Explanatory Memorandum to COM(2018)445 - Amendment of Decision 2007/198/Euratom establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it - Main contents
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| dossier | COM(2018)445 - Amendment of Decision 2007/198/Euratom establishing the European Joint Undertaking for ITER and the Development of Fusion ... |
|---|---|
| source | COM(2018)445  |
| date | 07-06-2018 |
1. CONTEXT OF THE PROPOSAL
This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.
Fusion is expected to play an important role in Europe's future energy landscape as a virtually inexhaustible climate-friendly energy source. This proposal for a Council Decision seeks to secure funding for continued European participation in the ITER project aiming at key scientific breakthroughs in the development of fusion. It is particularly important following the 2015 Paris Agreement on climate change and the EU commitement to lead the way in decarbonising the economy and tackling climate change in a cost effective manner.
European participation in ITER is based on the ITER Agreement signed in November 2006 between seven global partners, Euratom, the United States, the Russian Federation, Japan, China, South Korea and India. ITER represents a unique first-of-a-kind project developed through international scientific collaboration which allows for the synergies and mobilisation of financial resources that would not be possible for a single state.
As the Host Party of the project according to the ITER Agreement, Europe has a stronger legal commitment under the ITER Agreement and accordingly has taken the lead in this project with a 45% share of the construction costs 1 (the other ITER Members' shares are around 9% each) to ensure timely completion of the construction. This proposal for a Council Decision amends the Council Decision (2007/198/Euratom) of 27 March 2007 establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it to provide the basis for the financing of the activities of this Joint Undertaking (hereinafter 'Fusion for Energy') for the period 2021-2027 under the Euratom Treaty.
The 2007 Council Decision had already been amended by the Council Decision 2013/791/Euratom of 13 December 2013 to allow a financing of the Fusion for Energy activities. This proposal, which follows the same logic, is based on Article 47 of the Euratom Treaty and refers to the participation of Euratom in the financing of the Joint Undertaking during the Multi-annual Financial Framework 2021-2027.
The presently proposed amendment allows securing the financing of the project for the next Multiannual Financial Framework while it does not prevent voluntary contributions from Members of the Joint Undertaking other than Euratom as provided for in Article 12(1)(c) of the Statutes of that Undertaking.
The ITER Council endorsed in 2016 an updated schedule and associated cost estimates for the completion of the ITER construction. The new schedule targets the achievement of First Plasma in December 2025, as the earliest technically achievable date for the ITER construction, with the full performance operation, using deuterium-tritium fuel (the so-called Deuterium-Tritium phase) estimated in 2035. This schedule, together with the associated revised costs 2 , form the basis of the new baseline of the ITER project; it does not include contingencies and therefore assumes that all major risks can be mitigated.
In its Communication to the European Parliament and the Council of the EU “EU contribution to a reformed ITER Project” 3 of 14 June 2017 and its accompanying Staff Working Document the Commission presented estimates of cost for the construction phase (for Europe only). For the period 2021-2027 the amount from EU budget 4 , including the Commission’s administrative expenditure related to the Fusion for Energy tasks and any other relevant activities, was 5 estimated at about EUR 6.1 billion (in current value) 6 .
On 12 April 2018 the Council of the EU drew conclusions on the basis of the Communication from the Commission and reaffirmed the continued commitment of Euratom to the successful completion of the ITER project. The Council declared that it will endeavour to make available the resources for the Fusion for Energy activities within the limits of the Multiannual Financial Framework for the period 2021-2027. On this basis the Council mandated the Commission to approve the new ITER project baseline (scope, schedule and costs) on behalf of Euratom at an ITER Council meeting at Ministerial level.
The transfer of funds will be aligned with the period covered by the Multiannual Financial Framework and run for seven years. According to the ITER Agreement, the ITER project will have an initial duration of 35 years (i.e. until 2042); thus, subsequent Council decisions will be needed to continue to fund the Euratom contribution to this project.
The successful construction and operation of ITER is on the critical path of the European fusion roadmap which represents a comprehensive goal-oriented path to fusion electricity and has been endorsed by all fusion research stakeholders in Europe 7 . This Decision will accordingly facilitate synergies and complementarities with fusion research activities funded under the Euratom Research and Training Programme 2021-2025 8 . This Decision will also allow completing the activities carried out in the frame of the Broader Approach Agreement concluded between Euratom and Japan and complementing the international collaboration in the framework of the ITER Agreement.
The proposal has been prepared in order to ensure close interactions with other programmes, namely the EU FP9 and the Euratom FP9 proposals. The rationale is quite clear as ITER is a first of a kind innovative project in the energy area that needs close support from the research and innovation side, conducted in particular through Euratom research programmes, but also through the EU research programmmes. In this respect the texts of both programmes (Euratom and EU FP9) under the next MFF have been reinforced to ensure that the necessary interactions related to ITER are clearly stated.
2. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
This proposal takes full account of the responses to the Multiannual Financial Framework open public consultation that was organised under the coordination of the Secretariat General of the European Commission and was launched on 10 January and run until 8 March 2018. Furthermore, the proposal takes full account of consultations with stakeholders undertaken in the course of the preparatory activities which included an ex-ante evaluation and stakeholder events and surveys. While the open public consultations did not raise particular issues regarding the continuation of ITER funding, focused stakeholder consultations have confirmed that the EU investment in the construction of ITER is bringing important benefits to European industry and the research community. This was reiterated during an industry event organised in December 2017 which demonstrated that fusion is already delivering concrete opportunities for industry and is having a positive effect on jobs, economic growth and innovation, with positive impact beyond the fusion and energy fields. Independent studies commissioned for the preparation of the ex-ante evaluation provided quantifications of jobs created and net value added generated by European participation in the ITER project.
