Considerations on COM(2018)435 - Horizon Europe - the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination

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dossier COM(2018)435 - Horizon Europe - the Framework Programme for Research and Innovation, laying down its rules for participation and ...
document COM(2018)435 EN
date April 28, 2021
 
table>(1)It is an objective of the Union to strengthen its scientific and technological bases by strengthening the European research area (ERA) in which researchers, scientific knowledge and technology circulate freely and encouraging it to become more competitive, including in its industry, while promoting all research and innovation (R&I) activities to deliver on the Union's strategic priorities and commitments, which ultimately aim to promote peace, the Union's values and the well-being of its peoples.
(2)To deliver scientific, technological, economic, environmental and societal impact in pursuit of this general objective and to maximise the added value of the Union's R&I investments, the Union should invest in R&I through Horizon Europe - the Framework Programme for Research and Innovation 2021-2027 (the Programme). The Programme should support the creation, better diffusion and transfer of high-quality and excellent knowledge and high-quality technologies in the Union, attract talent at all levels and contribute to full engagement of the Union's talent pool, facilitate collaborative links and strengthen the impact of R&I in developing, supporting and implementing Union policies, support and strengthen the uptake and deployment of innovative and sustainable solutions in the Union's economy, in particular in small and medium-sized enterprises (SMEs), and in society, address global challenges, including climate change and the United Nations Sustainable Development Goals (SDGs), create jobs, boost economic growth, promote industrial competitiveness and boost the attractiveness of the Union in the field of R&I. The Programme should foster all forms of innovation, including breakthrough innovation, foster market deployment of innovative solutions, and optimise the delivery of such investment for increased impact within a strengthened ERA.

(3)The Programme should be established for the duration of the multiannual financial framework (MFF) 2021-2027 as laid down in Council Regulation (EU, Euratom) 2020/2093 (4), without prejudice to the time limits set out in Council Regulation (EU) 2020/2094 (5).

(4)The Programme should contribute to increasing public and private investment in R&I in Member States, thereby helping to reach an overall investment target of at least 3 % of the Union's gross domestic product (GDP) in research and development. Achieving that target would require Member States and the private sector to complement the Programme with their own reinforced investment actions in research, development and innovation.

(5)With a view to achieving the objectives of the Programme and while respecting the principle of excellence, the Programme should aim to strengthen, among other things, collaborative links in Europe thereby contributing to reducing the R&I divide.

(6)To help achieve Union policy objectives, activities supported under this Programme should, where relevant, take advantage of and inspire innovation-friendly regulation, in line with the innovation principle, to support a faster and more intensive transformation of the Union's substantial knowledge assets into innovation.

(7)The concepts of open science, open innovation and open to the world should ensure excellence and the impact of the Union's investment in R&I, while safeguarding the Union's interests.

(8)Open science, including open access to scientific publications and research data, as well as optimal dissemination and exploitation of knowledge have the potential to increase the quality, impact and benefits of science. They also have the potential to accelerate the advancement of knowledge by making it more reliable, efficient and accurate, more easily understood by society and responsive to societal challenges. Provisions should be laid down to ensure that beneficiaries provide open access to peer-reviewed scientific publications. Likewise, it should be ensured that beneficiaries provide open access to research data following the principle as open as possible, as closed as necessary, while ensuring the possibility of exceptions taking into account the legitimate interests of the beneficiaries. More emphasis should in particular be given to the responsible management of research data, which should comply with the principles of findability, accessibility, interoperability and reusability (the FAIR principles), in particular through the mainstreaming of data management plans. Where appropriate, beneficiaries should make use of the possibilities offered by the European Open Science Cloud (EOSC) and the European Data Infrastructure and adhere to further open science principles and practices. Reciprocity in open science should be encouraged in all association and cooperation agreements with third countries.

(9)Beneficiaries of the Programme, especially SMEs, are to be encouraged to make use of the relevant existing Union's instruments, such as the European IP Helpdesk that supports SMEs and other participants in the Programme in both protecting and enforcing their intellectual property (IP) rights.

(10)The conception and design of the Programme should respond to the need for establishing a critical mass of supported activities throughout the Union, encouraging excellence-based participation of all Member States, and through international cooperation, in line with the 2030 Agenda for Sustainable Development (the 2030 Agenda), the SDGs and the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (6) (the Paris Agreement). Programme implementation should reinforce the pursuit of the SDGs and the commitment of the Union and its Member States to implementing the 2030 Agenda to achieving its three dimensions – economic, social and environmental – in a coherent and integrated manner.

(11)Activities supported under the Programme should contribute towards the achievement of the Union's objectives, priorities and international commitments.

(12)The Programme should benefit from complementarity with existing relevant European R&I roadmaps and strategies, as well as with important projects of common European interest (IPCEIs), where relevant, provided that related R&I needs are identified in the Programme's strategic planning.

