# EUR-Lex - 52013PC0496 - EN

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# 52013PC0496

**Proposal for a COUNCIL REGULATION on the Bio-Based Industries Joint Undertaking /* COM/2013/0496 final - 2013/0241 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

General context

One of the main aims of Horizon 2020, the
Framework Programme for Research and Innovation covering the period 2014-2020,
is to strengthen European industry through actions supporting research and
innovation across a range of industrial sectors. In particular, it provides for
the creation of public-private partnerships that will contribute to tackling
some of the key challenges Europe is facing.

Bio-based industries in the EU could make a
significant contribution to the objectives of the Europe 2020 Strategy, and its
flagship initiatives "Innovation Union", "A Resource Efficient
Europe" and "An Industrial Policy for the Globalisation Era".
This has been recognised in several recent EU policy initiatives, such as the
European Innovation Partnership for Agricultural Productivity and
Sustainability[1],
the Smart Specialisation Strategy for Member States and Regions[2] and the proposal for the 7th
Environmental Action Programme. The Communication outlining the European
Bioeconomy Strategy, adopted on 13 February 2012[3]
proposes the creation of a Public-Private Partnership (PPP) for bio-based industries
(Bio-based PPP) as part of its Action Plan. The Commission Communication
promoting a stronger European industry for growth and economic recovery[4] reiterates the importance of
setting up a Bio-based PPP in the form of a Joint Technology Initiative (JTI)
in the context of the EU's industrial policy, which is also in line with the
Commission Communication "Public-private partnerships, in Horizon 2020: a
powerful tool to deliver on innovation and growth in Europe"[5].

The Committee
of the Regions has also underlined the important role of bio-based products and
a bio-based society in Europe in its opinion on the European Bioeconomy
Strategy end of November 2012[6].
In view of broader economic and social sustainability issues and of
implications for consumers, the Commission is currently studying biofuels from
a consumer perspective as a part of a broader study on the functioning of the
fuels market[7].

Reasons and objectives for a JTI in
the area of bio-based industries

Bio-based industries are industries, which
use renewable biological resources for the production of bio-based products and
biofuels. Production usually takes place in biorefineries and often relies on
bio-based processes. They give rise to new value chains, linking previously
unrelated primary producers (and e.g. managers of organic waste) and
industries, thus opening new opportunities for a wide range of established
players. An increasing number of processing industries, such as the chemical,
biofuels, pulp and paper, sugar and starch, and technology providers (in
particular on industrial biotechnology and engineering) are interested in
moving partially or entirely towards sustainable renewable bio-based resources
and/or products.

The main focus of this JTI will be on the transformation
of non-edible parts of plants (e.g. wood, agricultural and forestry residues)
and biodegradable wastes into bio-based products and biofuels. The non-edible
part of plants, also referred to as ligno-cellulosic material, is usually
heterogeneous and contains a mix of different types of complex biomolecules
(i.e. cellulose, hemi-cellulose and lignin). The technology required for transforming
ligno-cellulosic material is considered "more advanced" compared to
current technologies converting edible parts of plants, and is still being developed.
The resulting products and processes are therefore called "advanced".

Bio-based industries are a cornerstone of
the EU bioeconomy in generating growth and jobs. Although bio-based products
and biofuels currently only represent about 3% of the EUR 2 trillion in annual
turnover and 1% of the 22 million jobs generated by the European bioeconomy
today[8],
bio-based industries are expected to grow more rapidly and substantially than
more traditional bioeconomy sectors[9],[10]. Estimates from
different sources consider that:

·
The global revenue potential of the entire
biomass value chain for biorefineries could exceed EUR 200 billion by 2020[11];

·
The share of bio-based processes in all chemical
production taken on its own is likely to increase from less than 2% in 2005 to
25% in 2025[12];

·
The volume growth of EU bio-based chemical
products (including bio-plastics, bio-lubricants, bio-solvents, bio-surfactants
and chemical feedstock) will be at 5.3% per year up to 2020, resulting in a
market worth EUR 40 billion and 90,000 jobs within the bio-chemical industry
alone[13];

·
Up to 75 billion litres of bioethanol could be
sustainably produced at a competitive cost by 2020, which would represent about
EUR 15 billion in additional revenue for the agricultural sector[14].

To realise this potential and ensure the
competitiveness of Europe's bio-based industries and their value chains in
global markets, a number of hurdles need to be overcome:

·
Biomass feedstock will need to be sourced in
Europe in a sustainable way and without unintended negative consequences, such
as loss of biodiversity, indirect land use change (ILUC) or negative effects
for food security.

·
Different players, including agriculture and
forestry, industries and waste managers need to set-up cooperations along full
value chains, with the aim of increasing resource-use efficiency by reducing
the current fragmentation and isolation of these sectors.

·
New processes need to be developed to separate,
pre-treat and convert this feedstock into bio-based products and biofuels. A
wide range of radically different technological options (e.g. enzyme based
versus thermochemical processes) will need to be taken forward simultaneously
in a strong and multi-facetted research effort to enhance process efficiency
and optimise yield.

·
Significant investment in up-scaling of
technology and infrastructure is needed to assess the relative merits of
radically different technology options and to identify winning option(s). This
will mean upgrading existing bio-based industries (e.g. pulp and paper mills,
biofuels, starch, chemical, etc.) and developing new and scalable integrated
biorefinery models.

·
The successful uptake of new bio-based products
and bioenergy/fuels would require developing standards, labelling and
certification systems and achieving customer acceptance. Product prices should
appropriately reflect externalities and consumers should be able to make
informed product choices, e.g. based on data on the benefits of these products
over the full product lifecycle from cradle to grave.

The bio-based industry value chains
(ranging from primary production, biorefineries, industrial users to consumer
brands) are complex and so are the technological and innovation challenges that
need to be overcome to unlock its socio-economic and environmental potential.
Only a strong strategic vision, a well-structured and defined research and
innovation agenda and a long-term stable financial commitment can bring
together in one programme the different competences from across Europe to achieve the necessary breakthroughs and provide sufficient certainty and critical
mass to leverage significant private investments.

The objectives of the proposed JTI on
bio-based industries are to:

·
Contribute to a more resource efficient and
sustainable low-carbon economy and to increasing economic growth and
employment, in particular in rural areas, by developing sustainable and
competitive bio-based industries in Europe, based on advanced biorefineries
that source their biomass sustainably; and in particular to:

·
Demonstrate technologies that enable new
chemical building blocks, new materials, and new consumer products from
European biomass, which replace the need for fossil-based inputs;

·
Develop business models that integrate economic
actors along the value chain from supply of biomass to biorefinery plants to
consumers of bio-based materials, chemicals and fuels, including through
creating new cross-sector interconnections and supporting cross-industry
clusters; and

·
Set-up flagship biorefinery plants that deploy
the technologies and business models for bio-based materials, chemicals and
fuels and demonstrate cost and performance improvements to levels that are
competitive with fossil-based alternatives.

Building on past experience

The EU has funded a wide range of projects
that contribute to the advancement of bio-based industries over the past
decades. The EU Framework Programmes for Research and Technological Development
(FPs) cover almost 6% of total R&D investment of the EU and 15% of European
publicly funded R&D financed in a cross-border collaborative manner. Under
the FP7 Specific Programme on "Cooperation", Theme 2 "Food,
Agriculture and Fisheries, Biotechnology" is currently financing 100
projects in the area of biotechnology with an EU contribution of about EUR 400
million.