Last but not least, taking into account the Council conclusions of April 2018, this proposal will provide continuity for the project, in particular vis-à-vis the international partners and secure the ITER funding for the whole duration of the next Multiannual Financial Framework.
A limited number of proposals have been identified that, due to their continuity in terms of content and structure and/or size of the budget, should have an ex-ante assessment in the form of a Staff Working Document instead of an impact assessment. ITER was indicated, alongside other programmes such as Fiscalis, Humanitarian Aid, Common Foreign and Security Policy, as not requiring an impact assessment but rather an ex ante evaluation in the form of a Staff Working Document, in line with the requirements of the EU Financial Regulation.
This proposal provides for a date of application as of 1 January 2021 and are presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.
3. LEGAL ELEMENTS OF THE PROPOSAL
The legal basis for this Council Decision is provided for by Article 47 of the Euratom Treaty. This Decision shall constitute the basic act for the period covered by the next Multiannual Financial Framework and will be the basis for the adoption of the yearly financing decisions by the Commission. These decisions will allow the Commission to transfer the funds to Fusion for Energy during the period 2021-2027.
This Decision shall also covers the administrative expenditure of the Commission related to Fusion for Energy, the ITER Organization, the Broader Approach and any other relevant activities for the period 2021-2027.
4. BUDGETARY IMPLICATION
The legislative financial statement attached to this proposal for a Council Decision sets out the budgetary implications and the human and administrative resources needed for its implementation.
5. IMPLEMENTATION PLANS AND MONITORING AND EVALUATION AND REPORTING ARRANGEMENTS
It is intended to continue implementing the budget for European participation in ITER through the use of a joint Undertaking. The establishment of a Joint Undertaking under Chapter 5 of the Euratom Treaty was considered in 2007 as the most appropriate solution to discharge the Euratom obligations towards the ITER Organization pursuant to the conclusion of the ITER Agreement by Euratom. This adequacy has been confirmed by several independent reviews and assessments since then.
Pursuant to Article 32 of its Financial Regulation the Joint Undertaking (F4E) draws up a programming document containing multi-annual and annual programming. The draft-programming document is sent to the F4E Governing Board, the Commission, the European Parliament and the Council no later than 31 January each year. The Commission sends the opinion of its relevant services on this document to F4E.
The overall planning and annual Work Programme of the Joint Undertaking (F4E) specify the timetable for the achievement of the milestones which cover the procurement activities during ITER construction. F4E regularly reports to its governance body (the Governing Board where Euratom is represented by the Commission) and to the Council of the EU on the project's progress.
A full series of key performance indicators dedicated to the specific monitoring of the schedule and cost performance have been introduced in 2017 to better monitor the progress and the efficiency of F4E in delivering the Euratom contribution to the ITER project. A dash board report based on these indicators is submitted regularly to the Governing Board. They include metrics based on an Earned Value Management system.
At the level of the overall ITER project, the ITER Organization reports to the ITER Council on a similar dashboard of performance indicators, including the percentage of the physical completion of the construction to First Plasma. In December 2017, this indicator reached 50% and should reach 100% at the achievement of First Plasma foreseen for December 2025.
In the context of the Commission's internal management planning and monitoring, it is proposed to use two indicators that should report on progress of the project towards the achievement of its general and specific objectives. The first indicator would be the “percentage of completion of ITER construction” and the second the “percentage of Euratom’s in kind obligations discharged by F4E”. Both indicators will be based on data reported by the ITER Organization.
The Commission proposal for the 2021-2027 Multiannual Financial Framework set a more ambitious goal for climate mainstreaming across all EU programmes, with an overall target of 25% of EU expenditure contributing to climate objectives. The contribution of this programme to the achievement of this overall target will be tracked through an EU climate marker system at an appropriate level of disaggregation, including the use of more precise methodologies where these are available. The Commission will continue to present the information annually in terms of commitment appropriations in the context of the annual draft budget.
To support the full utilisation of the potential of ITER to contribute to climate objectives, the Commission will seek to identify relevant actions throughout the expenditure preparation, implementation, review and evaluation processes.
The Commission will carry out interim and ex post evaluations and will communicate the conclusions to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. The evaluation will be carried out in line with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 9 , where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action. The evaluation will assess the effects of ITER based on the established indicators/targets and a detailed analysis of the degree to which the project has proven relevant, effective, efficient, provides enough EU added value and is coherent with other EU policies. The evaluation will include lessons learnt to identify any lacks/problems or any potential to further improve the actions or their results and to help maximise their exploitation/impact. If the ex post evaluation is carried out close to the interim evaluation of the following period, both evaluations can be combined in as single one that will cover a larger period.
In addition, pursuant to Article 14 of its statutes F4E drafts an annual report. This report records the implementation of the F4E work programme. It is prepared by the F4E Director, assessed by the Governing Board and sent by the Governing Board, together with its assessment, to the Members, the European Parliament, the Council and the Commission.