Strategic Technologies for Europe Platform: provisional agreement to boost investments in critical technologies

The Council presidency and European Parliament negotiators have reached a provisional agreement on the Strategic Technologies for Europe Platform (STEP).

The platform will mobilise investments in the fields of digital and deep tech, cleantech and biotech, with the overall aim of strengthening the EU’s sovereignty and long-term competitiveness in critical technologies.

Through a mix of financial incentives and measures to facilitate the financing of projects, it will leverage funding in support of critical technologies under existing EU programmes and funds, including cohesion policy funds, InvestEU, Horizon Europe, the European Defence Fund, the Innovation Fund and the Recovery and Resilience Facility.

In order to boost defence investment capacity, an additional €1.5 billion will be allocated to the European Defence Fund.

“In light of evolving geopolitical realities, the EU must step up its game on critical technologies. With today’s agreement, we will pool funding from the EU budget to mobilise investments in deep and digital tech, cleantech, and biotech, which are crucial for the EU to preserve its competitive edge in these strategic sectors.”
Hadja LAHBIB, Minister for Foreign Affairs, European Affairs and Foreign Trade and Federal Cultural Institutions

Scope of support
During the negotiations, the co-legislators clarified the scope of investments covered by STEP. Taking into consideration the differences between the member states, they have agreed to ensure support to the whole value chain of critical technologies, as proposed by the Commission, as well as to associated services.

The Commission has been asked to issue guidance on how technologies will be assessed as critical for the purposes of STEP investments.

Sovereignty Seal and Sovereignty Portal
Under STEP, a Sovereignty Seal will be awarded to projects contributing to STEP objectives as a quality label helping them to access EU funding and attract other investments.

A Sovereignty Portal will also be set up as a one-stop-shop on funding opportunities for STEP-related projects.

During the negotiations, the Council and the Parliament have clarified the role of the Commission in implementing the platform and underlined its role in promoting the Sovereignty Seal and enhancing the visibility of the projects that have been awarded this quality label.

Use of cohesion policy funds
An important element of STEP are financial incentives for channelling cohesion policy funds towards investments in critical technologies. This will help all member states to develop their capacities and contribute to a level playing field for investments in critical technologies in the single market.

For this purpose, a 100% co-financing rate and a 30% pre-financing rate will apply for STEP priorities under the 2021–2027 programming period. Investments in large companies will also be possible.

Considering the continued budgetary pressure in member states, a 100% co-financing rate will also be applied retroactively to the 2014–2020 cohesion programmes in the final accounting year, while the deadline for submitting payment applications will be extended by 12 months.

To further encourage the uptake of STEP under cohesion policy funds, the co-legislators have also given member states more flexibility to reach climate targets under the European Regional Development Fund (30%) and the Cohesion Fund (37%) by counting ‘excess projects’ under one fund towards the target of the other. At the same time, a 20% cap will apply to STEP investments from the European Regional Development Fund, to ensure the continued focus of this fund on its original objectives.

Member states will have the possibility to amend programmes – and consequently Partnership Agreements – in 2024 through an expedited procedure, with a view to receiving pre-financing for STEP-related projects as early as this year, in addition to further amendments in 2025 within the timeline of the mid-term review.

Evaluation of the platform
The EU co-legislators have also asked the Commission to provide them with an interim evaluation report on the implementation of STEP by the end of 2025, as a basis for preparing new interventions to support sovereignty and competitiveness in strategic sectors in the future.

Next steps
The provisional agreement now needs to be endorsed by the Council and the Parliament before legal-linguistic revision and formal adoption by both institutions.

Once adopted, the regulation establishing STEP will be published in the EU’s Official Journal and enter into force on the next day.

The Commission proposed the creation of a Strategic Technologies for Europe Platform on 20 June 2023 as part of its package of proposals related to the mid-term revision of the multiannual financial framework 2021–2027.

The package also included a proposal for the creation of the Ukraine Facility, on which the co-legislators reached a provisional agreement earlier this week.

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