(13)The Programme should ensure transparency and accountability of public funding in R&I projects, thereby preserving the public interest.

(14)The Programme should support R&I activities in the field of social sciences and humanities (SSH). This entails advancing scientific knowledge in that domain and making use of insights and progress from SSH to increase the economic and societal impact of the Programme. Under the pillar Global Challenges and European Industrial Competitiveness, SSH should be fully integrated across all clusters. Beyond the promotion of SSH in projects, the integration of SSH should also be supported through the inclusion, whenever appropriate, of independent external experts from the field of SSH in expert committees and evaluation panels, and through timely monitoring and reporting of SSH in funded research actions. In particular, the level of mainstreaming of SSH should be monitored across the Programme.

(15)The Programme should maintain a balanced approach between research on the one hand and innovation on the other, as well as between bottom-up funding (investigator or innovator driven) and top-down funding (determined by strategically defined priorities), by reference to the nature of the R&I communities that are engaged across the Union, the types and purpose of the activities carried out and the impacts that are sought. The mix of those factors should determine the choice of approach for the relevant parts of the Programme, all of which contribute to all general and specific objectives of the Programme.

(16)The overall budget for the widening participation and spreading excellence component of the Widening Participation and Strengthening the ERA part of the Programme should be at least 3,3 % of the overall Programme budget and should mainly benefit legal entities established in the widening countries.

(17)Excellence initiatives should aim to strengthen R&I excellence in the eligible countries, including supporting training to improve R&I managerial skills, prizes, strengthening innovation ecosystems as well as the creation of R&I networks, including on the basis of research infrastructures financed by the Union. Applicants should clearly show that projects are linked with national and/or regional R&I strategies to be eligible to apply for funding under the widening participation and spreading excellence component of the Widening Participation and Strengthening the ERA part of the Programme.

(18)It should be possible to apply a fast track to R&I procedure, where time-to-grant should not exceed six months, to allow for faster, bottom-up access to funds for small collaborative consortia covering actions from fundamental research to market application.

(19)The Programme should support all stages of R&I especially within collaborative projects and in missions and European Partnerships, as appropriate. Fundamental research is an essential asset of and an important condition for increasing the Union's ability to attract the best scientists in order to become a global hub of excellence. A balance between basic and applied research should be ensured in the Programme. Coupled with innovation, that balance will support the Union's economic competitiveness, growth and jobs.

(20)Evidence shows that embracing diversity, in all senses, is key to doing good science, as science benefits from diversity. Diversity and inclusiveness contribute to excellence in collaborative R&I: collaboration across disciplines, sectors and throughout the ERA makes for better research and higher quality project proposals, can lead to higher rates of societal take-up and can foster the benefits of innovation, thus advancing Europe.

(21)In order to maximise the impact of the Programme, particular consideration should be given to multidisciplinary, interdisciplinary and transdisciplinary approaches as key elements for major scientific progress.

(22)Research activities carried out under the pillar Excellent Science should be determined according to the needs and opportunities of science and should promote scientific excellence. The research agenda should be set in close liaison with the scientific community and include emphasis on attracting new R&I talents, early stage researchers, while strengthening the ERA, avoiding brain drain and promoting brain circulation.

(23)The Programme should support the Union and its Member States in attracting the best talents and skills, taking into account the reality of very intense international competition.

(24)The pillar Global Challenges and European Industrial Competitiveness should be established through clusters of R&I activities, in order to maximise integration across the respective thematic areas while securing high and sustainable levels of impact for the Union in relation to the resources that are expended. It would encourage cross-disciplinary, cross-sectoral, cross-policy and cross-border collaboration in pursuit of the SDGs by following the principles of the 2030 Agenda, the Paris Agreement and the competitiveness of the Union's industries. The organisation of high-ambition, wide-scale initiatives in the form of R&I missions would enable the Programme to achieve a transformative and systemic impact for society in support of the SDGs, also through international cooperation and science diplomacy. The activities under that pillar should cover the full range of R&I activities to ensure that the Union remains at the cutting-edge in strategically defined priorities.

(25)The cluster Culture, Creativity and Inclusive Society should contribute substantially to the research on cultural and creative sectors, including on the Union's cultural heritage and in particular allowing the establishment of a European cultural heritage collaborative space.

(26)Full and timely engagement of all types of industry in the Programme, from individual entrepreneurs and SMEs to large scale enterprises, would substantially contribute to the realisation of the objectives of the Programme and specifically towards the creation of sustainable jobs and growth in the Union. Such engagement by the industry should see its participation in the actions supported at levels at least commensurate with those under the framework programme Horizon 2020 established by Regulation (EU) No 1291/2013 of the European Parliament and of the Council (7) (Horizon 2020).

(27)Actions under the Programme would substantially contribute towards unlocking the potential of the Union's strategic sectors, including key enabling technologies that reflect the Union's industrial policy strategy objectives.