In view of the multidisciplinary nature of
biorefineries, DG RTD organised a Joint Call in 2008 on biorefineries involving
four Themes of the "Cooperation" Programme (Theme 2, Theme 5, Theme 4
"Nanosciences, Nanotechnologies, Materials and New Production
Technologies, and Theme 6 "Environment"). Three flagship
collaborative projects (BIOCORE, EUROBIOREF and SUPRABIO) were selected for
funding in 2009 with a combined EU contribution of about EUR 50 million.

The experience of the past years confirms
that Europe has a strong research base in the area of bio-based industries with
some successful biorefinery plant projects, both at EU level and at regional
and national level.

Funding mechanisms applied at EU and
regional level, in particular large and integrated biorefinery projects and
regional bioeconomy clusters, are a step in the right direction by applying a
value chain approach that covers research, demonstration and deployment
activities and encourages cross-border collaboration. Yet, they have not
succeeded in reaching a critical mass sufficient to overcome fragmentation and
create integrated bio-based industry value chains in Europe. The impact of
either funding mechanism could have been even better if they had been part of
an integrated long-term vision for bio-based industries and if more support was
given to demonstration and deployment activities.

2.           RESULTS OF CONSULTATIONS
WITH INTERESTED PARTIES AND IMPACT ASSESSMENTS

A wide range of sources were consulted in
preparation of this JTI:

·
A public consultation on the proposed Bio-based
PPP took place from 21 September to 14 December 2012 and received 638 valid
responses. 64.6% of responses came from the private sector, 24.6% from academia,
8.8% from the public sector and 2% from NGOs. Responses were received from 19
out of 27 Member States, with most replies coming from Poland, followed by the
Netherlands, Germany, Spain, France, Belgium, Sweden, Finland, Italy, Austria,
the UK, Romania, the Czech Republic, Portugal, Denmark, Ireland, Hungary,
Greece and Slovakia. Almost all respondents (94.3%) called for EU intervention
and 86.9% viewed a PPP as the most appropriate mechanism to implement the
R&I programme for bio-based industries under Horizon 2020, and considered
that it would have positive socio-economic impacts. Other key messages were the
need to strengthen EU innovation, to improve competitiveness and to formulate
clear intervention objectives for bio-based industries. The results from the
consultation were presented and discussed at a stakeholder event on 9 January
2013 in Brussels, which was attended by 162 people. The full report of the
online public consultation forms part of the Impact Assessment; it is planned
to publish a printed version in June 2013.

·
Several events organised in the framework of the
Bioeconomy Strategy implementation allowed for regular and broad-based contacts
with stakeholders during the preparation of the Impact Assessment . This
included the conference "Partnering for the Bioeconomy in European
Regions" of 12 October 2012, co-organised by DG RTD and the Committee of
the Regions. During the conference, information on the potential of a Bio-based
PPP was provided and examples of regional activities highlighted possible
benefits of bioeconomy partnerships. DG REGIO specifically informed conference
participants about the Smart Specialisation Strategy, being part of the rural
development policy of the EU. It proposed focusing investments on the
bioeconomy where appropriate.

·
Several studies conducted in connection with the
bioeconomy, bio-based products and biofuels were consulted.

·
A group of ten external reviewers with expertise
relevant to the different parts of the bio-based industries value chain was brought
in to assist DG RTD with collecting and analysing the above data and preparing
the Impact Assessment.

Impact
Assessment

The proposed Regulation is supported by a Commission
Impact Assessment, which is accompanying the proposal.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

Summary of the proposed action

This proposal concerns setting-up the Bio-based
Industries Joint Undertaking (BBI JU) under Article 187 of the Treaty on the Functioning
of the European Union (TFEU) for the implementation of the Joint Technology
Initiative on Bio-based Industries (BBI JTI).

The BBI JU should be established for a period
ending on 31 December 2024. It will have its seat in Brussels, Belgium.

It will be founded by the EU, represented
by the European Commission, and the Biobased Industries Consortium (BIC). The
activities of the BBI JU will be jointly funded by its founders. The Commission
and BIC will contribute in equal parts to the running costs of the BBI JU. The
research and demonstration activities will be funded through contributions by
the BIC member companies with monetary and non-monetary resources (staff,
equipment, consumables, etc.), and monetary resources from the EU. The level of
EU resources will vary, in line with Horizon 2020 rules, depending on the type
of activity considered.

The BBI JU will be open to new members,
provided that they contribute with resources to the achievements of the
objectives.

The Commission will be represented in the
Governing Board in rights and votes as the industrial BIC members.

Legal basis

The legal basis of the proposal is Article
187 of the TFEU.

The Rules for Participation and
Dissemination of Horizon 2020 will apply. However, given a specific operational
need of this initiative, a derogation from these Rules is necessary.
Nevertheless, this specific derogation is not included in the present proposal
at this stage, in order not to prejudice the inter-institutional discussions
concerning the appropriate legal basis/procedural modalities for their
adoption, which are still pending in the context of the legislative works
concerning the Commission proposal for a Regulation of the European Parliament
and of the Council laying down the Rules for Participation and dissemination in
Horizon 2020 (COM(2011) 0810 - 2011/0399 (COD). The specific derogation will be
introduced at a later stage in view of the outcome of the abovementioned
discussions.

The derogation will allow to limit, for
actions other than innovation actions, the eligibility for funding to entities
such as SMEs or secondary and higher education establishments whilst achieving
at the same time the optimal level of leverage effect on private investment.

Subsidiarity and proportionality

The proposal concerns an area in which the EU
does not have exclusive competence, which is why the principle of subsidiarity
applies.

The policy objectives underlying the
proposal can only be achieved through EU action for the following main reasons:

(1)
The transnational and complex nature of this
large research and innovation challenge identified, which requires pooling
complementary knowledge and financial resources across sectors and borders. No
single Member State, company or stakeholder can resolve the problem by itself.

(2)
The coordination effort and the resources
required are of such a large scale that they can only be credibly implemented
at European level.

(3)
Given similar and competing initiatives underway
or being launched in other leading economies (US, Brazil, China, Canada), only
large-scale action implemented at European level is sufficiently attractive for
industries to invest in Europe.

In accordance with the principle of
proportionality, the provisions of this Regulation do not go beyond what is
necessary to achieve the objectives.

Choice
of instrument

The proposed Regulation will significantly
boost public and private investment in research and innovation activities that aim
to improve the competitiveness of European bio-based industries and create
employment, in particular in rural areas. The BBI JU can leverage private
resources with EU funds at a level that cannot be achieved with traditional
instruments, which lack the strategic long-term approach regarding programming
and financing. Every EUR 1 of EU funds will leverage EUR 2.8 of private funds
during the operation of the Joint Undertaking.

4.           BUDGETARY IMPLICATION

The total budget of the BBI JU will be EUR 2
000 million (including in cash and in kind contributions). In addition, the
industry has committed to invest EUR 1 800 million in the establishment of
large demonstration and flagship plants contributing to the objectives of this
JTI.

The maximum contribution from the European
Union (including EFTA) will be EUR 1 000 million[15], paid from the Horizon 2020
budget.

The running costs of the BBI JU will be
covered in equal parts by the EU and the BIC from the outset. The administrative
costs shall not exceed EUR 60 million for the duration of the JU.

The research and demonstration activities
implemented by the BBI JU and eligible for co-funding under Horizon 2020 will
be jointly funded by the EU and BIC.

5.           OPTIONAL ELEMENTS

Review

The EU will present an annual report on the
progress made by the BBI JU and will perform a mid-term review by 31 December
2017. Discharge for the implementation of the EU contribution shall be part of
the discharge given by the European Parliament, upon recommendation of the
Council, to the Commission in accordance with the procedure provided for in
Article 319 of the TFEU.

