enhancing protection and preservation of nature, biodiversity and green infrastructure, including in urban areas, and reducing all forms of pollution;

(viii)promoting sustainable multimodal urban mobility, as part of transition to a net zero carbon economy;

(c)a more connected Europe by enhancing mobility (PO 3) by:

(i)developing a climate resilient, intelligent, secure, sustainable and intermodal TEN-T;

(ii)developing and enhancing sustainable, climate resilient, intelligent and intermodal national, regional and local mobility, including improved access to TEN-T and cross-border mobility;

(d)a more social and inclusive Europe implementing the European Pillar of Social Rights (PO 4) by:

(i)enhancing the effectiveness and inclusiveness of labour markets and access to quality employment through developing social infrastructure and promoting social economy;

(ii)improving equal access to inclusive and quality services in education, training and lifelong learning through developing accessible infrastructure, including by fostering resilience for distance and on-line education and training;

(iii)promoting the socioeconomic inclusion of marginalised communities, low income households and disadvantaged groups, including people with special needs, through integrated actions, including housing and social services;

(iv)promoting the socio-economic integration of third country nationals, including migrants through integrated actions, including housing and social services;

(v)ensuring equal access to health care and fostering resilience of health systems, including primary care, and promoting the transition from institutional to family-based and community-based care;

(vi)enhancing the role of culture and sustainable tourism in economic development, social inclusion and social innovation;

(e)a Europe closer to citizens by fostering the sustainable and integrated development of all types of territories and local initiatives (PO 5) by:

(i)fostering the integrated and inclusive social, economic and environmental development, culture, natural heritage, sustainable tourism and security in urban areas;

(ii)fostering the integrated and inclusive social, economic and environmental local development, culture, natural heritage, sustainable tourism and security in areas other than urban areas.

Support under PO5 shall be provided through territorial and local development strategies, through the forms set out in points (a), (b) and (c) of Article 28 of Regulation (EU) 2021/1060.

2. Under the two specific objectives of point (e) of paragraph 1, Member States may also support operations which can be funded under the specific objectives set out under points (a) to (d) of that paragraph.

3. The Cohesion Fund shall support PO 2 and 3.

4. Within the specific objectives set out in paragraph 1, the ERDF or the Cohesion Fund, as appropriate, may also support activities under the Investment for jobs and growth goal, where they:

(a)improve the capacity of programme authorities;

(b)improve the capacity of sectoral or territorial actors responsible for carrying out activities relevant to the implementation of the ERDF and the Cohesion Fund, provided that it contributes to the objectives of the programme; or

(c)enhance cooperation with partners both within and outside a given Member State.

Cooperation referred to in point (c) shall include cooperation with partners from cross-border regions, from non-contiguous regions or from regions located in the territory covered by a European Grouping of Territorial Cooperation, a macro-regional or sea-basin strategy or a combination thereof.

Article 4

Thematic concentration of ERDF support

1. With regard to programmes implemented under the Investment for jobs and growth goal, the total ERDF resources, other than for technical assistance, in each Member State shall be concentrated at national level or at the level of category of region in accordance with paragraphs 3 to 9.

2. With regard to the thematic concentration of support for Member States comprising outermost regions, the ERDF resources allocated specifically to programmes for the outermost regions and those allocated to all other regions shall be treated separately.

3. Member States may decide to comply with thematic concentration at national level or at the level of category of region. Each Member State shall indicate its choice in its Partnership Agreement referred to in Article 10 of Regulation (EU) 2021/1060. That choice shall apply to the total of that Member State’s ERDF resources referred to in paragraph 1 of this Article for the entire programming period.

4. For the purposes of a thematic concentration at national level, Member States shall be classified, in terms of their gross national income ratio, as follows:

(a)those with a gross national income ratio equal to or above 100 % of the EU average (‘group 1’);

(b)those with a gross national income ratio equal to or above 75 % and below 100 % of the EU average (‘group 2’);

(c)those with a gross national income ratio below 75 % of the EU average (‘group 3’).

