The Commission presented a report accompanying the mid-term evaluation of the LIFE programme 2014-2020, the EU’s funding instrument for the environment and climate action. The mid-term evaluation covers the programme’s first two years (2014-2015) and is largely based on the external study by an independent consultant.

This evaluation comes at an early stage of the programme’s implementation: most projects have yet to start and few projects have finished. This is why the evaluation has focused mainly on: the processes put in place to reach its objectives, the ongoing activities (such as contracts/projects already financed) and, where relevant, their anticipated results.

The evidence collected so far shows that LIFE programme is:

the only programme with environment and climate action upfront; a flexible instrument , which finances projects of different sizes and attracts small, medium and large enterprises, universities, research centres, national and local authorities, civil society as well as various NGOs; appreciated for its quick reaction to changing political and societal needs; known for the relevance and quality of its activities, which answer local needs and are visible and appreciated across the EU by stakeholders and the general public; expected to provide value for money and so far can demonstrate a direct and measurable impact, e.g. on reducing emissions and energy consumption or on protecting biodiversity by improving species conservation status; extremely appreciated for its EU added value because it ensures that EU environmental and climate legislation and policies are applied in a consistent manner across the EU. It represents an EU level platform for sharing best practice and demonstration activities; well positioned to provide a contribution to the economy by incentivising EU industry to further develop green technology capabilities, which form one of EU’s competitive advantages and supporting long-term economic viability and stability by promoting sustainable development; well managed as demonstrated by its very low error rate. This means that funds are used according to the financial rules while delivering measurable results with a substantial impact on the ground. This is ensured by the monitoring system, which allows timely management decisions.

Recommendations : the evaluation also highlights some recommendations for improvement:

the need to focus on existing and new priorities : the circular economy, delivery of the 2030 climate and energy framework especially by encouraging innovation, the implementation of the Paris Agreement, the possible review of the EU adaptation strategy, the achievement of the objectives of the Nature Directives, the implementation of the 2030 Agenda and SDGs, within available financial resources. These priorities will be addressed through fine-tuning the financing per priority area; the scope and demand for simplification of LIFE procedures for grants remain, in particular for the submission of proposals and reporting; the communication strategy needs a more active and responsive approach to better target audiences and deliver key messages that are objective-specific and target-specific; increase project replicability and transferability by targeting obstacles preventing activities continuing after the project ends (such as lack of financial resources and capacity/human resources for investment planning) thereby developing a pipeline of projects for investment from other Union and private sector sources; the national contact points need a stronger role.

These LIFE mid-term evaluation findings will guide the preparation of the next MAWP 20182020 and the post-2020 MFF.

PURPOSE: to establish a Programme for the Environment and Climate Action (LIFE) for the period 2014-2020.

LEGISLATIVE ACT: Regulation (EU) No 1293/2013 of the European Parliament and the Council on the establishment of a Programme for the Environment and Climate Action (LIFE) and repealing Regulation (EC) No 614/2007.

CONTENT: the LIFE Programme is the EU financial instrument to support projects on the environment and climate change in the whole of the EU. It shall contribute to sustainable development and to the achievement of the objectives and targets of the Europe 2020 Strategy and of relevant Union environment and climate strategies and plans.

Budget and sub-programmes : the financial envelope for the period 2014-2020 is fixed at EUR 3 456 655 million in current prices as follows:

· EUR 2 592 491250 allocated to the sub-programme “Environment”;

· 864.163.750 EUR allocated to the sub-programme “Climate Action”.

1) The sub-programme “Environment” is made up of three priority areas for action: a) Environment and Resource Efficiency; b) Nature and Biodiversity; and c) Environmental Governance and Information.

2) The sub-programme “Climate Action” is made up of three priority areas for action: a) Climate Change Mitigation; b) Climate Change Adaptation; c) Climate Governance and Information.

At least 81% of the budgetary resources for the LIFE Programme shall be allocated to projects supported by way of action grants. In line with wishes of the European Parliament, at least 55% of the budgetary resources allocated to projects supported by way of action grants shall be dedicated to projects supporting the conservation of nature and biodiversity .

