EU funds in the 2021–2027 financial perspective and the automotive sector
Poland will be the biggest beneficiary of the upcoming European Union financial perspective for 2021–2027. The two main objectives for funding in the new financial perspective, i.e. Smart Europe and Green Europe, are in line with the objectives of the modern automotive sector. Therefore, its players can count on solid support.
The EU budget consists of the traditional multiannual financial framework and the new European Instrument for Reconstruction, financed by the capital markets. The most important element of this instrument is the Recovery and Resilience Facility (RRF), intended to provide an investment boost in the first years of the financial perspective to support economic recovery after the COVID-19 epidemic. The money from the RRF will mainly go towards energy transition, low-carbon transport, and digitalisation.
Opportunities for the automotive sector
The automotive sector is important at least from the perspective of Green Europe, co-implementing the European Green Deal (EGD) vision. The EGD vision is “to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use.”
One of the seven strategic elements to be implemented by the EGD is clean mobility. In turn, fuel cells and alternative fuels are areas identified by the EU where the industrial revolution is expected to occur first. Also, digital technologies and multimodal transport are important tools for achieving the EGD goals, and they are close to the automotive sector. They can also count on support from EU funds in 2021–2027.
Rules for support
Poland is to receive over PLN 776 billion of support (in current prices) for climate projects: PLN 623 billion in grants and PLN 153 billion in loans.
Poland will benefit from EUR 72.2 billion from EU Cohesion Policy funds in the next perspective. This is supplemented by EUR 3.8 billion from the Just Transition Fund, for a total of around EUR 76 billion.
Published on 8 February 2021, the Partnership Agreement is the basic document defining the cooperation between the EU and Poland, i.e. the strategy for the use of European funds agreed with the European Commission. Apart from its strategic character, this document presents the key assumptions of the new financial perspective, indicating the priorities of the cohesion policy for the upcoming years and the areas of planned support from EU funds, which may serve as guidelines for the automotive sector and other industries.
Objectives of the cohesion policy relevant to the automotive sector
The intervention involving European funds in the 2021–2027 perspective will be concentrated around five objectives of the cohesion policy, among which the key objectives from the point of view of the automotive sector are objectives 1 and 2, and indirectly also objective 3.
Objective 1: A more competitive and smarter Europe through promoting innovation and smart economic transformation (c. EUR 11.78 billion)
Funds will be used to support, among other things:
- R&D projects by enterprises and consortia with their participation
- Implementation of the results of R&D work and creation of R&D infrastructure, especially in enterprises
- Investments in SMEs, especially Industry 4.0 solutions
- Growth of exports of innovative products
- Wide-ranging efforts to transform the digital economy.
Objective 2: A greener, low-carbon Europe (c. EUR 20.54 billion)
In particular, this support will be provided to:
- Energy efficiency projects (also at the enterprise level), supporting investments reducing energy consumption, energy recovery in the production process, and the use of energy-efficient technologies
- Production of energy from renewable sources
- Energy infrastructure and smart solutions
- Measures in the field of waste management and effective use of resources
- Measures in the field of low-emission transport and urban mobility.
Objective 3: A more connected Europe (EUR 17.56 billion)
Priorities for this objective include:
- Development of transport infrastructure (road, rail, inland waterway and sea transport, co-modal transport)
- Improving transport accessibility of regions and sub-regions and implementing digital solutions into the Polish transport system
- Investment in broadband networks.
Objective 4: A more social Europe (EUR 14.77 billion)
This objective centres around support for investment in:
- Labour market and human resources development
- Education and competence development
- Social inclusion and integration (in particular, through support to persons threatened by poverty or social exclusion)
- Healthcare (infrastructure, and improving accessibility and quality of health services)
- Culture and tourism.
Objective 5: A Europe closer to citizens (c. EUR 4.75 billion)
Among other things, its tasks include:
- Increasing the influence of local communities in shaping actions aimed at developing territories and addressing their specific problems, especially in regard to development of tourism resources and related services
- Development and promotion of cultural heritage and cultural services
- Promotion of natural heritage and ecotourism
- Physical regeneration and safety of public spaces.
There is also a secondary objective:
Objective 6: Enabling regions and citizens to mitigate social, economic and environmental impacts of the transition towards a climate-neutral economy (EUR 4.23 billion)
This intervention will be implemented only in the provinces of Lower Silesia, Lublin, Łódź, Małopolska, Silesia, and Wielkopolska. Among other things, it will include:
- Support for job creation in sectors other than mining and conventional energy
- Creation and development of innovative companies
- Reclamation and redevelopment of post-mining and post-industrial areas
- Measures to improve air quality.