(28)Multi-stakeholder consultations, including of civil society and industry, should contribute to the perspectives and priorities established through the strategic planning. This should result in periodic strategic R&I plans adopted by means of implementing acts for preparing the content of work programmes.

(29)For a particular action to be funded, the work programme should take into account the outcome of specific previous projects as well as the state of science, technology and innovation at national, Union and international level and of the relevant policy, market and societal developments.

(30)It is important to support the Union's industry in remaining or in becoming a world leader in innovation, digitisation and climate neutrality, in particular through investments in key enabling technologies that will underpin tomorrow's business. The Programme's actions should address market failures or sub-optimal investment situations, boost investments in a proportionate and transparent manner, without duplicating or crowding out private financing and have a clear European added value and public return on investments. This will ensure consistency between the actions of the Programme and Union State aid rules, in order to incentivise innovation and avoid undue distortions of competition in the internal market.

(31)The Programme should support R&I in an integrated manner, respecting all relevant provisions in the framework of the World Trade Organization. The concept of research, including experimental development, should be used in accordance with the Frascati Manual developed by the Organisation for Economic Co-operation and Development (OECD), whereas the concept of innovation should be used in accordance with the Oslo Manual developed by the OECD and Eurostat, which follows a broad approach that covers social innovation and design. As in Horizon 2020, the OECD definitions regarding technological readiness levels (TRLs) should continue to be taken into account in the classification of technological research, product development and demonstration activities, and in the definition of types of action available in calls for proposals. Grants should not be awarded for actions where activities go above TRL 8. It should be possible for the work programme to allow grants for large-scale product validation and market replication for a given call under the pillar Global Challenges and European Industrial Competitiveness.

(32)The Programme should contribute to space objectives at a level of spending that is at least proportionally commensurate with that under Horizon 2020.

(33)The Commission communication of 11 January 2018 entitled Horizon 2020 interim evaluation: maximising the impact of EU research and innovation, the resolution of the European Parliament of 13 June 2017 on the assessment of Horizon 2020 implementation in view of its interim evaluation and the Framework Programme 9 proposal (8) and the Council Conclusions of 1 December 2017 entitled From the Interim Evaluation of Horizon 2020 towards the ninth Framework Programme have provided a set of recommendations for the Programme, including for its rules for participation and dissemination. Those recommendations build on the lessons learnt from Horizon 2020 as well as input from Union institutions and stakeholders. Those recommendations include the proposal of measures to promote brain circulation and facilitate openness of R&I networks to invest more ambitiously in order to reach critical mass and maximise impact; to support breakthrough innovation; to prioritise Union R&I investments in areas of high added value, in particular through mission-orientation, full, well-informed and timely citizen involvement and wide communication; to rationalise the Union funding landscape in order to fully use the R&I potential, including research infrastructures across the Union, such as by streamlining the range of European Partnership initiatives and co-funding schemes; to develop more and concrete synergies between different Union funding instruments, in particular by overcoming non-complementary intervention logics and complexity of the various funding and other regulations also with the aim of helping to mobilise under-exploited R&I potential across the Union; to strengthen international cooperation and reinforce openness to third countries' participation; and to continue simplification based on implementation experiences of Horizon 2020.

(34)Given that special attention needs to be paid to coordination and complementarity between different Union policies, the Programme should seek synergies with other Union programmes, from their design and strategic planning, to project selection, management, communication, dissemination and exploitation of results, monitoring, auditing and governance. Regarding funding for R&I activities, synergies should allow for the harmonisation of rules, including cost eligibility rules, as much as possible. With a view to avoiding duplication or overlaps, to increasing the leverage of Union funding and to decreasing the administrative burden for applicants and beneficiaries, it should be possible to promote synergies, in particular by alternative, combined, cumulative funding and transfers of resources.

(35)In accordance with Regulation (EU) 2020/2094 and within the limits of the resources allocated therein, recovery and resilience measures under the Programme should be carried out to address the unprecedented consequences of the COVID-19 crisis. Such additional resources should be used in such a way as to ensure compliance with the time limits provided for in Regulation (EU) 2020/2094. Such additional resources should be allocated exclusively to actions for R&I directed at addressing the consequences of the COVID-19 crisis and in particular its economic, social and societal consequences.

(36)In order for Union funding to have the greatest possible impact and to make the most effective contribution to the Union's policy objectives and commitments, it should be possible for the Union to enter into European Partnerships with private and/or public sector partners. Such partners include industry, SMEs, universities, research organisations, R&I stakeholders, bodies with a public service mission at local, regional, national or international level or civil society organisations, including foundations and non-governmental organisations (NGOs) that support and/or carry out R&I, provided that the desired impacts can be achieved more effectively in partnership than by the Union alone.