Types of projects : the Regulation defines the eligibility and award criteria and project selection. It foresees the creation of a new type of project, the “integrated projects”: these projects aim to improve the implementation of environmental and climate policies and their integration into other policies, in particular, ensuring the coordinated mobilisation of other European funds, national or private funding sources for environmental or climate objectives. The integrated projects shall be implemented on a large territorial scale (in particular, regional, multi-regional, or national, and of cross-sectoral manner).

The Commission shall ensure geographical balance for integrated projects by indicatively allocating at least three integrated projects to each Member State, ensuring at least one integrated project under the sub-programme for Environment and at least one integrated project under the sub-programme for Climate Action during the LIFE programming period.

A maximum of 30% of the budgetary resources allocated to action grants may be allocated to integrated projects.

The action grants may also finance “capacity-building projects” to build Member States' capacity to participate in the LIFE Programme.

Co-financing rates : this is in principle up to 60% of eligible costs: i) up to 75% of eligible costs for projects funded under the priority area Nature and Biodiversity in the sub-programme for Environment that concern priority habitats or species; ii) up to 100% of eligible costs for capacity-building projects.

Participation : the LIFE programme shall be open to the participation of countries of third countries (European Free Trade Association (EFTA) countries, candidate countries, countries to which the European Neighbourhood Policy applies).It can also finance activities outside the Union and in overseas countries and territories (OCTs). Cooperation with relevant international organisations, and with their institutions and bodies, shall also be possible

Beneficiaries : public and private bodies may be funded by the LIFE Programme. The LIFE Programme logo shall be used for all communication activities and appear on notice boards at strategic places visible to the public.

Monitoring and evaluation : the Commission shall present, no later than 30 June 2017, an external and independent mid-term evaluation report of the LIFE Programme, and not later than 31 December 2023, an external evaluation report of the LIFE Programme.

ENTRY INTO FORCE: 23/12/2013. The Regulation shall apply from 01/01/2014.

DELEGATED ACTS: the Commission may adopt delegated acts in order to secure the best possible evaluation of the use of Union funds. The power to adopt delegated acts is conferred on the Commission for a period of seven years from 23 December 2013. The European Parliament or the Council may raise objections in regard to a delegated act within two months of notification of that act (this period may be extended by two months). If the European Parliament or the Council make objections, the delegated act will not enter into force.

The European Parliament adopted by 568 votes to 20, with 21 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on the establishment of a Programme for the Environment and Climate Action (LIFE).

Parliament adopted its position at first reading, following the ordinary legislative procedure. The amendments adopted in plenary are the result of a compromise negotiated between the European Parliament and the Council. They amended the Commission proposal as follows:

General objectives : the LIFE Programme should support of the Natura 2000 network and tackling the degradation of ecosystems . It should seek to support environmental and climate governance at all levels and support the implementation of the 7th Environment Action Programme. It could also finance activities in the overseas countries and territories ( OCTs ).

Budget : the financial envelope for the implementation of the LIFE Programme for the period from 2014 to 2020 is set at EUR 3 456 655 000 in current prices:

EUR 2 592 491 250 allocated to the sub-programme for Environment; EUR 864 163 750 allocated to the sub-programme for Climate Action.

The sub-programme for Environment should have three priority areas: (i) Environment and Resource Efficiency; (ii) Nature and Biodiversity; (iii) Environmental Governance and Information. The Commission shall be empowered to adopt delegated acts to add, delete or amend the thematic priorities.

At least 55% of the budgetary resources allocated to projects supported by way of action grants under the sub-programme for Environment shall be dedicated to projects supporting the conservation of nature and biodiversity .

The sub-programme for Climate Action should have three priority areas: (i) Climate Change Mitigation; (ii) Climate Change Adaptation; (iii) Climate Governance and Information.

On climate change adaptation, priority should be granted, where appropriate, to ecosystem-based approaches .

Types of financing : at least 81% of the budgetary resources for the LIFE Programme should be allocated to projects supported by way of action grants or, where appropriate, financial instruments as referred to in the Regulation.

A maximum of 30% of the budgetary resources allocated to action grants may be allocated to integrated projects.