Operational programmes
According to the Partnership Agreement, these objectives will be implemented through 26 operational programmes, financed by the nearly EUR 76 billion mentioned above.
In particular, continuation of the most popular programmes is planned, i.e.:
- Programme in the field of transport infrastructure, energy, environment, health and culture (implementing objectives 2, 3 and 4 of the cohesion policy) with a projected budget of over EUR 25 billion (successor to the current Infrastructure and Environment Operational Programme)
- Programme in the field of research, development and innovation (implementing objective 1) with a projected budget of nearly EUR 8 billion (successor to the current Smart Growth Operational Programme)
- Programme in the field of development of digitalisation (objectives 1 and 3) with a projected budget of about EUR 2 billion (successor to the current Digital Poland Operational Programme)
- Programme in the field of human capital development (objective 4) with a budget of c. EUR 4.3 billion (successor to the current Knowledge Education Development Operational Programme)
- Programme relating to eastern Poland (objectives 1–4) with a projected budget of c. EUR 2.5 billion (successor to the current Eastern Poland Operational Programme). This will continue to cover the less-developed provinces of eastern Poland (Lublin, Podkarpacie, Podlasie, Świętokrzyskie and Warmia-Masuria) as well as the subregion of Masovia which is in similar condition (a separate NUTS2 statistical unit excluding Warsaw and nine neighbouring counties)
- · 16 regional operational programmes (objectives 1–5), managed by province governments, with a total projected budget of EUR 21.5 billion.
Others among the 26 operational programmes include:
- A new programme to assist the most deprived (Food Aid Operational Programme, so far financed by the Fund for European Aid to the Most Deprived (FEAD), which is outside the scope of the Partnership Agreement)
- A new programme implementing objective 6 (Just Transition Fund)
- Continuation of programmes in the fields of fisheries and maritime (FISH Operational Programme), Interreg and technical assistance.
Evidently, the possibilities are truly wide. Companies from the automotive sector should carefully consider which of their activities may qualify for support under specific programmes.
Joanna Prokurat, tax adviser, Tax practice, Wardyński & Partners
Poland will be the biggest beneficiary of the upcoming European Union financial perspective for 2021–2027. The two main objectives for funding in the new financial perspective, i.e. Smart Europe and Green Europe, are in line with the objectives of the modern automotive sector. Therefore, its players can count on solid support.
The EU budget consists of the traditional multiannual financial framework and the new European Instrument for Reconstruction, financed by the capital markets. The most important element of this instrument is the Recovery and Resilience Facility (RRF), intended to provide an investment boost in the first years of the financial perspective to support economic recovery after the COVID-19 epidemic. The money from the RRF will mainly go towards energy transition, low-carbon transport, and digitalisation.
Opportunities for the automotive sector
The automotive sector is important at least from the perspective of Green Europe, co-implementing the European Green Deal (EGD) vision. The EGD vision is “to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use.”
One of the seven strategic elements to be implemented by the EGD is clean mobility. In turn, fuel cells and alternative fuels are areas identified by the EU where the industrial revolution is expected to occur first. Also, digital technologies and multimodal transport are important tools for achieving the EGD goals, and they are close to the automotive sector. They can also count on support from EU funds in 2021–2027.
Rules for support
Poland is to receive over PLN 776 billion of support (in current prices) for climate projects: PLN 623 billion in grants and PLN 153 billion in loans.
Poland will benefit from EUR 72.2 billion from EU Cohesion Policy funds in the next perspective. This is supplemented by EUR 3.8 billion from the Just Transition Fund, for a total of around EUR 76 billion.
Published on 8 February 2021, the Partnership Agreement is the basic document defining the cooperation between the EU and Poland, i.e. the strategy for the use of European funds agreed with the European Commission. Apart from its strategic character, this document presents the key assumptions of the new financial perspective, indicating the priorities of the cohesion policy for the upcoming years and the areas of planned support from EU funds, which may serve as guidelines for the automotive sector and other industries.
Objectives of the cohesion policy relevant to the automotive sector
The intervention involving European funds in the 2021–2027 perspective will be concentrated around five objectives of the cohesion policy, among which the key objectives from the point of view of the automotive sector are objectives 1 and 2, and indirectly also objective 3.