(37)It should be possible, depending on the Member State's decision, that the contributions from programmes co-financed by the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), the European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Agricultural Fund for Rural Development (EAFRD) be considered to be a contribution of the participating Member State to European Partnerships under the Programme. However, that possibility should be without prejudice to the need to comply with all provisions applicable to those contributions as set out in a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (the Common Provisions Regulation for 2021-2027) and the fund-specific regulations.

(38)The Programme should strengthen cooperation between European Partnerships and private and/or public sector partners at international level, including by joining up R&I programmes and cross-border investment in R&I bringing mutual benefits to people and businesses while ensuring that the Union can uphold its interests in strategic areas.

(39)Future Emerging Technologies (FET) Flagships have proven to be an effective and efficient instrument, delivering benefits for society in a joint, coordinated effort by the Union and its Member States. Activities carried out within the FET Flagships on Graphene, the Human Brain Project and Quantum Technology, which are supported under Horizon 2020, will continue to be supported under the Programme through calls for proposals included in the work programme. Preparatory actions supported under the FET Flagships part of Horizon 2020 will feed the strategic planning under the Programme and inform the work on missions, co-funded and/or co-programmed European Partnerships and regular calls for proposals.

(40)The Joint Research Centre (JRC) should continue to provide independent customer-driven scientific evidence and technical support for Union policies throughout the whole policy cycle. The direct actions of the JRC should be implemented in a flexible, efficient and transparent manner, taking into account the needs of Union policies and the relevant needs of the users of the JRC and ensuring the protection of the Union's financial interests. The JRC should continue to generate additional resources.

(41)The pillar Innovative Europe should establish a series of measures for the provision of integrated support to respond to the needs of entrepreneurs and entrepreneurship aiming to realise and accelerate breakthrough innovation for rapid market growth as well as to promote the Union's strategic autonomy while preserving an open economy. It should provide a one-stop shop to attract and support all types of innovators and innovative companies, such as SMEs, including start-ups, and, in exceptional cases, small mid-caps, with potential for scaling up at Union and international level. The pillar should offer fast, flexible grants and co-investments, including with private investors. Those objectives should be pursued through the creation of a European Innovation Council (EIC). The pillar should also support the European Institute of Innovation and Technology (EIT) and European innovation ecosystems at large, in particular through European Partnerships with national and regional innovation support actors.

(42)For the purpose of this Regulation and in particular for the activities carried out under the EIC, a start-up should be understood as an SME in the early stage of its life cycle, including those that are created as spin-offs from university research activities, which aims to find innovative solutions and scalable business models, and which is autonomous within the meaning of Article 3 of the Annex to Commission Recommendation 2003/361/EC (9); a mid-cap should be understood as an enterprise that is not an SME and that has between 250 and 3 000 employees, where the staff headcount is calculated in accordance with Articles 3 to 6 of Title I of the Annex to that Recommendation; and a small mid-cap should be understood as a mid-cap that has up to 499 employees.

(43)The policy objectives of the Programme are to be addressed also through financial instruments and budgetary guarantee of the InvestEU Programme, thereby promoting synergies between the two programmes.

(44)The EIC, together with other components of the Programme, should stimulate all forms of innovation, ranging from incremental to breakthrough and disruptive innovation, targeting especially market-creating innovation. Through its Pathfinder and Accelerator instruments, the EIC should aim to identify, develop and deploy high-risk innovations of all kinds, including incremental innovations, with a main focus on breakthrough, disruptive and deep-tech innovations that have the potential to become market-creating innovations. Through coherent and streamlined support, the EIC should fill the current vacuum in public support and private investment for breakthrough innovation. The instruments of the EIC require dedicated legal and management features in order to reflect its objectives, in particular market deployment action.

(45)The Accelerator is intended to bridge the valley of death between research, pre-mass commercialisation and the scaling-up of companies. The Accelerator will provide support to high-potential operations presenting such technological, scientific, financial, management or market risks that they are not yet considered to be bankable and therefore cannot raise significant investments from the market, hence complementing the InvestEU Programme.

(46)In close synergy with the InvestEU Programme, the Accelerator, in its blended finance and equity financial support forms, should finance projects run by SMEs, including start-ups, and, in exceptional cases, small mid-caps, which are either not yet able to generate revenues, or not yet profitable, or not yet able to attract sufficient investment to implement fully their projects' business plan. Such eligible entities would be considered to be non-bankable, while a part of their investment needs could have been or could be provided by one or several investors, such as a private or public bank, a family office, a venture capital fund or a business angel. In that way the Accelerator is intended to overcome a market failure and finance promising, but not yet bankable entities engaged in breakthrough market-creating innovation projects. Once they become bankable, those projects could be financed under the InvestEU Programme.

(47)While the Accelerator budget should be mainly distributed through blended finance, for the purpose of Article 48, its grant-only support to SMEs, including start-ups, should correspond to that under the SME instrument budget of Horizon 2020.