Action grants may also finance capacity-building projects .

During the first multiannual work programme, a Member State shall be eligible for funding for one capacity-building project up to an amount of EUR 1 000 000. During the second multiannual work programme, a Member State shall be eligible for funding for one capacity-building project up to an amount of EUR 750 000.

The Commission shall establish a fast-track award procedure for all capacity-building projects.

Geographical balance : the Commission shall ensure geographical balance for integrated projects by indicatively allocating at least three integrated projects to each Member State , ensuring at least one integrated project under the sub-programme for Environment and at least one integrated project under the sub-programme for Climate Action during the LIFE programming period.

Cofinancing rate : in principle it should be the up to 60 % of eligible costs for all projects and may reach up to 75 % of eligible costs for projects funded under the priority area Nature and Biodiversity in the sub-programme for Environment that concern priority habitats or species; or up to 100 % of eligible costs for capacity-building projects.

Conditions for the eligibility of costs are laid down in Article 126 of Regulation (EU, Euratom) No 966/2012. Such costs shall include VAT and staff costs . The Commission shall provide an overview, in the mid-term and ex-post evaluations of the LIFE Programme, of VAT reimbursements per Member State that project beneficiaries under the LIFE Programme have requested at the final payment stage.

Beneficiaries : with a view to ensuring the visibility of the LIFE Programme, the beneficiaries shall publicise the LIFE Programme and the results of their projects, always mentioning the Union support received. The LIFE Programme logo shall be used for all communication activities and appear on notice boards at strategic places visible to the public.

Lastly, the mid-term evaluation report shall contain or be accompanied by a thorough assessment of the extent and quality of the demand for, planning of and implementation of integrated projects.

The Council was briefed by the Presidency on progress regarding the proposal for a Regulation on the establishment of a Programme for the Environment and Climate Action (LIFE) for the period 2014-2020.

This proposal is dependant on the outcome of the discussions on MFF, since the final budget to be allocated to the LIFE Programme depends on it. Nevertheless, both the European Parliament and the Council agreed to enter into negotiations and three informal trilogue meetings have already taken place .

Significant progress has been made on several key issues but further work is required in particular on :

indicative national allocations, co-financing rates, and overseas countries and territories.

The European Parliament’s Environment Committee voted 81 amendments on the proposal on 19 September 2012. The EP must now adopt its first reading position.

The Committee on the Environment, Public Health and Food Safety adopted the report by Jutta HAUG (S&D, DE) on the proposal for a regulation of the European Parliament and of the Council on the establishment of a Programme for the Environment and Climate Action (LIFE).

The committee recommends that the position of the European Parliament adopted in first reading following the ordinary legislative procedure should amend the Commission proposal as follows:

General aims of the LIFE Programme : these aims must include: (i) supporting the management of areas that form part of the Natura 2000 network and the conservation of the natural values included in that network, in particular the species and habitats considered priorities in accordance with Union legislation; (ii) supporting the implementation of the Union Environmental Action Programme.

Furthermore, the LIFE Programme shall contribute to the Union biodiversity strategy to 2020, the Roadmap to a Resource Efficient Europe, the Roadmap 2050 and the Energy Roadmap until 2050 .

Members want the Programme to be open to the participation of the overseas countries and territories referred to in Decision 2001/822/EC.

Budget: in line with the EP's overall approach to the Multiannual Financial Framework negotiations, Members abstained from making any precise proposals as to the amount of the LIFE budget. However, they recall that in its resolution on the EU Biodiversity strategy , Parliament expresses disappointment in relation to the proposed allocation for the new LIFE programme and takes the view that the challenges addressed in the biodiversity and nature conservation plan call for a substantial increase in the funds allocated to the LIFE programme.

In this context, the report recommends that approximately 75 % of the overall financial envelope be allocated to the sub-programme for Environment and that approximately 25 % of the overall financial envelope be allocated to the sub-programme for Climate Action . At least 80 % of the budgetary resources for LIFE Programme shall be allocated to innovative financial instruments and projects supported by means of action grants.