For the purposes of this Article, the gross national income ratio means the ratio between the gross national income per capita of a Member State, measured in purchasing power standards and calculated on the basis of Union figures for the period from 2015 to 2017, and the average gross national income per capita in purchasing power standards of the 27 Member States for that same reference period.

With regard to programmes under the Investment for jobs and growth goal for the outermost regions, they shall be classified as falling within group 3.

With regard to programmes under the Investment for jobs and growth goal for island Member States which receive support from the Cohesion Fund, they shall be classified as falling within group 3.

5. For the purposes of a thematic concentration at the level of category of region, regions shall be classified by categories of region in accordance with Article 108(2) of Regulation (EU) 2021/1060, as:

(a)more developed regions;

(b)transition regions;

(c)less developed regions.

6. Member States shall comply at national level with the following thematic concentration requirements:

(a)Member States of group 1 or more developed regions shall allocate at least 85 % of their ERDF resources referred to in paragraph 1 to PO 1 and PO 2, and at least 30 % to PO 2;

(b)Member States of group 2 or transition regions shall allocate at least 40 % of their ERDF resources referred to in paragraph 1 to PO 1, and at least 30 % to PO 2;

(c)Member States of group 3 or less developed regions shall allocate at least 25 % of their ERDF resources referred to in paragraph 1 to PO 1, and at least 30 % to PO 2.

Where a Member State decides to comply with thematic concentration requirements at the level of category of regions, the thresholds set out in the first subparagraph of this paragraph shall apply to the ERDF resources referred to in paragraph 1 aggregated together for all regions falling in the respective category of region.

7. Where a Member State allocates to PO 2 more than 50 % of its total Cohesion Fund resources other than for technical assistance as calculated after the transfer set out in Article 110(4) of Regulation (EU) 2021/1060, excluding resources under the specific objective referred to in point (b)(viii) of the first subparagraph of Article 3(1) of this Regulation, the allocation exceeding the 50 % may be taken into account when calculating the compliance with the thematic concentration requirements set out in paragraph 6 of this Article.

If a Member State decides to comply with thematic concentration at the level of category of regions, the Cohesion Fund resources that are taken into account for thematic concentration requirements in accordance with the first subparagraph shall be allocated pro rata to the different categories of regions based on their relative share of the total population of the Member State concerned.

Member States shall set out in their Partnership Agreement referred to in Article 10 of Regulation (EU) 2021/1060 whether the Cohesion Fund resources will be taken into account for thematic concentration requirements for PO 2.

8. The resources under the specific objective referred to in point (a)(v) of the first subparagraph of Article 3(1) shall be programmed under a dedicated priority.

By way of derogation from paragraph 6, 40 % of such resources shall be taken into account when calculating compliance with the thematic concentration requirements for PO1 set out in paragraph 6.

The resources taken into account for thematic concentration requirements in accordance with the second subparagraph of this paragraph shall not exceed 40 % of the minimum thematic concentration requirements for PO 1 set out in paragraph 6.

9. The resources under the specific objective referred to in point (b)(viii) of the first subparagraph of Article 3(1) shall be programmed under a dedicated priority.

By way of derogation from paragraph 6, 50 % of such ERDF resources shall be taken into account when calculating compliance with the thematic concentration requirements for PO 2 set out in paragraph 6.

The resources taken into account for thematic concentration requirements in accordance with the second subparagraph of this paragraph shall not exceed 50 % of the minimum thematic concentration requirements for PO 2 set out in paragraph 6.

10. The thematic concentration requirements set out in paragraph 6 of this Article shall be complied with throughout the entire programming period, including when ERDF allocations are transferred between priorities of a programme or between programmes and at the mid-term review in accordance with Article 18 of Regulation (EU) 2021/1060.

11. Where the ERDF allocation with regard to PO 1 or PO 2, or both, of a given programme is reduced following a decommitment under Article 105 of Regulation (EU) 2021/1060, or due to financial corrections by the Commission in accordance with Article 104 of that Regulation, compliance with the thematic concentration requirements set out in paragraph 6 of this Article shall not be re-assessed.

12. This Article shall not apply to the additional funding for northern sparsely populated regions referred to in point (e) of Article 110(1) of Regulation (EU) 2021/1060.