2013/0241 (NLE)

Proposal for a

COUNCIL REGULATION

on the Bio-Based Industries Joint
Undertaking

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 187 and the first
paragraph of Article 188 thereof,

Having regard to the proposal from the
European Commission,

Having regard to the opinion of the
European Parliament[16],

Having regard to the opinion of the
Economic and Social Committee[17],

Whereas

(1)       Public-private partnerships
in the form of Joint Technology Initiatives were initially provided for in Decision
(EC) No 1982/2006 of the European Parliament and of the Council of 18 December
2006 concerning the Seventh Framework Programme of the European Community for
research, technological development and demonstration activities (2007-2013)[18].

(2)       Council Decision 2006/971/EC
of 19 December 2006 concerning the Specific Programme ‘Cooperation’
implementing the Seventh Framework Programme of the European Community for
research, technological development and demonstration activities (2007-2013)[19] identified specific
public-private partnerships to be supported.

(3)       Regulation (EU) No .../2013
of the European Parliament and of the Council of ... 2013 establishing Horizon
2020 - The Framework Programme for Research and Innovation (2014-2020)[20] aims to achieve a greater
impact on research and innovation by combining Horizon 2020 Framework Programme
and private-sector funds in public-private partnerships in key areas where
research and innovation can contribute to the Union's wider competitiveness
goals and help tackle societal challenges. The involvement of the Union in those partnerships may take the form of financial contributions to joint
undertakings established on the basis of Article 187 of the Treaty under
Decision No 1982/2006/EC

(4)       In accordance with Decision
(EU) No .../2013 of the Council of ... 2013 establishing the Specific Programme implementing
Horizon 2020 (2014-2020)[21] support may be provided to joint
undertakings established in the Horizon 2020 Framework Programme under the
conditions specified in that Decision.

(5)       Europe 2020 Strategy[22] underscores the need to
develop favourable conditions for investment in knowledge and innovation so as
to achieve smart, sustainable and inclusive growth in the Union. Both European Parliament and Council have endorsed this strategy.

(6)       The Bio-based Industries
Consortium (hereinafter "BIC") developed a vision paper and a
Strategic Innovation and Research Agenda, based on extensive consultation with public
and private stakeholders. The Strategic Innovation and Research Agenda
describes the main technological and innovation challenges that need to be
overcome in order to develop sustainable and competitive bio-based industries
in Europe and identifies research, demonstration and deployment activities to
be carried out by a Joint Technology Initiative on "Bio-based
Industries".

(7)       BIC is a non-profit
organisation that was created to represent the industry group that supports the
Joint Technology Initiative on Bio-based Industries. Its members cover the
entire bio-based value chain and consist of large industries, small and
medium-sized enterprises (SMEs), regional clusters, European trade
associations, and European Technology Platforms. The aim of BIC is to ensure
and promote the technological and economic development of the bio-based
industries in Europe. Any interested stakeholders along the bio-based value
chain may apply for membership. It applies general principles of openness and
transparency regarding membership, ensuring a wide industrial involvement.

(8)       The Commission
Communication of 13 February 2012 "Innovating for Sustainable Growth: A
Bioeconomy for Europe"[23]
and in particular its Action Plan calls for a public private partnership to
support the establishment of sustainable and competitive bio-based industries
and value chains in Europe. In view of moving towards a post-petroleum society,
the Communication aims to integrate better biomass producing and processing
sectors in order to reconcile food security and natural resource scarcity and
environmental objectives with the use of biomass for industrial and energy
purposes.

(9)       The Commission
Communication of 10 October 2012 "A Stronger European Industry for Growth
and Economic Recovery"[24] confirms the strategic importance of
bio-based industries for the future competitiveness of Europe, as identified in
the Commission Communication of 21 December 2007 "A lead market initiative
for Europe"[25]
and stresses the need for a Joint Technology Initiative on "Bio-based
Industries".

(10)     Bio-based industries and
their value chains are facing complex and substantial technology and innovation
challenges. As a nascent sector, bio-based industries have to overcome the
dispersion of technical competences and the limited publically available data
on real resource availability in order to build sustainable and competitive
value chains. In order to tackle these challenges, critical mass has to be
achieved in a focused and coherent way at European level in terms of scale of
activity, excellence, and potential for innovation.

(11)     The Joint Technology
Initiative on Bio-based Industries should mitigate the different types of
market failures that discourage private investment into pre-competitive
research, demonstration and deployment activities for bio-based industries in Europe. In particular, it should ascertain the availability of reliable biomass supply
taking into account other competing social and environmental demands, and
support the development of advanced processing technologies, large scale
demonstration activities and policy instruments, thus reducing the risk for
private research and innovation investment in the development of sustainable
and competitive bio-based products and biofuels.

(12)     The Joint Technology
Initiative on Bio-based Industries should be a public-private partnership
aiming at increasing investment in the development of a sustainable bio-based
industry sector in Europe. It should provide environmental and socio-economic
benefits for European citizens, increase the competitiveness of Europe and
contribute to establishing Europe as a key player in research, demonstration
and deployment of advanced bio-based products and biofuels.

(13)     The objective of the Joint
Technology Initiative on Bio-based Industries is to implement a programme of
research and innovation activities in Europe that will assess the availability
of renewable biological resources that can be used for the production of
bio-based materials and on that basis support the establishment of sustainable
bio-based value chains. These activities should be carried out through
collaboration between stakeholders along the entire bio-based value chains, including
primary production and processing industries, consumer brands, SMEs, research
and technology centres and universities.

(14)     The ambition and scope of
the objectives of the Joint Technology Initiative on Bio-based Industries, the
scale of the financial and technical resources that need to be mobilized, and
the need to achieve effective coordination and synergy of resources and
funding, require the involvement of the Union. Therefore a Joint Undertaking
for the implementation of the Joint Technology Initiative on Bio-based
Industries (hereinafter the BBI Joint Undertaking) should be established as a
legal entity.

(15)     The objective of the BBI
Joint Undertaking should be achieved through support of research and innovation
activities by using resources from the public and private sectors. To this end,
the BBI Joint Undertaking should organise calls for proposals for supporting
research, demonstration and deployment activities.

(16)     To achieve maximum impact,
the Bio-Based Industries Joint Undertaking should develop close synergies with
other Union programmes in areas such as education, environment, competitiveness
and SMEs, and with the Cohesion Policy funds and Rural Development Policy,
which can specifically help to strengthen national and regional research and
innovation capabilities in the context of smart specialisation strategies.

(17)     The founding members of the
BBI Joint Undertaking should be the Union and BIC.

(18)     The rules for the
organisation and operation of the BBI Joint Undertaking should be laid down in
the Statutes of the BBI Joint Undertaking as part of this Regulation.

(19)     BIC has expressed, in
writing, its agreement to pursue the research activities in the area of the BBI
Joint Undertaking within a structure well adapted to the nature of a
public-private partnership. It is appropriate that BIC accedes to the Statutes
set out in Annex to this Regulation by signing a letter of endorsement.

(20)     In order to achieve its
objectives, the BBI Joint Undertaking should provide financial support mainly in
the form of grants to participants following open and competitive calls for
proposals.

(21)     Contributions from the
private Members should not only be limited to the administrative costs of the
BBI Joint Undertaking and to the co-financing required to carry out research
and innovation actions supported by the BBI Joint Undertaking.

(22)     Their contributions should
also relate to additional activities to be undertaken by the private Members,
as specified in an additional activities plan; in order to get a proper
overview of the leverage effect those additional activities should represent
contributions to the broader Joint Technology Initiative on Bio-Based
Industries.