Members want at least 75 % of the budgetary resources allocated to projects supported by way of action grants under the sub-programme for Environment to be dedicated to projects supporting the conservation of nature and biodiversity.

Integrated projects : the report introduces a new article dedicated to integrated projects and providing mechanisms to assist Member States to put this new approach into practice. These Projects shall focus primarily on the areas of nature, water, waste, air, and climate change mitigation and adaptation.

Integrated Projects shall serve as concrete instruments for mainstreaming environment and climate objectives into overall Union expenditure, promoting coordination with and mobilisation of other Union funding sources as well as national and private funding. Members stress that the Commission and Member States shall actively support and facilitate the development of Integrated Projects.

Eligibility criteria, geographical balance and technical assistance : where possible, projects financed by the LIFE Programme shall promote the use of green public procurement and synergies between different objectives. The selection of funding for all projects other than Integrated Projects shall be based on merit and quality.

Members ask that a Member State that has been awarded fewer than two projects in two subsequent years, or has received far less than its indicative national allocations under the programming period 2007-2013, be entitled to receive special technical assistance to support the preparation of high quality projects for the following year might apply for a capacity building project.

Given the novelty and the specific planning approach required for Integrated Projects it is crucial that all Member States gain experience with this type of project during the next LIFE programming period. It is therefore suggested that each Member State be entitled to funding for at least two integrated projects, provided that these cover different areas.

Rates of co-financing: Members consider that a general increase in the cofinancing rate (as proposed by the Commission) would only be possible at the expense of the total number of projects and the leverage effect of the LIFE instrument. They propose that the maximum co-financing rate be 50 % of eligible costs and 60 % of eligible costs for integrated projects. Member States with temporary budgetary difficulties may apply for an increased rate of up to 75 % of eligible costs. The maximum co-financing rate under the priority area "Nature and Biodiversity" for seriously threatened habitats and species shall be 75 %.

Admissible costs: the report states that VAT shall be deemed an eligible cost in the case of project beneficiaries who cannot recover VAT costs in the relevant Member State, except in the case of non-taxable persons as defined in Council Directive 2006/112/EC (VAT Directive).

Staff costs for all beneficiaries, including salary costs of the personnel of national administrations, shall be considered an eligible cost for projects to the extent that they relate to the cost of activities that the beneficiary would not have carried out if the project concerned had not been undertaken.

Multiannual work programmes : an amendments states that each multiannual work programme shall have a duration of at least three years and be renewable , provided that the thematic priorities laid down in that multiannual work programme remain valid. Furthermore, the Commission shall regularly make available the most meaningful results of the projects funded under the LIFE Programme in order to facilitate feedback and exchange of good practices across the Union.

Visibility of the LIFE Programme : Members want the LIFE logo , which has been very successful in ensuring the visibility of the Union's funding, to be used for all communication activities and to appear on notice boards at strategic places visible to the public.

The Council was informed by the Presidency about the state of play of the proposal for a regulation on the establishment of a Programme for the Environment and Climate Action (LIFE) for the period 2014-2020. The aim of the proposal is to increase the efficiency of the current LIFE + in order to adapt it to the new challenges ahead and to the achievement of Europe 2020 objectives and targets.

The Council had an orientation debate on the proposal on 9 March 2012 (refer to the summary from the same date) and the Presidency prepared a first draft compromise on this basis. Negotiations are still ongoing in the preparatory bodies.

According to the Presidency note the main outstanding issue under discussion is the geographical balance and national allocations .

The Council had an orientation debate on the proposal for a regulation on the establishment of a Programme for the Environment and Climate Action (LIFE) for the period 2014-2020. The proposal was presented by the Commission at the last Environment Council meeting in December, in the context of its Multiannual Financial Framework (MFF) for 2014-2020.

Ministers discussed two key issues.

(1) Geographical balance - i.e. the criteria for the distribution of LIFE funds among Member States.

Most Member States believed that the concept of "geographical balance" was relevant for the distribution of Integrated Projects, although many would prefer the concept to be clarified further and specific criteria for the implementation of "geographical balance" to be included in the regulation. Several Member States considered that the merit and quality should remain the first criteria for the distribution of projects, in particular "traditional projects".