Article 5

Scope of support from the ERDF

1. The ERDF shall support the following:

(a)investments in infrastructure;

(b)activities for applied research and innovation, including industrial research, experimental development and feasibility studies;

(c)investments in access to services;

(d)productive investments in SMEs and investments aiming at safeguarding existing jobs and creating new jobs;

(e)equipment, software and intangible assets;

(f)networking, cooperation, exchange of experience and activities involving innovation clusters including between businesses, research organisations and public authorities;

(g)information, communication and studies; and

(h)technical assistance.

2. Productive investments in enterprises other than SMEs may be supported:

(a)when they involve cooperation with SMEs in research and innovation activities supported under point (a)(i) of the first subparagraph of Article 3(1);

(b)when primarily supporting energy efficiency measures and renewable energy under points (b)(i) and (b)(ii) of the first subparagraph of Article 3(1);

(c)when they are made in small mid-cap and mid-cap companies as defined in points (6) and (7) of Article 2 of Regulation (EU) 2015/1017 of the European Parliament and the Council (21) through financial instruments; or

(d)when they are made in small mid-cap companies in research and innovation activities supported under point (a)(i) of the first subparagraph of Article 3(1).

3. In order to contribute to the specific objective under PO 1 set out in point (a)(iv) of the first subparagraph of Article 3(1), the ERDF shall also support training, life-long learning, reskilling and education activities.

4. In order to contribute to the specific objective under PO 2 set out in point (b)(iv) of the first subparagraph of Article 3(1) and to the specific objective under PO 4 set out in point (d)(v) of that subparagraph, the ERDF shall also support the purchase of supplies necessary for strengthening the resilience of health systems and for strengthening disaster resilience.

5. Under Interreg, the ERDF may also support:

(a)sharing of facilities and of human resources; and

(b)accompanying soft investments and other activities linked to PO 4 under the European Social Fund Plus as set out in Regulation (EU) 2021/1057.

6. The ERDF may support the financing of working capital in SMEs in the form of grants, where strictly necessary as a temporary measure to respond to exceptional or unusual circumstances referred to in Article 20 of Regulation (EU) 2021/1060.

7. Where, upon a request submitted by the Member States concerned, the Commission finds that the requirements laid down in paragraph 6 are fulfilled, it shall adopt an implementing decision specifying the period during which the temporary additional support from ERDF is authorised.

8. The Commission shall keep the European Parliament and the Council informed about the implementation of paragraph 6 and assess whether the temporary additional support from the ERDF is sufficient to facilitate the use of the fund in response to the exceptional or unusual circumstances. On the basis of its assessment, the Commission shall, where deemed appropriate, make proposals for amendments to this Regulation, including on thematic concentration requirements in Article 4.

9. The European Parliament or the Council may invite the Commission for a structured dialogue on the application of paragraphs 6, 7 and 8 of this Article in accordance with Article 20(3) of Regulation (EU) 2021/1060.

Article 6

Scope of support from the Cohesion Fund

1. The Cohesion Fund shall support the following:

(a)investments in the environment, including investments related to sustainable development and energy presenting environmental benefits, with a particular focus on renewable energy;

(b)investments in TEN-T;

(c)technical assistance;

(d)information, communication, and studies.

Member States shall ensure an appropriate balance between investments under points (a) and (b), based on the investment and infrastructure needs specific to each Member State.

2. The amount of the Cohesion Fund transferred to the Connecting Europe Facility shall be used for TEN-T projects.

Article 7

Exclusion from the scope of the ERDF and the Cohesion Fund

1. The ERDF and the Cohesion Fund shall not support:

(a)the decommissioning or the construction of nuclear power stations;

(b)investment to achieve the reduction of greenhouse gas emissions from activities listed in Annex I to Directive 2003/87/EC;

(c)the manufacturing, processing and marketing of tobacco and tobacco products;

(d)an undertaking in difficulty, as defined in point (18) of Article 2 of Regulation (EU) No 651/2014, unless authorised under de minimis aid or temporary State aid rules established to address exceptional circumstances;