(23)     Participation in indirect
actions funded by the BBI Joint Undertaking should comply with Regulation (EU)
No ... /2013 of the European Parliament and of the Council of ... 2013 laying down
the rules for participation and dissemination in "Horizon 2020 - the
Framework Programme for Research and Innovation (2014-2020)"[26].

(24)      The Union
financial contribution to the BBI Joint Undertaking should be managed in accordance
with the principle of sound financial management and with the relevant rules on
indirect management set out in Regulation (EU, Euratom) No 966/2012 and
Commission delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the
rules of application of Regulation (EU, Euratom) No 966/2012[27].

(25)     Audits of recipients of Union
funds under this Regulation should be carried out in such a manner that the administrative
burden is reduced, in compliance with Regulation (EU) No .../2013 [the Horizon
2020 Framework Programme].

(26)     The financial interests of
the Union and of the other members of the BBI Joint Undertaking should be
protected through proportionate measures throughout the expenditure cycle including
the prevention, detection and investigation of irregularities, the recovery of
funds lost, wrongly paid or incorrectly used and, where appropriate,
administrative and financial penalties in accordance with Regulation (EU,
Euratom) No 966/2012.

(27)     The Commission's internal
auditor should exercise the same powers over the BBI Joint Undertaking as those
exercised in respect of the Commission.

(28)     In accordance with Article 287(1)
of the Treaty, the constituent instrument of bodies, offices or agencies set up
by the Union may preclude the examination of the accounts of all revenue and
expenditure of those bodies, offices or agencies by the Court of Auditors. In
accordance with Article 60(5) of Regulation (EU, Euratom) No 966/2012, the
accounts of the bodies under Article 209 Regulation (EU, Euratom) No 966/2012 are
to be examined by an independent audit body which is to give an opinion inter
alia on the reliability of the accounts and the legality and regularity of the
underlying transactions. Avoidance of duplication of the examination of the
accounts justifies that the accounts of the BBI Joint Undertaking should not be
subject to examination by the Court of Auditors.

(29)     In order to facilitate its establishment,
the Commission should be responsible for the establishment and initial
operation of the BBI Joint Undertaking until it has the operational capacity to
implement its own budget.

(30)     In accordance with the
principles of subsidiarity and proportionality as set out in Article 5 of the
Treaty on European Union, the objectives of the BBI Joint Undertaking in strengthening
industrial research and innovation across the Union cannot be sufficiently
achieved by the Member States and can therefore, by reason of avoiding
duplication, retaining critical mass and ensuring that public financing is used
in an optimal way, be better achieved by the Union; this Regulation confines
itself to the minimum required in order to achieve those objectives and does
not go beyond what is necessary for that purpose.

HAS ADOPTED THIS REGULATION:

Article 1

Establishment

1.           For the implementation of
the Joint Technology Initiative on Bio-Based Industries, a joint undertaking
within the meaning of Article 187 of the Treaty (hereinafter "BBI Joint
Undertaking"), is established for a period from 1 January 2014 until 31
December 2024.

2.           The BBI Joint Undertaking shall
constitute a body entrusted with the implementation of a public-private
partnership referred to in Article
209 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and the
Council[28].

3.           The BBI Joint Undertaking shall have legal personality. In each of the
Member States, it shall enjoy the most extensive legal capacity accorded to
legal persons under the laws of those Member States. It may, in particular,
acquire or dispose of movable and immovable property and may be party to legal
proceedings.

4.           The seat of the BBI Joint
Undertaking shall be located in Brussels, Belgium.

5.           The Statutes of the BBI
Joint Undertaking are set out in the Annex.

Article 2

Objectives

The BBI Joint Undertaking shall have the
following objectives:

(a)
to contribute to the implementation of
Regulation (EU) No .../2013 of the European Parliament and of the Council of
....2013 establishing the Horizon 2020 Framework Programme and in particular part
... of Decision No ... /2013 EU of the Council of ...2013 establishing the Horizon
2020 Specific Programme.

(b)
to contribute to the objectives of the Biobased
Industries Joint Technology Initiative for a more resource efficient and
sustainable low-carbon economy and increasing economic growth and employment,
in particularly in rural areas, by developing sustainable and competitive
bio-based industries in Europe based on advanced biorefineries that source
their biomass sustainably; and in particular to:

(c)
demonstrate technologies that enable new
chemical building blocks, new materials, and new consumer products from
European biomass and which replace the need for fossil based inputs;

(d)
develop business models that integrate economic
actors along the whole value chain from supply of biomass to biorefinery plants
to consumers of bio-based materials, chemicals and fuels, including through
creating new cross-sector interconnections and supporting cross-industry
clusters; and

(e)
set up flagship biorefinery plants that deploy
the technologies and business models for bio-based materials, chemicals and
fuels and demonstrate cost and performance improvements to levels that are
competitive with fossil based alternatives.

Article 3

Union financial contribution

1.           The maximum Union
contribution, including EFTA appropriations to the BBI Joint Undertaking to
cover administrative costs and operational costs shall be EUR 1 000 million.
The contribution shall be paid from the appropriations in the general budget of
the Union allocated to the Horizon 2020 Specific Programme implementing the
Horizon 2020 Framework Programme in accordance with the relevant provisions of Article
58(1)(c)(iv) and Articles 60 and 61 of Regulation (EU, Euratom) No 966/2012 for
bodies referred to in Article 209 of that Regulation.

2.           The arrangements for the
Union financial contribution shall be set out in a delegation agreement and annual
transfer of funds agreements to be concluded between the Commission, on behalf
of the Union, and the BBI Joint Undertaking.

3.           The delegation agreement
referred to in paragraph 2 shall address the elements set out in Article 58(3)
and Articles 60 and 61 of Regulation (EU, Euratom) No 966/2012 and in Article 40
of Commission delegated Regulation (EU) No 1268/2012 as well as inter alia the
following:

(a)     the requirements for the BBI Joint
Undertaking's contribution regarding the relevant performance indicators
referred to in Annex II to Decision No .../EU [the Specific Programme
implementing the Horizon 2020 Framework Programme];

(b)     the requirements for the BBI Joint
Undertaking's contribution in view of the monitoring referred to in Annex III
to Decision No .../EU [the Specific Programme implementing the Horizon 2020
Framework Programme];

(c)     the specific performance indicators
related to the functioning of the BBI Joint Undertaking;

(d)     the arrangements regarding the provision
of data necessary to ensure that the Commission is able to meet its
dissemination and reporting obligations;

(e)     the use of and changes to human
resources, in particular recruitment by function group, grade and category, the
reclassification exercise and any changes to the number of staff members.

Article 4

Contributions of Members other than the Union

1.           The Members of the BBI
Joint Undertaking other than the Union shall make or arrange for their
constituent entities to make a total contribution of at least EUR 2 800 million
over the period defined in Article 1.

2.           The contribution referred
to in paragraph 1 shall consist of the following:

(a)
contributions to the BBI Joint Undertaking as
laid down in clause 12(2), clause 12(3)(b) and clause 12(3)(c) of the Statutes
contained in the Annex.

(b)
in kind contributions of at least EUR 1 800
million over the period defined in Article 1 by the Members other than the
Union or their constituent entities consisting of the costs incurred by them in
implementing additional activities outside the work plan of the BBI Joint
Undertaking contributing to the objectives of the BBI Joint Technology
Initiative. Other Union funding programmes may support those costs in
compliance with the applicable rules and procedures. In such cases, Union
financing shall not substitute for the in kind contributions from the Members
other than the Union or their constituent entities.