Some Member States considered that the geographical balance should apply to all types of projects, while others preferred to keep national allocations, as in the existing LIFE+ Regulation.

( 2) Co-financing rates, including simplification of procedures.

Many Member States would like to maintain VAT and permanent staff cost as eligible costs, even if that would entail a decrease in co-financing rates, although some ministers expressed concern that this would lead to a decrease in proposals for projects. Most Member States were in favour of a simplification of procedures.

The European Parliament will vote its report by the end of 2012.

The Council took note of the presentation by the Commission of its recent proposal for a regulation on the establishment of a Programme for the Environment and Climate Action (LIFE).

In the Multiannual Financial Framework for 2014-2020 , the Commission proposes to address environmental and climate issues as an integral part of all the EU main instruments and interventions and it intends to increase the proportion of the Union budget related to climate action to at least 20%, with contribution from different policy fields.

The Commission notes, however, that the main Union financing instruments do not address all environmentally and climate specific needs. For this reason, it proposes to modify the LIFE Programme currently regulated by the LIFE+ Regulation, in order to better align it with

Europe 2020 objectives and therefore to respond more efficiently to the environmental challenges facing the Union. Globally, the LIFE Programme allocation will increase from EUR 2.1 billion to EUR 3.2 billion.

The main elements of the new LIFE Regulation include:

creation of two sub-programmes under LIFE: one for Environment (with a budget of EUR 2.4 billion) and one for Climate Action (allocated EUR 800 million); special emphasis on better governance; creation of "Integrated Projects", which will operate on a large scale and will aim to improve the implementation of environmental and climate policy and their integration into other policies; better definition of the activities funded for each priority area.

PURPOSE: to establish a programme for the environment and climate action (LIFE programme) covering the period 1 January 2014 to 31 December 2020.

PROPOSED ACT: Regulation of the European Parliament and of the Council. .

BACKGROUND: in its Communication entitled “ A Budget for Europe 2020 ” (the MFF Communication), in which it recognised the climate change challenge, the Commission stated that it intends to increase the climate related proportion of the Union budget to at least 20% with contribution from different policies. The proposed Regulation should contribute to that goal.

The Commission has decided to address environment and climate action as an integral part of all the main instruments and interventions. This 'mainstreaming' approach implies that environmental and climate objectives need to be reflected in all main instruments to ensure that they contribute to building a low-carbon, resource efficient and climate resilient economy.

However, the main Union funding instruments do not address all environmental and climate specific needs . Furthermore, implementation of environmental and climate legislation remains uneven and inadequate across the Union. This situation requires new and more efficient ways of implementing legislation, as well as development and dissemination of best practices across the Union.

For this reason, and in addition to mainstreaming, the Commission proposes to continue the LIFE Programme currently regulated by the LIFE+ Regulation , and define a more strategic approach with a clearer focus on activities and sectors where LIFE could make a difference.

IMPACT ASSESSMENT: the impact assessment focused on the recommendations from the evaluations and the Court of Auditors aiming to increase the effectiveness and added value of LIFE, while incorporating stakeholders' main concerns and suggestions.

The options to establish priorities analysed in the Impact Assessment try to strike a balance between the need for stability for potential applicants and the need to better focus on Union policy needs. Three scenarios were analysed: (i) status quo, with a pure bottom-up approach partially corrected by the concentration of earmarked resources on climate action; (ii) a flexible top-down approach for all types of projects; (iii) combining the top-down approach for integrated projects and the bottom-up approach for all other types of projects. The preferred option is the flexible top-down approach.

The Impact Assessment analysed options for areas on which Integrated Projects should focus, concluding that Natura 2000, water, waste and air were the sectors with the highest potential for success and where more environmental benefits could be obtained.

Lastly, a strong emphasis was put on simplification to build on the changes undertaken by LIFE+, such as the use of e-proposals. As part of the simplification measures, options for externalisation of most of the management tasks to an existing Executive Agency were also analysed, including full externalisation and a hybrid option.

LEGAL BASIS: Article 192 of the Treaty on the Functioning of the European Union.

CONTENT: this proposal for a new regulation aims to establish the LIFE programme with two sub-programmes , one on the environment and the other on climate action .

