A mistake to avoid: setting weak decarbonisation criteria for subsidies to investment in SME productivity improvements

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Narrative

Topic: Subsidies for SMEs that invest in new machinery to improve productivtiy and competitiveness, as well as energy and material efficiency.

While this public tender at first glance seems to be a good practice and has the potential to contribute to decarbonisation, the environmental criteria are vastly insufficient and only represent 25% of the possible points of this tender. In particular, the requirements to improve energy efficiency and material efficiency by just 10% do not go much beyond 'business as usua'l and potentially even lock in carbon-intensive production processes. The lack of ambition in this tender is further highlighted by the fact that the condition of 10% material-efficiency improvement is already fulfilled if 10% of the final product is recyclable.

Finally, it is highly questionable as to how applications for investments that are made within the area of the country's only national park will benefit from 10% bonus points.

Financial data

Funding: EUR 30 million out of of a total of EUR 2,482 million in recovery funding

Recommendations

The main reccomendation is to maintain some of the environmental criteria (e.g., the 'Do No Significant Harm' principle, ISO 14001, ISO 50001, Environmental Action Plan), while assigning more points for the core criteria on carbon and material intensity and making these criteria much more stringent.