Those costs referred to in point (b) shall not
be eligible for financial support by the BBI Joint Undertaking. The
corresponding activities shall be set out in an annual additional activities
plan that shall indicate the estimated value of those contributions.

3.           The Members of the BBI
Joint Undertaking other than the Union shall report each year by 31 January to
the Governing Board of the BBI Joint Undertaking on the value of the
contributions referred to in paragraph 2 made in each of the previous financial
years.

4.           For the purpose of valuing
the contributions referred to in point (b) of paragraph 2 and clause 12(3)(c)
of the Statutes contained in the Annex, the costs shall be determined according
to the usual cost accounting practices of the entities concerned, to the
applicable accounting standards of the country where each entity is established,
and to the applicable International Accounting Standards / International
Financial Reporting Standards. The costs shall be certified by an independent
external auditor appointed by the entity concerned. The valuation of the
contributions shall be verified by the BBI Joint Undertaking. In case of
remaining uncertainties, it may be audited by the BBI Joint Undertaking.

5.           The Commission may
terminate, proportionally reduce or suspend the Union financial contribution to
the BBI Joint Undertaking or trigger the winding up procedure referred to in
clause 20(2) of the Statutes contained in the Annex if those Members or their
constituent entities do not contribute, contribute only partially or contribute
late with regard to the contributions referred to in paragraph 2.

Article 5

Financial rules

The BBI Joint Undertaking shall adopt its
specific Financial rules in accordance with Article 209 of Regulation (EU,
Euratom) No 966/2012 and Regulation (EU) No ... [Delegated Regulation on the
model Financial Regulation for PPPs].

Article 6

Staff

1.           The Staff Regulations of
Officials and the Conditions of Employment of Other Servants of the European
Union as laid down by Council Regulation (EEC, Euratom, ECSC) No 259/68[29] and the rules adopted by
agreement between the institutions of the Union for giving effect to those
Staff Regulations and those Conditions of Employment of Other Servants shall
apply to the staff employed by the BBI Joint Undertaking.

2.           The Governing Board shall
exercise, with respect to the staff of the BBI Joint Undertaking, the powers
conferred by the Staff Regulations on the Appointing Authority and by the
Conditions of Employment of Other Servants on the Authority Empowered to
Conclude Contract of Employment (hereinafter "the appointing authority
powers").

The Governing Board shall adopt, in accordance
with Article 110 of the Staff Regulations, a decision based on Article 2
paragraph 1 of the Staff Regulations and on Article 6 of the Conditions of
Employment of Other Servants delegating the relevant appointing authority
powers to the Executive Director and defining the conditions under which this
delegation of powers can be suspended. The Executive Director is authorised to
sub-delegate those powers

Where exceptional circumstances so require, the
Governing Board may by way of a decision temporarily suspend the delegation of
the appointing authority powers to the Executive Director and those
sub-delegated by the latter and exercise them itself or delegate them to one of
its members or to a staff member of the Joint Undertaking other than the
Executive Director

3.           The Governing Board shall
adopt appropriate implementing rules to the Staff Regulations and the
Conditions of Employment of Other Servants in accordance with Article 110 of
the Staff Regulations.

4.           The staff resources shall
be determined by the staff establishment plan of the BBI Joint Undertaking
indicating the number of temporary posts by function group and by grade and the
number of contract staff expressed in full-time equivalents, in line with its
annual budget.

5.           The staff of the BBI Joint
Undertaking shall consist of temporary staff and contract staff.

6.           All cost related to staff
shall be borne by the BBI Joint Undertaking.

Article 7

Seconded national experts and trainees

1.           The BBI Joint Undertaking may
make use of seconded national experts and trainees not employed by the Joint
Undertaking. The number of seconded national experts expressed in full-time
equivalents shall be added to information on staff as referred to in Article 6(4)
of this Regulation in line with the annual budget.

2.           The Governing Board shall
adopt a decision laying down rules on the secondment of national experts to the
BBI Joint Undertaking and on the use of trainees.

Article 8

Privileges and Immunities

The Protocol on the Privileges and
Immunities of the Union shall apply to the BBI Joint Undertaking and its staff.

Article 9

Liability of the BBI Joint Undertaking

1.           The contractual liability
of the BBI Joint Undertaking shall be governed by the relevant contractual
provisions and by the law applicable to the agreement, decision or contract in
question.

2.           In the case of
non-contractual liability, the BBI Joint Undertaking shall, in accordance with
the general principles common to the laws of the Member States, make good any
damage caused by its staff in the performance of their duties.

3.           Any payment by the BBI
Joint Undertaking in respect of the liability referred to in paragraphs 1 and 2
and the costs and expenses incurred in connection therewith shall be considered
as expenditure of the BBI Joint Undertaking and shall be covered by the
resources of the BBI Joint Undertaking.

4.           The BBI Joint Undertaking
shall be solely responsible for meeting its obligations.

Article 10

Jurisdiction of the Court of Justice and applicable
law

1.           The Court of Justice shall
have jurisdiction under the conditions laid down in the Treaty as well as in
the following cases:

(a)     in any dispute between the Members
which relates to the subject matter of this Regulation;

(b)     pursuant to any arbitration clause
contained in agreements, decisions or contracts concluded by the BBI Joint
Undertaking;

(c)     in disputes relating to compensation
for damage caused by the staff of the BBI Joint Undertaking in the performance
of their duties;

(d)     in any dispute between the BBI Joint
Undertaking and its servants within the limits and under the conditions laid
down in the Staff Regulations of Officials and the Conditions of Employment of
Other Servants of the European Union.

2.           Regarding any matter not
covered by this Regulation or by other acts of Union law, the law of the State
where the seat of the BBI Joint Undertaking is located shall apply.

Article 11

Evaluation

1.           By 31 December 2017 the
Commission shall conduct an interim evaluation of the BBI Joint Undertaking.
The Commission shall communicate the conclusions thereof, accompanied by its
observations, to the European Parliament and to the Council by 30 June 2018.

2.           On the basis of the
conclusions of the interim evaluation referred to in paragraph 1 the Commission
may act in accordance with Article 4(5) or take any other appropriate action.

3.           Within six months after
the winding up of the BBI Joint Undertaking, but no later than two years after
the triggering of the winding up procedure referred to in clause 20 of the
Statutes contained in the Annex, the Commission shall conduct a final
evaluation of the BBI Joint Undertaking. The results of that final evaluation
shall be presented to the European Parliament and to the Council.

Article 12

Discharge

1.           The discharge of the budget
implementation with regard to the Union contribution to the BBI Joint
Undertaking shall be part of the discharge given by the European Parliament,
upon recommendation of the Council, to the Commission in accordance with the procedure
provided for in Article 319 of the Treaty.

2.           The BBI Joint Undertaking
shall fully cooperate with the institutions involved in the discharge procedure
and provide, as appropriate, any necessary additional information. In this
context, it may be requested to be represented in meetings with the relevant
institutions or bodies and assist the Commission authorising officer by
delegation.

Article 13

Ex-post audits

1.           Ex-post audits of
expenditure on indirect actions shall be carried out by the BBI Joint
Undertaking in accordance with Article 23 of Regulation (EU) No ... [the Horizon
2020 Framework Programme] as part of the Horizon 2020 Framework Programme
indirect actions.

2.           To ensure coherence, the
Commission may decide to carry out the audits referred to in paragraph 1.

Article 14

Protection of the financial interests of
the Members

1.           Without prejudice to
clause 16(4) of the Statutes contained in the Annex, the BBI Joint Undertaking
shall grant Commission staff and other persons authorised by it, as well as the
Court of Auditors, access to its sites and premises and to all the information,
including information in electronic format, needed in order to conduct their
audits.