(48)The EIT, primarily through its Knowledge and Innovation Communities (KICs) and by expanding its Regional Innovation Scheme, should aim to strengthen innovation ecosystems that tackle global challenges. This should be achieved by fostering the integration of innovation, research, higher education and entrepreneurship. In accordance with a Regulation of the European Parliament and of the Council on the European Institute of Innovation and Technology (the EIT Regulation) and its Strategic Innovation Agenda as referred to in a Decision of the European Parliament and of the Council on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT) 2021-2027 the EIT should foster innovation through its activities and should significantly step up its support to the integration of higher education within the innovation ecosystem, in particular by stimulating entrepreneurial education, fostering strong non-disciplinary collaboration between industry and academia, and identifying prospective skills for future innovators to address global challenges, which include advanced digital and innovation skills. Support schemes provided by the EIT should benefit EIC beneficiaries, while start-ups emerging from the EIT's KICs should have simplified and thereby faster access to EIC actions. While the EIT's focus on innovation ecosystems should make it naturally fit within the pillar Innovative Europe, it should also support the other pillars, as appropriate. Unnecessary duplication between KICs and other instruments in the same field, in particular other European Partnerships, should be avoided.

(49)A level playing field for competing companies in a given market should be ensured and preserved, since it is a key requirement for all types of innovation, including breakthrough, disruptive and incremental innovation, to flourish thereby enabling in particular a large number of small and medium-size innovators to build-up their R&I capacity, to reap the benefits of their investment and to capture a share of the market.

(50)The Programme should promote and integrate cooperation with third countries and international organisations and initiatives based on the Union's interests, mutual benefits, international commitments, science diplomacy and, as far as possible, reciprocity. International cooperation should aim to strengthen the Union's excellence in R&I, attractiveness, capacity to retain best talents and economic and industrial competitiveness, to tackle global challenges including the SDGs by following the principles of the 2030 Agenda and the Paris Agreement, and to support the Union's external policies. An approach of general openness to international participation and targeted international cooperation actions should be followed, including through appropriate eligibility for funding of entities established in low to middle-income countries. The Union should aim to conclude international cooperation agreements in the field of R&I with third countries. At the same time, association of third countries, in particular for collaborative parts to the Programme, should be promoted, in accordance with association agreements and focusing on added value for the Union. When allocating associated countries' financial contributions to the Programme, the Commission should take into account the level of participation of legal entities of those third countries in the different parts of the Programme.

(51)With the aim of deepening the relationship between science and society and maximising the benefits of their interactions, the Programme should engage and involve all societal actors, such as citizens and civil society organisations, in co-designing and co-creating responsible research and innovation (RRI) agendas, content and throughout processes that address citizens' and civil society's concerns, needs and expectations, promoting science education, making scientific knowledge publicly accessible, and facilitating participation by citizens and civil society organisations in its activities. This should be done across the Programme and through dedicated activities in the part Widening Participation and Strengthening the ERA. The engagement of citizens and civil society in R&I should be coupled with public outreach activities to generate and sustain public support for the Programme. The Programme should also seek to remove barriers and boost synergies between science, technology, culture and the arts to obtain a new quality of sustainable innovation. The measures taken to improve the involvement of citizens and civil society in the supported projects should be monitored.

(52)Where appropriate, the Programme should take into account the specific characteristics of the outermost regions as identified in Article 349 of the Treaty on the Functioning of the European Union (TFEU) and in line with the Commission's communication of 24 October 2017 entitled A stronger and renewed strategic partnership with the EUs outermost regions', as welcomed by the Council.

(53)The activities developed under the Programme should aim to eliminate gender bias and inequalities, enhancing work-life balance and promoting equality between women and men in R&I, including the principle of equal pay without discrimination based on sex, in accordance with Articles 2 and 3 of the Treaty on European Union (TEU) and Articles 8 and 157 TFEU. The gender dimension should be integrated in R&I content and followed through at all stages of the research cycle. In addition, the activities under the Programme should aim to eliminate inequalities and promote equality and diversity in all aspects of R&I with regard to age, disability, race and ethnicity, religion or belief, and sexual orientation.

(54)In light of the specificities of the defence industry sector, the detailed provisions for Union funding to defence research projects should be fixed in Regulation (EU) 2021/697 of the European Parliament and of the Council (10) (the European Defence Fund) which defines the rules of participation for defence research. Activities to be carried out under the European Defence Fund should have an exclusive focus on defence research and development, while activities carried out under the specific programme established by Council Decision (EU) 2021/764 (11) (the specific programme) and the EIT should have an exclusive focus on civil applications. Unnecessary duplication should be avoided.

(55)This Regulation lays down a financial envelope for the entire duration of the Programme which is to constitute the prime reference amount, within the meaning of point 18 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (12), for the European Parliament and the Council during the annual budgetary procedure. That financial envelope comprises an amount of EUR 580 000 000 in current prices for the specific programme established by Decision (EU) 2021/764 and for the EIT, in line with the joint declaration by the European Parliament, Council and Commission of 16 December 2020 on the reinforcement of specific programmes and adaptation of basic acts (13).