Objective 1: A more competitive and smarter Europe through promoting innovation and smart economic transformation (c. EUR 11.78 billion)
Funds will be used to support, among other things:
· R&D projects by enterprises and consortia with their participation
· Implementation of the results of R&D work and creation of R&D infrastructure, especially in enterprises
· Investments in SMEs, especially Industry 4.0 solutions
· Growth of exports of innovative products
· Wide-ranging efforts to transform the digital economy.
Objective 2: A greener, low-carbon Europe (c. EUR 20.54 billion)
In particular, this support will be provided to:
· Energy efficiency projects (also at the enterprise level), supporting investments reducing energy consumption, energy recovery in the production process, and the use of energy-efficient technologies
· Production of energy from renewable sources
· Energy infrastructure and smart solutions
· Measures in the field of waste management and effective use of resources
· Measures in the field of low-emission transport and urban mobility.
Objective 3: A more connected Europe (EUR 17.56 billion)
Priorities for this objective include:
· Development of transport infrastructure (road, rail, inland waterway and sea transport, co-modal transport)
· Improving transport accessibility of regions and sub-regions and implementing digital solutions into the Polish transport system
· Investment in broadband networks.
Objective 4: A more social Europe (EUR 14.77 billion)
This objective centres around support for investment in:
· Labour market and human resources development
· Education and competence development
· Social inclusion and integration (in particular, through support to persons threatened by poverty or social exclusion)
· Healthcare (infrastructure, and improving accessibility and quality of health services)
· Culture and tourism.
Objective 5: A Europe closer to citizens (c. EUR 4.75 billion)
Among other things, its tasks include:
· Increasing the influence of local communities in shaping actions aimed at developing territories and addressing their specific problems, especially in regard to development of tourism resources and related services
· Development and promotion of cultural heritage and cultural services
· Promotion of natural heritage and ecotourism
· Physical regeneration and safety of public spaces.
There is also a secondary objective:
Objective 6: Enabling regions and citizens to mitigate social, economic and environmental impacts of the transition towards a climate-neutral economy (EUR 4.23 billion)
This intervention will be implemented only in the provinces of Lower Silesia, Lublin, Łódź, Małopolska, Silesia, and Wielkopolska. Among other things, it will include:
· Support for job creation in sectors other than mining and conventional energy
· Creation and development of innovative companies
· Reclamation and redevelopment of post-mining and post-industrial areas
· Measures to improve air quality.
Operational programmes
According to the Partnership Agreement, these objectives will be implemented through 26 operational programmes, financed by the nearly EUR 76 billion mentioned above.
In particular, continuation of the most popular programmes is planned, i.e.:
· Programme in the field of transport infrastructure, energy, environment, health and culture (implementing objectives 2, 3 and 4 of the cohesion policy) with a projected budget of over EUR 25 billion (successor to the current Infrastructure and Environment Operational Programme)
· Programme in the field of research, development and innovation (implementing objective 1) with a projected budget of nearly EUR 8 billion (successor to the current Smart Growth Operational Programme)
· Programme in the field of development of digitalisation (objectives 1 and 3) with a projected budget of about EUR 2 billion (successor to the current Digital Poland Operational Programme)
· Programme in the field of human capital development (objective 4) with a budget of c. EUR 4.3 billion (successor to the current Knowledge Education Development Operational Programme)
· Programme relating to eastern Poland (objectives 1–4) with a projected budget of c. EUR 2.5 billion (successor to the current Eastern Poland Operational Programme[CS1] ). This will continue to cover the less-developed provinces of eastern Poland (Lublin, Podkarpacie, Podlasie, Świętokrzyskie and Warmia-Masuria) as well as the subregion of Masovia which is in similar condition (a separate NUTS2 statistical unit excluding Warsaw and nine neighbouring counties)
· 16 regional operational programmes (objectives 1–5), managed by province governments, with a total projected budget of EUR 21.5 billion.
Others among the 26 operational programmes include:
· A new programme to assist the most deprived (Food Aid Operational Programme, so far financed by the Fund for European Aid to the Most Deprived (FEAD), which is outside the scope of the Partnership Agreement)
· A new programme implementing objective 6 (Just Transition Fund)
· Continuation of programmes in the fields of fisheries and maritime (FISH Operational Programme), Interreg and technical assistance.
Evidently, the possibilities are truly wide. Companies from the automotive sector should carefully consider which of their activities may qualify for support under specific programmes.
Joanna Prokurat, tax adviser, Tax practice, Wardyński & Partners
[CS1]In the PL: this should be PO PW not PO PWO