2.           The European Anti-fraud
Office (OLAF) may carry out investigations, including on-the-spot checks and
inspections, in accordance with the provisions and procedures laid down in
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of
25 May 1999 concerning investigations conducted by the European Anti-Fraud
Office (OLAF)[30]
and Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning
on-the-spot checks and inspections carried out by the Commission in order to
protect the European Communities' financial interests against fraud and other
irregularities[31]
with a view to establishing whether there has been fraud, corruption or any
other illegal activity affecting the financial interests of the Union in
connection with an agreement or decision or a contract funded under this
Regulation.

3.           Without prejudice to
paragraphs 1 and 2, contracts, agreements and decisions, resulting from the
implementation of this Regulation shall contain provisions expressly empowering
the Commission, the BBI Joint Undertaking, the Court of Auditors and OLAF to
conduct such audits and investigations, according to their respective
competences.

4.           The BBI Joint Undertaking
shall ensure that the financial interests of its Members are adequately
protected by carrying out or commissioning appropriate internal and external
controls.

5.           The BBI Joint Undertaking
shall accede to the Interinstitutional Agreement of 25 May 1999 between the
European Parliament, the Council and the Commission concerning internal
investigations by OLAF[32].
The BBI Joint Undertaking shall adopt the necessary measures needed to
facilitate internal investigations conducted by OLAF.

Article 15

Confidentiality

Without prejudice to Article 16, the BBI
Joint Undertaking shall ensure the protection of sensitive information whose
disclosure could damage the interests of its Members or of participants in the
activities of the BBI Joint Undertaking.

Article 16

Transparency

1.           Regulation (EC) No
1049/2001 of the European Parliament and of the Council regarding public access
to European Parliament, Council and Commission documents[33], shall apply to documents held
by the BBI Joint Undertaking.

2.           The BBI Joint Undertaking
Governing Board may adopt practical arrangements for implementing Regulation
(EC) No 1049/2001.

3.           Without prejudice to
Article 10, decisions taken by the BBI Joint Undertaking pursuant to Article 8
of Regulation (EC) No 1049/2001 may form the subject of a complaint to the
Ombudsman under the conditions laid down in Article 228 of the Treaty.

Article 17

Rules for participation and dissemination

Regulation (EU) No ... [Rules for
participation and dissemination in Horizon 2020] shall apply to the actions
funded by the BBI Joint Undertaking. In accordance with that Regulation, the
BBI Joint Undertaking shall be considered as a funding body and shall provide financial
support to indirect actions as set out in clause 1 of the Statutes contained in
the Annex.

Article 18

Support from the host State

An administrative agreement may be
concluded between the BBI Joint Undertaking and the State where its seat is
located concerning privileges and immunities and other support to be provided
by this State to the BBI Joint Undertaking.

Article 19

Initial actions

1.           The Commission shall be
responsible for the establishment and initial operation of the BBI Joint
Undertaking until it has the operational capacity to implement its own budget.
The Commission shall carry out, in accordance with Union law, all necessary
actions in collaboration with the other Members and with the involvement of the
competent bodies of the BBI Joint Undertaking.

2.           For that purpose,

(a)
until the Executive Director takes up his duties
following his/her appointment by the Governing Board in accordance with clause
8 of the Annex, the Commission may designate a Commission official to act as
interim Executive Director and exercise the duties assigned to the Executive
Director who may be assisted by a limited number of Commission officials:

(b)
by derogation from Article 6 (2) of this
Regulation, the interim Director shall exercise the appointing authority
powers;

(c)
the Commission may assign a limited number of
its officials on an interim basis.

3.           The interim Executive Director
may authorise all payments covered by the appropriations provided in the annual
budget of the BBI Joint Undertaking once approved by the Governing Board and
may conclude agreements, decisions and contracts, including staff contracts
following the adoption of the BBI Joint Undertaking's staff establishment plan.

4.           The interim Executive Director
shall in common accord with the Executive Director of the BBI Joint Undertaking
and subject to the approval of the Governing Board determine the day on which
the BBI Joint Undertaking has the capacity to implement its own budget. From
that day, the Commission shall abstain from making commitments and executing
payments for the activities of the BBI Joint Undertaking.

Article 20

Entry into force

This Regulation shall enter into force on
the twentieth day following that of its publication in the Official Journal of
the European Union.

This
Regulation shall be binding in its entirety and directly applicable in all
Member States.

Done at Brussels,

For
the Council

The
President

ANNEX

STATUTES OF THE BBI JOINT UNDERTAKING

1 - Tasks

The
BBI Joint Undertaking shall carry out the following tasks:

(a)
ensure the establishment and sustainable
management of the Joint Technology Initiative on Bio-Based Industries;

(b)
mobilise the public and private sector resources
needed;

(c)
establish and develop close and long-term
cooperation between the Union, industry and the other stakeholders;

(d)
ensure the efficiency of the Joint Technology
Initiative on Bio-Based Industries;

(e)
reach the critical mass of research effort to
embark on a long-term programme;

(f)
monitor progress towards the achievement of the objectives
of the BBI Joint Undertaking;

(g)
support financially research and innovation
indirect actions mainly through grants;

(h)
information, communication, exploitation and
dissemination activities by applying mutatis mutandis the provisions of Article
22 of Regulation (EU- No.../2013 [the Horizon 2020 Framework Programme];

(i)
any other task needed to achieve the objectives set
out in Article 2 of this Regulation.

2 - Members

1.           The Members of the BBI
Joint Undertaking shall be the following:

(a)
the Union, represented by the Commission,

(b)
upon acceptance of these Statutes, by means of a
letter of endorsement, the Bio-based Industries Consortium Aisbl (hereinafter
referred to as BIC), a non-profit organization established under Belgium law (registration number: 0521-857-822), with its permanent office in Brussels, Belgium

3 - Changes
to membership

1.           Provided that it
contributes to the funding referred to in clause 12 to achieve the objectives
of the BBI Joint Undertaking set out in Article 2 of this Regulation, and
accepts the Statutes of the BBI Joint Undertaking, any legal entity that directly
or indirectly supports research and innovation in a Member State or in a
country associated to the Horizon 2020 Framework Programme may apply to become
a Member of the BBI Joint Undertaking.

2.           Any application for new
membership to the BBI Joint Undertaking shall be addressed to the Governing
Board, accompanied by a proposal to adapt the composition of the Governing
Board set out in clause 5.

3.           The Governing Board shall
assess the application taking into account the relevance and the potential
added value of the applicant for the achievement of the objectives of the BBI
Joint Undertaking. It shall then decide on the application.

4.           Any Member may terminate
its membership to the BBI Joint Undertaking. The termination shall become
effective and irrevocable six months after notification to the other Members. As
of then, the former Member shall be discharged from any obligations other than
those approved or incurred by the BBI Joint Undertaking prior to terminating
the membership.

5.           Membership of the BBI
Joint Undertaking may not be transferred to a third party without prior
agreement of the Governing Board.

6.           The BBI Joint Undertaking
shall publish on its website immediately upon any change to membership pursuant
to this clause an updated list of Members of the BBI Joint Undertaking together
with the date when such change takes effect.

4 - Organisation
of the BBI Joint Undertaking

1.           The bodies of the BBI
Joint Undertaking shall be:

(a)
the Governing Board;

(b)
the Executive Director;

(c)
the Scientific Committee;

(d)
the States Representatives Group.

2.           The Scientific Committee
and the States Representatives Group shall be advisory bodies to the BBI Joint
Undertaking.