The objective of the LIFE Programme is to be a catalyst for promoting implementation and integration of environmental and climate objectives in other policies and Member State practice. Special emphasis is placed on better governance, as it is inextricably linked to improving implementation.

The proposal discusses the main points of the new programme.

(1) Shift from a pure bottom-up approach to a flexible top-down approach: work programmes valid for at least two years will be drawn up by the Commission in consultation with the Member States. These will cover, for example, priorities, allocation of resources between types of funding, and targets for the period. The priorities will not be exhaustive in order to allow applicants to submit proposals in other areas as well and to incorporate new ideas and react to new challenges.

The Commission will be assisted by the Committee for the LIFE Programme for the Environment and Climate Action, which will have a dual nature with different chairs and different compositions depending on whether the issues dealt with are related to the sub-programme for Environment or the sub-programme for Climate Action.

(2) Creation of a new type of projects, “Integrated Projects”: these aim to improve the implementation of environmental and climate policy and their integration into other policies, especially by ensuring a coordinated mobilisation of other Union, national and private funds towards environmental or climate objectives.

Integrated Projects will operate on a large territorial scale (in particular regional, multi- regional, or national, and in a cross-sectoral manner).

· Integrated Projects for the sub-programme for Environment will primarily focus on the implementation of plans and programmes related to the Birds and Habitats Directives, the Water Framework Directive, and waste and air quality legislation.

· For the sub-programme for Climate Action , Integrated Projects may focus on the implementation of mitigation and adaptation strategies and action plans.

(3) Clearer definition of the activities funded for each priority area .

· The sub-programme for Environment consists of three priority areas : (i) the priority area Biodiversity extends its support to developing best practices for wider biodiversity challenges while keeping its focus on Natura2000; (ii) the priority area of Environment and Resource Efficiency shifts its focus towards implementation of Union environmental policy and legislation; (iii) the priority area Governance and Information replaces the former LIFE+ Information and Communication component and will more actively promote the dissemination of knowledge for decision-making and the development of best practices.

· In accordance with the Roadmap for moving to a low-carbon economy in 2050 , the sub-programme for Climate Action should support efforts contributing to three specific priority areas: (i) Climate Change Mitigation, (ii) Climate Change Adaptation and (iii) Climate Governance and Information.

The Commission will ensure synergies between the LIFE Programme and other Union instruments, e.g. it may exploit research and innovation results produced by Horizon 2020 .

(4) Types of funding : the LIFE Programme should cover all types of funding required to address its objectives and priorities: (i) action grants to finance projects; (ii) operating grants for NGOs and other entities of Union interest which are primarily active in the area of environment or climate; (iii) option of using financial instruments; (iv) encouraging the use of green public procurement when implementing action grants.

(5) Enlarged territorial scope : the LIFE Programme (i) allows activities outside the Union in exceptional cases and under specific conditions as well as in countries participating in the programme from outside the Union; (ii) provides a legal basis for cooperation with international organisations of interest to environmental and climate policy that do not necessarily fall within the scope of Union external action.

(6) Simplification : the LIFE Programme will continue improving IT systems to accelerate and facilitate the electronic submission of applications. In order to further facilitate the participation of small stakeholders, such as SMEs or NGOs, special attention will be paid to clear, easily readable and unified application forms, deadlines to allow enough time for submission of applications, assistance with the preparation of applications, and publicly available deadlines to reject or award the project proposal accompanied with clear reasons for rejection.

The proposal also increases the use of flat rates and lump-sums to ease the application and reporting processes, and will lighten reporting requirements for Integrated Projects. Certain costs will no longer be considered eligible (e.g., VAT), and the eligibility of other costs, such as personnel costs related to permanent staff not specifically recruited for the project, might be limited or excluded.

In order to maintain similar levels of support for projects financed by way of action grants as in the LIFE+ Regulation, the co-financing rates should be increased from presently 50% to 70% and in specific cases to 80%, while still ensuring the same leverage effect as today. The higher rate of 80% would apply to Integrated Projects.