(e)investment in airport infrastructure, except for outermost regions or in existing regional airports as defined in point (153) of Article 2 of Regulation (EU) No 651/2014, in any of the following cases:

(i)in environmental impact mitigation measures; or

(ii)in security, safety, and air traffic management systems resulting from Single European Sky ATM Research;

(f)investment in disposal of waste in landfill, except:

(i)for the outermost regions, in duly justified cases only; or

(ii)for investments for decommissioning, reconverting or making safe existing landfills provided that such investments do not increase their capacity;

(g)investment increasing the capacity of facilities for the treatment of residual waste, except for:

(i)the outermost regions in duly justified cases only;

(ii)investment in technologies to recover materials from residual waste for circular economy purposes;

(h)investment related to production, processing, transport, distribution, storage or combustion of fossil fuels, with the exception of:

(i)the replacement of solid fossil fuels fired, namely coal, peat, lignite, oil-shale, heating systems with gas-fired heating systems for the purpose of:

—upgrading district heating and cooling systems to the status of ‘efficient district heating and cooling’ as defined in point (41) of Article 2 of Directive 2012/27/EU;

—upgrading combined heat and power installations to the status of ‘high-efficiency co-generation’ as defined in point (34) of Article 2 of Directive 2012/27/EU;

—investment in natural gas-fired boilers and heating systems in housing and buildings replacing coal-, peat-, lignite- or oil shale-based installations;

(ii)investment in the expansion and repurposing, conversion or retrofitting of gas transmission and distribution networks provided that such investment makes the networks ready for adding renewable and low carbon gases, such as hydrogen, biomethane and synthesis gas, into the system and allows to substitute solid fossil fuels installations;

(iii)investment in:

—clean vehicles as defined in Directive 2009/33/EC of the European Parliament and of the Council (22) for public purposes; and

—vehicles, aircraft and vessels designed and constructed or adapted for use by civil protection and fire services.

2. The total amount of Union support for Union investment referred to in points (h)(i) and (h)(ii) of paragraph 1 shall not exceed the following limits of the total programmes allocation from the ERDF and the Cohesion Fund under the Investment for jobs and growth goal for the Member State concerned:

(a)for Member States whose gross national income (GNI) per capita is below 60 % of the EU average GNI per capita, or for Member States whose GNI per capita is below 90 % of the EU average GNI per capita and which have a share of solid fossil fuels in gross inland energy consumption equal to or above 25 %, the limit shall be 1,55 %;

(b)for Member States other than those in point (a) whose GNI per capita is below 90 % of the EU average GNI per capita, the limit shall be 1 %;

(c)for Member States whose GNI per capita is equal to or above 90 % of the EU average GNI per capita, the limit shall be 0,2 %.

3. For the purposes of this Article, the gross national income per capita of a given Member State shall be measured in purchasing power standards and calculated on the basis of Union figures for the period from 2015 to 2017, and expressed as a percentage of the national income per capita in purchasing power standards of the 27 Member States for that same reference period.

For the purposes of this Article, the share of solid fossil fuels in energy consumption means the share of coal, lignite, peat and oil shale measured in 2018.

4. Operations supported by the ERDF and the Cohesion Fund under points (h)(i) and (h)(ii) of paragraph 1 shall be selected by the managing authority by 31 December 2025. Such operations shall not be phased to the next programming period.

5. The Cohesion Fund shall not support investment in housing unless related to the promotion of energy efficiency or renewable energy use.

6. Overseas countries and territories shall not be eligible for support from the ERDF or the Cohesion Fund, but may participate in Interreg programmes in accordance with the conditions set out in Regulation (EU) 2021/1059 of the European Parliament and of the Council (23).

Article 8

Indicators

1. Common output and result indicators, as set out in Annex I with regard to the ERDF and to the Cohesion Fund, and, where relevant, programme-specific output and result indicators shall be used in accordance with point (a) of the second subparagraph of Article 16(1), point (d)(ii) of Article 22(3) and point (b) of Article 42(2), of Regulation (EU) 2021/1060.

2. For output indicators, baselines shall be set at zero. The milestones set for 2024 and targets set for 2029 shall be cumulative.