5 - Composition
of the Governing Board

1.           The Governing Board shall
be composed of the following:

–
five representatives of the Commission;

–
five representatives of the private Members, at
least one of which should be a Small and Medium Enterprise representative.

6 - Functioning
of the Governing Board

1.           The Commission shall hold
50 % of the voting rights. The vote of the Commission shall be indivisible. The
private Members shall hold an equal number of votes. The Members shall use
their best efforts to achieve consensus. Failing consensus, the Governing Board
shall take its decisions by a majority of at least 75% of all votes, including
the votes of those who are not in attendance.

2.           The Governing Board shall
elect its chairperson for a period of two years.

3.           The Governing Board shall
hold its ordinary meetings twice a year. It may hold extraordinary meetings at
the request of the Commission or of a majority of the representatives of the
private Members or at the request of the chairperson. The meetings of the
Governing Board shall be convened by its chairperson and shall usually take place
at the seat of the BBI Joint Undertaking.

The Executive Director shall have the right to take
part in the deliberations, but shall have no voting rights.

The chairperson of the States Representatives
Group shall have the right to attend meetings of the Governing Board as an
observer.

The Governing Board may invite, on a case by
case basis, other persons to attend its meetings as observers, in particular
representatives of regional authorities of the Union and representatives of
civil society.

The representatives of the Members shall not be
personally liable for actions they have taken in their capacity as
representatives on the Governing Board.

The Governing Board shall adopt its own rules
of procedure.

7 - Tasks
of the Governing Board

1.           The Governing Board shall
have overall responsibility for the strategic orientation and the operations of
the BBI Joint Undertaking and shall supervise the implementation of its
activities.

2.           The Governing Board shall
in particular carry out the following tasks:

(a)
assess, accept or reject applications for new
membership in accordance with clause 3;

(b)
decide on the termination of the membership in
the BBI Joint Undertaking of any Member that does not fulfil its obligations;

(c)
adopt the Financial rules of the BBI Joint
Undertaking in accordance with Article 5 of this Regulation;

(d)
adopt the annual budget of the BBI Joint
Undertaking, including the staff establishment plan indicating the number of
temporary posts by function group and by grade as well as the number of
contract staff and seconded national experts expressed in full-time equivalents;

(e)
exercise the appointing authority powers with
respect of the staff, in accordance with Article 6(2) of this Regulation;

(f)
appoint, dismiss, extend the term of office of,
provide guidance to and monitor the performance of the Executive Director;

(g)
approve the organisational structure of the Programme
Office, referred to in clause 9(5), upon recommendation by the Executive
Director;

(h)
adopt the annual work plan and the corresponding
expenditure estimates, as proposed by the Executive Director after having
consulted the Scientific Committee and the States Representatives Group;

(i)
approve the annual additional activities plan
referred to in Article 4(2)(b) of this Regulation on the basis of a proposal
from the private Members and after having consulted, where appropriate, an ad
hoc advisory group

(j)
approve the annual accounts;

(k)
approve the annual activity report, including
the corresponding expenditure;

(l)
arrange, as appropriate, for the establishment
of an internal audit capability of the BBI Joint Undertaking;

(m)
approve the calls as well as, where appropriate,
the related rules for submission, evaluation, selection, award and review
procedures;

(n)
approve the list of actions selected for
funding;

(o)
establish the BBI Joint Undertaking's
communications policy upon a recommendation by the Executive Director;

(p)
where appropriate, establish implementing rules
in line with Article 6(3) of this Regulation;

(q)
where appropriate, establish rules on the
secondment of national experts to the BBI Joint Undertaking and on the use of
trainees in line with Article 7 of this Regulation;

(r)
where appropriate, set up advisory groups in
addition to the bodies to the BBI Joint Undertaking;

(s)
where appropriate, submit to the Commission any
request to amend this Regulation proposed by any Member of the BBI Joint
Undertaking;

(t)
be responsible for any task that is not
specifically allocated to one of the bodies of the BBI Joint Undertaking which
it may assign to one of those bodies;

8 – Appointment,
dismissal or extension of the term of office of the Executive Director

1.           The Executive Director
shall be appointed by the Governing Board, from a list of candidates proposed
by the Commission, following an open and transparent selection procedure. The
Commission shall associate the representation from the other Members of the BBI
Joint Undertaking in the selection procedure as appropriate.

In particular, an appropriate representation
from the other Members of the BBI Joint Undertaking shall be ensured at the
pre-selection stage of the selection procedure. For that purpose, the private Members
shall appoint by common accord a representative as well as an observer on
behalf of the Governing Board.

2.           The Executive Director is
a member of staff and shall be engaged as a temporary agent of the BBI Joint
Undertaking under point (a) of Article 2 of the Conditions of Employment of
Other Servants of the Union.

For the purpose of concluding the contract of
the Executive Director, the BBI Joint Undertaking shall be represented by the chairperson
of the Governing Board.

3.           The term of office of the
Executive Director shall be three years. By the end of that period, the
Commission associating the private Members as appropriate shall undertake an
assessment of the performance of the Executive Director and the BBI Joint
Undertaking's future tasks and challenges.

4.           The Governing Board, acting
on a proposal from the Commission which takes into account the assessment
referred to in paragraph 3, may extend the term of office of the Executive
Director once, for no more than four years.

5.           An Executive Director
whose term of office has been extended may not participate in another selection
procedure for the same post at the end of the overall period.

6.           The Executive Director may
be dismissed only upon a decision of the Governing Board acting on a proposal
from the Commission associating the private Members as appropriate.

9 - Tasks
of the Executive Director

1.           The Executive Director
shall be the chief executive responsible for the day-to-day management of the BBI
Joint Undertaking in accordance with the decisions of the Governing Board.

2.           The Executive Director
shall be the legal representative of the BBI Joint Undertaking. He/ she shall
be accountable to the Governing Board.

3.           The Executive Director
shall implement the budget of the BBI Joint Undertaking.

4.           The Executive Director
shall in particular carry out the following tasks in an independent manner:

(a)
prepare and submit for adoption to the Governing
Board the draft annual budget, including the corresponding staff establishment
plan indicating the number of temporary posts in each grade and function group
and the number of contract staff and seconded national experts expressed in
full-time equivalents;

(b)
prepare and submit for adoption to the Governing
Board the annual work plan and the corresponding expenditure estimates;

(c)
submit for approval to the Governing Board the
annual accounts;

(d)
prepare and submit for approval to the Governing
Board the annual activity report, including the corresponding expenditure;

(e)
submit for approval to the Governing Board the
list of actions selected for funding;

(f)
sign individual agreements or decisions;

(g)
sign procurement contracts;

(h)
implement the BBI Joint Undertaking's
communications policy;

(i)
organise, direct and supervise the operations
and the staff of the BBI Joint Undertaking within the constraints of the
delegation by the Governing Board as provided for in Article 6(2) of this
Regulation;

(j)
establish and ensure the functioning of an
effective and efficient internal control system and report any significant
change to it to the Governing Board;

(k)
ensure that risk assessment and risk management
are performed;

(l)
take any other measures needed for assessing the
progress of the BBI Joint Undertaking towards achieving its objectives;

(m)
perform any other tasks entrusted or delegated
to the Executive Director by the Governing Board.

5.           The Executive Director shall
set up a Programme Office for the execution, under his/ her responsibility, of all
support tasks arising from this Regulation. The Programme Office shall be composed of the staff of BBI Joint Undertaking and shall in particular carry out the
following tasks:

(a)
provide support in establishing and managing an
appropriate accounting system in accordance with the Financial rules of the BBI
Joint Undertaking;

(b)
manage the calls as provided for in the annual work
plan and the administration of the agreements or decisions, including their
coordination;

(c)
provide to the Members and the other bodies of
the BBI Joint Undertaking all relevant information and support necessary for
them to perform their duties as well as responding to their specific requests;

(d)
act as the secretariat of the bodies of the BBI
Joint Undertaking and provide support to any advisory group set up by the
Governing Board .