(56)Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (14) (the Financial Regulation) applies to this Programme. The Financial Regulation lays down rules on the implementation of the Union budget, including the rules on grants, prizes, procurement, indirect management, financial instruments, budgetary guarantees, financial assistance and the reimbursement of external experts.

(57)In accordance with Article 193(2) of the Financial Regulation, a grant may be awarded for an action which has already begun, provided that the applicant can demonstrate the need for starting the action prior to signature of the grant agreement. However, the costs incurred prior to the date of submission of the grant application are not eligible, except in duly justified exceptional cases. In order to avoid any disruption in Union support which could be prejudicial to Union's interests, it should be possible to provide in the financing decision, during a limited period of time at the beginning of the MFF 2021-2027, and only in duly justified cases, for eligibility of activities and costs from the beginning of the 2021 financial year, even if they were implemented and incurred before the grant application was submitted.

(58)Continually throughout the Programme, administrative simplification should be sought, in particular the reduction of the administrative burden for beneficiaries. The Commission should further simplify its tools and guidance in such a way that they impose a minimal burden on beneficiaries. In particular, the Commission should consider issuing an abridged version of the guidance.

(59)The completion of the Digital Single Market and the growing opportunities from the convergence of digital and physical technologies require investments to be increased. The Programme should contribute to those efforts with a substantial increase in spending on main digital R&I activities compared to Horizon 2020 (15). This should ensure that Europe remains at the forefront of global R&I in the digital field.

(60)Quantum research under the Digital, Industry and Space cluster under Pillar II should be prioritised, given its crucial role in the digital transition, namely by expanding the European scientific leadership and excellence in quantum technologies, enabling the envisaged budget set in 2018 to be achieved.

(61)In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (16) and Council Regulations (EC, Euratom) No 2988/95 (17), (Euratom, EC) No 2185/96 (18) and (EU) 2017/1939 (19), the financial interests of the Union are to be protected by means of proportionate measures, including measures relating to the prevention, detection, correction and investigation of irregularities, including fraud, to the recovery of funds lost, wrongly paid or incorrectly used, and, where appropriate, to the imposition of administrative penalties.

In particular, in accordance with Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, the European Anti-Fraud Office (OLAF) has the power to carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. The European Public Prosecutor's Office (EPPO) is empowered, in accordance with Regulation (EU) 2017/1939, to investigate and prosecute criminal offences affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council (20). In accordance with the Financial Regulation, any person or entity receiving Union funds is to fully cooperate in the protection of the financial interests of the Union, grant the necessary rights and access to the Commission, OLAF, the Court of Auditors and, in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, the EPPO, and ensure that any third parties involved in the implementation of Union funds grant equivalent rights.

(62)Third countries which are members of the European Economic Area (EEA) may participate in Union programmes in the framework of the cooperation established under the Agreement on the European Economic Area (21), which provides for the implementation of the programmes on the basis of a decision adopted under that Agreement. Third countries may also participate on the basis of other legal instruments. A specific provision should be introduced in this Regulation requiring third countries to grant the necessary rights and access required for the authorising officer responsible, OLAF and the Court of Auditors to comprehensively exercise their respective competences.

(63)Pursuant to Article 94 of Council Decision 2013/755/EU (22), persons and entities established in overseas countries or territories are eligible for funding subject to the rules and objectives of the Programme and possible arrangements applicable to the Member State to which the relevant overseas country or territory is linked.

(64)Pursuant to paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 for Better Law-Making (23), this Programme should be evaluated on the basis of information collected in accordance with specific reporting and monitoring requirements, while avoiding overregulation and an administrative burden, in particular on the Member States and the beneficiaries of the Programme. Those requirements, where appropriate, should include measurable indicators as a basis for evaluating the effects of the Programme on the ground.

(65)In order to ensure the effective assessment of the Programme's progress towards the achievement of its objectives, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending Annex V with regard to the impact pathway indicators, where considered to be necessary, and to set baselines and targets as well as to supplement this Regulation with provisions on the establishment of a monitoring and evaluation framework. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(66)Coherence and synergies between the Programme and the Union Space Programme will foster a globally competitive and innovative European space sector, reinforce Europe's autonomy in accessing and using space in a secure and safe environment and strengthen Europe's role as a global actor. Excellence in research, breakthrough solutions and downstream users in the Programme will be supported by data and services made available by the Union Space Programme.

(67)Coherence and synergies between the Programme and Erasmus+ will foster the uptake of research results through training activities, diffuse innovation spirit to the education system and ensure that education and training activities rely on the most updated R&I activities. In that regard, following the pilot actions launched under Erasmus+ 2014-2020 concerning European Universities, the Programme will, where appropriate, complement in a synergetic way the support provided by Erasmus+ to European Universities.