3. In compliance with its reporting requirement pursuant to point (h) of Article 41(3) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (24) (the ‘Financial Regulation’), the Commission shall present to the European Parliament and to the Council information on performance in accordance with Annex II.

4. The Commission is empowered to adopt delegated acts in accordance with Article 16 to amend Annex II in order to make the relevant adjustments to the information on performance to be provided to the European Parliament and to the Council.

5. The Commission shall assess how the strategic importance of the investments co-financed by the ERDF and the Cohesion Fund is taken into account in the context of the implementation of the Stability and Growth Pact and submit a report to the European Parliament and to the Council.

CHAPTER II - SPECIFIC PROVISIONS ON THE TREATMENT OF PARTICULAR TERRITORIAL FEATURES AND INTERREGIONAL INNOVATION INVESTMENTS


Article 9

Integrated territorial development

1. The ERDF may support integrated territorial development within programmes under both goals referred to in Article 5(2) of Regulation (EU) 2021/1060 in accordance with Chapter II of Title III of that Regulation.

2. Member States shall implement integrated territorial development, supported by the ERDF, exclusively through the forms referred to in Article 28 of Regulation (EU) 2021/1060.

Article 10

Support for disadvantaged areas

In accordance with Article 174 TFEU, the ERDF shall pay special attention to addressing the challenges of disadvantaged regions and areas, in particular rural areas and areas which suffer from severe and permanent natural or demographic handicaps. Member States shall, where appropriate, set out an integrated approach to addressing demographic challenges or specific needs of such regions and areas in their partnership agreements in accordance with point (i) of the first subparagraph of Article 11 of Regulation (EU) 2021/1060. Such an integrated approach may include a commitment on dedicated funding for that purpose.

Article 11

Sustainable urban development

1. To address economic, environmental, climate, demographic and social challenges, the ERDF shall support integrated territorial development based on territorial or community-led local development strategies in accordance with Article 29 or 32 of Regulation (EU) 2021/1060, respectively, that are focused on urban areas, including functional urban areas (‘sustainable urban development’) within programmes under both goals referred to in Article 5(2) of that Regulation.

Special attention shall be given to tackling environmental and climate challenges, in particular the transition towards a climate-neutral economy by 2050, to harnessing the potential of digital technologies for innovation purposes, and to support the development of functional urban areas. In this context, sustainable urban development resources programmed under priorities corresponding to PO 1 and 2 shall count towards the thematic concentration requirements under Article 4.

2. At least 8 % of the ERDF resources at national level under the Investment for jobs and growth goal, other than for technical assistance, shall be allocated to sustainable urban development in one or more of the forms referred to in Article 28 of Regulation (EU) 2021/1060.

The relevant territorial authorities or bodies shall select or shall be involved in the selection of operations in accordance with Article 29(3) and point (d) of Article 32(3) of Regulation (EU) 2021/1060.

The programmes concerned shall set out the planned amounts for that purpose under point (d)(viii) of Article 22(3) of Regulation (EU) 2021/1060.

3. The percentage allocated to sustainable urban development under paragraph 2 of this Article shall be complied with throughout the entire programming period when ERDF allocations are transferred between priorities of a programme or between programmes, including at the mid-term review in accordance with Article 18 of Regulation (EU) 2021/1060.

4. Where the ERDF allocation is reduced following a decommitment under Article 105 of Regulation (EU) 2021/1060, or due to financial corrections by the Commission in accordance with Article 104 of that Regulation, compliance with paragraph 2 of this Article shall not be re-assessed.

Article 12

European Urban Initiative

1. The ERDF shall support the European Urban Initiative, implemented by the Commission in direct and indirect management.

This initiative shall cover all urban areas, including functional urban areas, and shall support the Urban Agenda for the EU, including support for the participation of local authorities in the thematic partnerships developed under the Urban Agenda for the EU.

2. The European Urban Initiative shall, with regard to sustainable urban development, consist of the following two strands:

(a)support of innovative actions;

(b)support of capacity and knowledge building, territorial impact assessments, policy development and communication.

Upon the request of one or more Member States, the European Urban Initiative may also support inter-governmental cooperation on urban matters. Particular attention should be given to cooperation aimed at capacity building at local level to achieve UN Sustainable Development Goals.