(7) Central management : the LIFE Programme should remain centrally managed to maximise policy links, quality of interventions, sound financial management and stable resources, and to ensure that findings of LIFE projects are taken up in shaping Union policy. This is considered as an essential asset by the European Parliament, Member States and stakeholders. The Commission will explore the possibility of delegating the selection and monitoring tasks to the European Agency for Competitiveness and Innovation, while keeping the governance of the LIFE Programme within the Commission.

BUDGETARY IMPLICATIONS: the total financial envelope for the LIFE Programme for the period 2014-2020 expressed in current prices is EUR 3 618 million. Of this amount:

· EUR 2 713.5 million is allocated to the sub-programme for Environment (half of the resources dedicated to projects financed by way of action grants shall be allocated to support the conservation of nature and biodiversity);

· EUR 904.5 million is allocated to the sub-programme for Climate Action.

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.

PURPOSE: to establish a programme for the environment and climate action (LIFE programme) covering the period 1 January 2014 to 31 December 2020.

PROPOSED ACT: Regulation of the European Parliament and of the Council. .

BACKGROUND: in its Communication entitled “ A Budget for Europe 2020 ” (the MFF Communication), in which it recognised the climate change challenge, the Commission stated that it intends to increase the climate related proportion of the Union budget to at least 20% with contribution from different policies. The proposed Regulation should contribute to that goal.

The Commission has decided to address environment and climate action as an integral part of all the main instruments and interventions. This 'mainstreaming' approach implies that environmental and climate objectives need to be reflected in all main instruments to ensure that they contribute to building a low-carbon, resource efficient and climate resilient economy.

However, the main Union funding instruments do not address all environmental and climate specific needs . Furthermore, implementation of environmental and climate legislation remains uneven and inadequate across the Union. This situation requires new and more efficient ways of implementing legislation, as well as development and dissemination of best practices across the Union.

For this reason, and in addition to mainstreaming, the Commission proposes to continue the LIFE Programme currently regulated by the LIFE+ Regulation , and define a more strategic approach with a clearer focus on activities and sectors where LIFE could make a difference.

IMPACT ASSESSMENT: the impact assessment focused on the recommendations from the evaluations and the Court of Auditors aiming to increase the effectiveness and added value of LIFE, while incorporating stakeholders' main concerns and suggestions.

The options to establish priorities analysed in the Impact Assessment try to strike a balance between the need for stability for potential applicants and the need to better focus on Union policy needs. Three scenarios were analysed: (i) status quo, with a pure bottom-up approach partially corrected by the concentration of earmarked resources on climate action; (ii) a flexible top-down approach for all types of projects; (iii) combining the top-down approach for integrated projects and the bottom-up approach for all other types of projects. The preferred option is the flexible top-down approach.

The Impact Assessment analysed options for areas on which Integrated Projects should focus, concluding that Natura 2000, water, waste and air were the sectors with the highest potential for success and where more environmental benefits could be obtained.

Lastly, a strong emphasis was put on simplification to build on the changes undertaken by LIFE+, such as the use of e-proposals. As part of the simplification measures, options for externalisation of most of the management tasks to an existing Executive Agency were also analysed, including full externalisation and a hybrid option.

LEGAL BASIS: Article 192 of the Treaty on the Functioning of the European Union.

CONTENT: this proposal for a new regulation aims to establish the LIFE programme with two sub-programmes , one on the environment and the other on climate action .

The objective of the LIFE Programme is to be a catalyst for promoting implementation and integration of environmental and climate objectives in other policies and Member State practice. Special emphasis is placed on better governance, as it is inextricably linked to improving implementation.

The proposal discusses the main points of the new programme.

(1) Shift from a pure bottom-up approach to a flexible top-down approach: work programmes valid for at least two years will be drawn up by the Commission in consultation with the Member States. These will cover, for example, priorities, allocation of resources between types of funding, and targets for the period. The priorities will not be exhaustive in order to allow applicants to submit proposals in other areas as well and to incorporate new ideas and react to new challenges.

The Commission will be assisted by the Committee for the LIFE Programme for the Environment and Climate Action, which will have a dual nature with different chairs and different compositions depending on whether the issues dealt with are related to the sub-programme for Environment or the sub-programme for Climate Action.