(68)In order to increase the impact of the Programme in addressing Union priorities, synergies with programmes and instruments aiming to responding to emerging Union needs should be encouraged and sought, including with the Just Transition Mechanism, the Recovery and Resilience Facility and EU4Health Programme.

(69)The rules for participation and dissemination should adequately reflect the needs of the Programme taking into account the concerns raised and the recommendations made by various stakeholders, as well as in the interim evaluation of Horizon 2020 carried out with the assistance of independent external experts.

(70)Common rules across the Programme should ensure a coherent framework which facilitates participation in programmes financially supported by the budget of the Programme, including participation in programmes managed by funding bodies such as the EIT, joint undertakings or any other structures under Article 187 TFEU, and participation in programmes undertaken by Member States under Article 185 TFEU. Adopting specific rules should be possible, but such exceptions should be limited to when strictly necessary and duly justified.

(71)Actions which fall within the scope of the Programme should respect fundamental rights and observe the principles acknowledged in particular by the Charter of Fundamental Rights of the European Union (the Charter). Such actions should be in conformity with any legal obligation including international law and with any relevant Commission decisions such as the Commission notice of 28 June 2013 (24), as well as with ethical principles, which include avoiding any breach of research integrity. The opinions of the European Group on Ethics in Science and New Technologies, the European Union Agency for Fundamental Rights and the European Data Protection Supervisor should be taken into account, where appropriate. Article 13 TFEU should also be taken into account in research activities, and the use of animals in research and testing should be reduced, with a view ultimately to replacing their use.

(72)In order to guarantee scientific excellence, and in line with Article 13 of the Charter, the Programme should promote the respect of academic freedom in all countries benefiting from its funds.

(73)In accordance with the objectives of international cooperation as set out in Articles 180 and 186 TFEU, the participation of legal entities established in third countries and of international organisations should be promoted, based on mutual benefits and the Union's interests. The implementation of the Programme should be in conformity with the measures adopted in accordance with Articles 75 and 215 TFEU and should be in compliance with international law. For actions related to Union strategic assets, interests, autonomy or security, it should be possible for participation in specific actions of the Programme to be limited to legal entities established only in Member States or to legal entities established in specified associated or other third countries in addition to Member States. Any exclusion of legal entities established in the Union or in associated countries directly or indirectly controlled by non-associated third countries or by legal entities of non-associated third countries should take into account the risks the inclusion of such entities would represent, on the one hand, and the benefits that their participation would generate, on the other hand.

(74)The Programme acknowledges climate change as one of the biggest global and societal challenges and reflects the importance of tackling climate change in accordance with the Union's commitment to implement the Paris Agreement and the SDGs. Accordingly, the Programme should contribute to mainstream climate actions and to the achievement of an overall target of 30 % of the Union budget expenditures supporting climate objectives. Climate mainstreaming should be adequately integrated in R&I content and applied at all stages of the research cycle.

(75)In the context of the impact pathway related to climate, the Commission should report on the results, innovations and aggregated estimated effects of projects that are climate-relevant, including by Programme part and by implementation mode. In carrying out its analysis, the Commission should take account of the long-term economic, societal and environmental costs and benefits to Union citizens of activities under the Programme, including the uptake of innovative climate mitigation and adaptation solutions, the estimated impact on jobs and company creation, economic growth and competitiveness, clean energy, health and well-being, including air, soil and water quality. The results of that impact analysis should be made public, should be assessed in the context of the Union's climate and energy goals and should contribute to the subsequent strategic planning and future work programmes.

(76)Reflecting the importance of tackling the dramatic loss of biodiversity, R&I activities under the Programme should contribute to the preservation and restoration of biodiversity and to the achievement of the overall ambition of providing 7,5 % of annual spending under the MFF to biodiversity objectives in 2024 and 10 % of annual spending under the MFF to biodiversity objectives in 2026 and 2027, while considering the existing overlaps between climate and biodiversity goals in accordance with the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources.

(77)Horizontal financial rules adopted by the European Parliament and by the Council on the basis of Article 322 TFEU apply to this Regulation. Those rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes and indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also include a general regime of conditionality for the protection of the Union budget.

(78)It is possible that the use of sensitive background information or access by unauthorised individuals to sensitive results have an adverse impact on the interests of the Union or of one or more of the Member States. Thus handling of confidential data and classified information should be governed by all relevant Union law, including the Institutions' internal rules, such as Commission Decision (EU, Euratom) 2015/444 (25).

(79)It is necessary to establish the minimum conditions for participation, both as a general rule where a consortium should include at least one legal entity from a Member State, and with regard to the specificities of particular types of action under the Programme.