The Commission shall submit a report every two years to the European Parliament and to the Council on developments in connection with the European Urban Initiative.

3. The governance model of the European Urban Initiative shall include the involvement of Member States, regional and local authorities and cities and shall ensure appropriate coordination and complementarities with the dedicated programme under point (b) of Article 3(3) of Regulation (EU) 2021/1059 dealing with sustainable urban development.

Article 13

Interregional Innovation Investments

1. The ERDF shall support the Interregional Innovation Investments Instrument.

2. The Interregional Innovation Investments Instrument shall support the commercialisation and scaling up of interregional innovation projects having the potential to encourage the development of European value chains.

3. The Interregional Innovation Investments Instrument shall consist of the following two strands, supporting equally:

(a)financial and advisory support for investments in interregional innovation projects in shared smart specialisation areas;

(b)financial and advisory support, and capacity building for the development of value chains in less developed regions.

4. Up to 2 % of the resources may be dedicated to learning and evaluation activities, in order to capitalise on and disseminate the outcome of projects supported under the two strands.

5. The Commission shall implement those investments under direct or indirect management.

6. The Commission shall be supported in its work by a group of experts.

The expert group shall be composed of representatives from Member States, regional authorities and cities, and representatives of business, research and civil society organisations. The composition of the expert group shall aim to ensure gender balance.

The expert group shall support the Commission in defining a long-term work programme and in preparing calls for proposals.

7. When implementing this instrument, the Commission shall ensure coordination and synergy with other Union funding programmes and instruments and in particular with strand ‘Interreg C’ as defined in point 3 of Article 3 of Regulation (EU) 2021/1059.

8. The Interregional Innovation Investments Instrument shall cover the entire territory of the Union.

Third countries can participate in this instrument, in accordance with the arrangements laid down in Articles 16 and 23 of Regulation (EU) 2021/695 of the European Parliament and of the Council (25) (the ‘Horizon Europe Regulation’).

Article 14

Outermost regions

1. Article 4 shall not apply to the specific additional allocation for the outermost regions. This specific additional allocation for the outermost regions shall be used to offset the additional costs incurred in these regions as a result of one or several of the permanent restraints to their development referred to in Article 349 TFEU.

2. The allocation referred to in paragraph 1 of this Article shall support:

(a)the activities within the scope as set out in Article 5 of this Regulation;

(b)by way of derogation from Article 5 of this Regulation, measures covering operating costs with a view to offsetting the additional costs incurred in the outermost regions as a result of one or several of the permanent restraints to their development referred to in Article 349 TFEU.

The allocation referred to in paragraph 1 of this Article may also support expenditure covering compensation granted for the provision of public service obligations and contracts in the outermost regions.

3. The allocation, referred to in paragraph 1 of this Article, shall not support:

(a)operations involving products listed in Annex I to the TFEU;

(b)aid for the transport of persons authorised under point (a) of Article 107(2) TFEU;

(c)tax exemptions and exemption of social charges;

(d)public services obligations not discharged by undertakings and where the State acts by exercising public power.

4. By way of derogation from point (c) of Article 5(1), the ERDF may support productive investments in enterprises in the outermost regions, irrespective of the size of those enterprises.

CHAPTER III - TRANSITIONAL AND FINAL PROVISIONS


Article 15

Transitional provisions

Regulations (EU) No 1300/2013 and (EU) No 1301/2013 or any act adopted thereunder shall continue to apply to programmes and operations supported by the ERDF or the Cohesion Fund under the 2014-2020 programming period.

Article 16

Exercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2. The power to adopt delegated acts referred to in Article 8(4) shall be conferred on the Commission for an indeterminate period of time from 1 July 2021.

3. The delegation of power referred to in Article 8(4) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.

5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

6. A delegated act adopted pursuant to Article 8(4) shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

Article 17

Review

The European Parliament and the Council shall review this Regulation by 31 December 2027, in accordance with Article 177 TFEU.

Article 18

Entry into force

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

This Regulation shall be binding in its entirety and directly applicable in all Member States.