(2) Creation of a new type of projects, “Integrated Projects”: these aim to improve the implementation of environmental and climate policy and their integration into other policies, especially by ensuring a coordinated mobilisation of other Union, national and private funds towards environmental or climate objectives.

Integrated Projects will operate on a large territorial scale (in particular regional, multi- regional, or national, and in a cross-sectoral manner).

· Integrated Projects for the sub-programme for Environment will primarily focus on the implementation of plans and programmes related to the Birds and Habitats Directives, the Water Framework Directive, and waste and air quality legislation.

· For the sub-programme for Climate Action , Integrated Projects may focus on the implementation of mitigation and adaptation strategies and action plans.

(3) Clearer definition of the activities funded for each priority area .

· The sub-programme for Environment consists of three priority areas : (i) the priority area Biodiversity extends its support to developing best practices for wider biodiversity challenges while keeping its focus on Natura2000; (ii) the priority area of Environment and Resource Efficiency shifts its focus towards implementation of Union environmental policy and legislation; (iii) the priority area Governance and Information replaces the former LIFE+ Information and Communication component and will more actively promote the dissemination of knowledge for decision-making and the development of best practices.

· In accordance with the Roadmap for moving to a low-carbon economy in 2050 , the sub-programme for Climate Action should support efforts contributing to three specific priority areas: (i) Climate Change Mitigation, (ii) Climate Change Adaptation and (iii) Climate Governance and Information.

The Commission will ensure synergies between the LIFE Programme and other Union instruments, e.g. it may exploit research and innovation results produced by Horizon 2020 .

(4) Types of funding : the LIFE Programme should cover all types of funding required to address its objectives and priorities: (i) action grants to finance projects; (ii) operating grants for NGOs and other entities of Union interest which are primarily active in the area of environment or climate; (iii) option of using financial instruments; (iv) encouraging the use of green public procurement when implementing action grants.

(5) Enlarged territorial scope : the LIFE Programme (i) allows activities outside the Union in exceptional cases and under specific conditions as well as in countries participating in the programme from outside the Union; (ii) provides a legal basis for cooperation with international organisations of interest to environmental and climate policy that do not necessarily fall within the scope of Union external action.

(6) Simplification : the LIFE Programme will continue improving IT systems to accelerate and facilitate the electronic submission of applications. In order to further facilitate the participation of small stakeholders, such as SMEs or NGOs, special attention will be paid to clear, easily readable and unified application forms, deadlines to allow enough time for submission of applications, assistance with the preparation of applications, and publicly available deadlines to reject or award the project proposal accompanied with clear reasons for rejection.

The proposal also increases the use of flat rates and lump-sums to ease the application and reporting processes, and will lighten reporting requirements for Integrated Projects. Certain costs will no longer be considered eligible (e.g., VAT), and the eligibility of other costs, such as personnel costs related to permanent staff not specifically recruited for the project, might be limited or excluded.

In order to maintain similar levels of support for projects financed by way of action grants as in the LIFE+ Regulation, the co-financing rates should be increased from presently 50% to 70% and in specific cases to 80%, while still ensuring the same leverage effect as today. The higher rate of 80% would apply to Integrated Projects.

(7) Central management : the LIFE Programme should remain centrally managed to maximise policy links, quality of interventions, sound financial management and stable resources, and to ensure that findings of LIFE projects are taken up in shaping Union policy. This is considered as an essential asset by the European Parliament, Member States and stakeholders. The Commission will explore the possibility of delegating the selection and monitoring tasks to the European Agency for Competitiveness and Innovation, while keeping the governance of the LIFE Programme within the Commission.

BUDGETARY IMPLICATIONS: the total financial envelope for the LIFE Programme for the period 2014-2020 expressed in current prices is EUR 3 618 million. Of this amount:

· EUR 2 713.5 million is allocated to the sub-programme for Environment (half of the resources dedicated to projects financed by way of action grants shall be allocated to support the conservation of nature and biodiversity);

· EUR 904.5 million is allocated to the sub-programme for Climate Action.

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.