(80)It is necessary to establish the terms and conditions for providing Union funding to participants in actions under the Programme. Grants should be the main form of support in the Programme. They should be implemented taking into account all forms of contribution set out in the Financial Regulation, including lump sums, flat rates or unit costs, with a view to further simplification. The grant agreement should establish the rights and obligations of the beneficiaries, including the role and tasks of the coordinator where applicable. Close cooperation with Member States experts should be ensured in the drawing up of the model grant agreements and in any substantial amendment to them, in view, among other things, of further simplification for beneficiaries.

(81)The funding rates in this Regulation are referred to as maximums in order to comply with the co-financing principle.

(82)In accordance with the Financial Regulation, the Programme should provide the basis for a wider acceptance of the usual cost-accounting practices of the beneficiaries as regards personnel costs and unit costs for internally invoiced goods and services, including for large research infrastructures within the meaning of Horizon 2020. The use of unit costs for internally invoiced goods and services calculated in accordance with the usual accounting practices of the beneficiaries combining actual direct costs and indirect costs should be an option which could be chosen by all beneficiaries. In that respect, beneficiaries should be able to include actual indirect costs calculated on the basis of allocation keys in such unit costs for internally invoiced goods and services.

(83)The current system of reimbursement of actual personnel costs should be further simplified, building on the project-based remuneration approach developed under Horizon 2020, and further aligned to the Financial Regulation, with the aim of reducing the remuneration gap between Union researchers involved in the Programme.

(84)The Participant Guarantee Fund set up pursuant to Horizon 2020 and managed by the Commission has proved to be an important safeguard mechanism which mitigates the risks associated with the amounts due and not reimbursed by defaulting participants. Therefore, the Participant Guarantee Fund, renamed the mutual insurance mechanism (the Mechanism), should be continued and enlarged to other funding bodies in particular to initiatives pursuant to Article 185 TFEU. It should be possible to extend the Mechanism to beneficiaries of any other directly managed Union programme. On the basis of close monitoring of the possible negative returns on the investments made by the Mechanism, the Commission should take appropriate mitigating measures in order to allow the Mechanism to continue its interventions for the protection of the financial interests of the Union and to return contributions to beneficiaries at the payment of the balance.

(85)Rules governing the exploitation and dissemination of results should be laid down to ensure that beneficiaries protect, exploit, disseminate and provide access to those results as appropriate. More emphasis should be placed on to exploiting those results, and the Commission should identify and help maximise opportunities for beneficiaries to exploit results, in particular in the Union. The exploitation of results should take into consideration the principles of the Programme, including promoting innovation in the Union and strengthening the ERA.

(86)The key elements of the proposal evaluation and selection system of Horizon 2020 with its particular focus on excellence and, where applicable, on impact and quality and efficiency of implementation, should be maintained. Proposals should continue to be selected based on the evaluation made by independent external experts. The evaluation process should be designed to avoid conflicts of interest and bias. The possibility of a two-stage submission procedure should be taken into account and, where appropriate, anonymised proposals could be evaluated during the first stage of evaluation. The Commission should continue to involve independent observers in the evaluation process, where applicable. For Pathfinder activities, missions and in other duly justified cases as set out in the work programme, the necessity to ensure the overall coherence of the portfolio of projects may be taken into account, provided that the proposals have passed the applicable thresholds. The objectives and procedures for doing so should be published in advance. In accordance with Article 200(7) of the Financial Regulation, applicants should receive feedback on the evaluation of their proposal, including, in particular, where applicable, the reasons for rejection.

(87)Systematic cross-reliance on assessments and audits with other Union programmes should be implemented in accordance with Articles 126 and 127 of the Financial Regulation for all parts of the Programme, where possible, in order to reduce administrative burden for beneficiaries of Union funds. Cross-reliance should be explicitly provided for by considering also other elements of assurance such as system and process audits.

(88)Specific challenges in the areas of R&I should be addressed by prizes, including common or joint prizes where appropriate, organised by the Commission or the relevant funding body with other Union bodies, associated countries, other third countries, international organisations or non-profit legal entities. Prizes should support the achievement of the objectives of the Programme.

(89)The types of financing and the methods of implementation under this Regulation should be chosen on the basis of their ability to achieve the specific objectives of the actions and to deliver results, taking into account, in particular, the costs of controls, the administrative burden and the expected risk of non-compliance. This should include consideration of the use of lump sums, flat rates and scales of unit costs.

(90)In order to ensure continuity in providing support in the relevant policy area and to allow implementation to start from the beginning of the MFF 2021-2027, this Regulation should enter into force as a matter of urgency and should apply, with retroactive effect, from 1 January 2021.

(91)Since the objectives of this Regulation cannot be sufficiently achieved by the Member States, but can rather, by reason of avoiding duplication, reaching critical mass in key areas and maximising Union added value, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

(92)Regulation (EU) No 1290/2013 of the European Parliament and of the Council (26) and Regulation (EU) No 1291/2013 should therefore be repealed,