10 - Scientific Committee

1.           The Scientific Committee
shall consist of no more than ten members. It shall elect a chairperson from amongst
its members.

2.           The members shall reflect
a balanced representation of world-wide recognised experts from academia,
industry, small and medium enterprises, non-governmental organisations and
regulatory bodies. Collectively, the Scientific Committee members shall have
the necessary scientific competencies and expertise covering the technical
domain needed to make science-based recommendations to the BBI Joint
Undertaking.

3.           The Governing Board shall
establish the specific criteria and selection process for the composition of
the Scientific Committee and shall appoint its members. The Governing Board shall
take into consideration the potential candidates proposed by the BBI States
Representatives Group.

4.           The Scientific Committee
shall carry out the following tasks:

(a)
advise on the scientific priorities to be
addressed in the annual work plans;

(b)
advise on the scientific achievements described
in the annual activity report.

5.           The Scientific Committee
shall meet at least once a year. The meetings shall be convened by its
chairperson.

6.           The Scientific Committee
may, with the agreement of the chairperson, invite other persons to attend its
meetings.

7.           The Scientific Committee
shall adopt its own rules of procedure.

11 - States
Representatives Group

1.           The BBI States
Representatives Group shall consist of one representative of each Member State and of each country associated to the Horizon 2020 Framework Programme. It
shall elect a chairperson among its members.

2.           The States Representatives
Group shall meet at least once a year. The meetings shall be convened by its
chairperson. The Executive Director and the chairperson of the Governing Board
or their representatives shall attend the meetings.

The chairperson of the States Representatives
Group may invite other persons to attend its meetings as observers, in
particular representatives of regional authorities of the Union,
representatives of civil society or representatives of SME associations.

3.           The States Representatives
Group shall in particular review information and provide opinions on the
following matters:

(a)
programme progress in the BBI Joint Undertaking
and achievement of its targets;

(b)
updating of strategic orientation;

(c)
links to the Horizon 2020 Framework Programme;

(d)
annual work plans;

(e)
involvement of SMEs.

4.           The States Representatives
Group shall also provide information to and act as an interface with the BBI Joint
Undertaking on the following matters:

(a)
the status of relevant national or regional research
and innovation programmes and identification of potential areas of cooperation,
including deployment of relevant technologies;

(b)
specific measures taken at national or regional level
with regard to dissemination events, dedicated technical workshops and
communication activities.

(c)
specific measures taken at national or regional level
with regard to deployment activities in relation to the Joint Technology Initiative
on Bio-based Industries.

5.           The States Representatives
Group may issue, on its own initiative, recommendations to the BBI Joint
Undertaking on technical, managerial and financial matters, in particular when
those matters affect national or regional interests.

The BBI Joint Undertaking shall inform the
States Representatives Group of the follow up it has given to such
recommendations.

6.           The States Representatives
Group shall adopt its own rules of procedure.

12 - Sources
of financing

1.           The BBI Joint Undertaking
shall be jointly funded by the Union and the Members other than the Union or their constituent entities through financial contributions paid in instalments and
contributions consisting of the costs incurred by them in implementing indirect
actions that are not reimbursed by the BBI Joint Undertaking.

2.           The administrative costs
of the BBI Joint Undertaking shall not exceed EUR 60 million and shall be
covered through financial contributions divided equally on an annual basis between
the Union and the Members other than the Union. If part of the contribution for
administrative costs is not used, it may be made available to cover the
operational costs of the BBI Joint Undertaking.

3.           The operational costs of
the BBI Joint Undertaking shall be covered through:

(a)
a financial contribution by the Union;

(b)
a financial contribution by the Members other
than the Union;

(c)
in kind contributions by the Members other than
the Union or their constituent entities consisting of the costs incurred by
them in implementing indirect actions less the contribution of the BBI Joint
Undertaking and any other Union contribution to those costs.

4.           The financial contribution
by the Members other than the Union to the operational costs referred to in
paragraph 3(b) shall be at least EUR 182.50 million over the period provided
for in Article 1 of this Regulation.

5.           The resources of the BBI
Joint Undertaking entered to its budget shall be composed of the following
contributions:

(a)
Members' financial contributions to the
administrative costs;

(b)
Members' financial contributions to the
operational costs;

(c)
any revenue generated by the BBI Joint
Undertaking;

(d)
any other financial contributions, resources and
revenues.

Any interest yielded by the contributions paid to
the BBI Joint Undertaking by its Members shall be considered to be its revenue.

6.           All resources of the BBI
Joint Undertaking and its activities shall be devoted to the objectives set out
in Article 2 of this Regulation.

7.           The BBI Joint Undertaking
shall own all assets generated by it or transferred to it for the fulfilment of
its objectives set out in Article 2 of this Regulation

8.           Except when the BBI Joint
Undertaking is wound up pursuant to clause 20, any excess revenue over
expenditure shall not be paid to the Members of the BBI Joint Undertaking.

13 - Financial
commitments

Financial commitments of the BBI Joint
Undertaking shall not exceed the amount of financial resources available or
committed to its budget by its Members.

14 - Financial
year

The financial year shall run from 1 January
to 31 December.

15 - Operational
and financial planning

1.           The Executive Director
shall submit for adoption to the Governing Board a draft annual work plan,
which shall include a detailed plan of the research and innovation activities,
the administrative activities and the corresponding expenditure estimates for
the coming year. The draft work plan shall also include the estimated value of
the contributions to be made in accordance with clause 12(3)(c).

2.           The annual work plan for a
particular year shall be adopted by the end of the previous year. The annual work
plan shall be made publicly available.

3.           The Executive Director
shall prepare the draft annual budget for the following year and submit it to the
Governing Board for adoption.

4.           The annual budget for a
particular year shall be adopted by the Governing Board by the end of the
previous year.

5.           The annual budget shall be
adapted in order to take into account the amount of the Union contribution as
set out in the Union budget.

16 - Operational and financial reporting

1.           The Executive Director
shall report annually to the Governing Board on the performance of his duties
in accordance with the Financial rules of the BBI Joint Undertaking.

By 15 February of each year the Executive
Director shall submit to the Governing Board for approval an annual activity
report on the progress made by the BBI Joint Undertaking in the previous
calendar year, in particular in relation to the annual work plan for that year.
That report shall include, inter alia, information on the following matters:

(a)
research, innovation and other actions carried
out and the corresponding expenditure;

(b)
the actions submitted, including a breakdown by
participant type, including SMEs, and by country;

(c)
the actions selected for funding, including a
breakdown by participant type, including SMEs, and by country and indicating
the contribution of the BBI Joint Undertaking to the individual participants
and actions.

2.           Once approved by the
Governing Board, the annual activity report shall be made publicly available.

3.           The BBI Joint Undertaking
shall report annually to the Commission in accordance with Article 60(5) of
Regulation (EU, Euratom) No 966/2012.

4.           The accounts of the BBI
Joint Undertaking shall be examined by an independent audit body as laid down
in Article 60(5) of Regulation (EU, Euratom) No 966/2012.

The accounts of the BBI Joint Undertaking shall
not be subject to examination by the Court of Auditors.

17 - Internal
audit

The Commission's internal auditor shall
exercise the same powers over the BBI Joint Undertaking as those exercised in
respect of the Commission.

18 - Liability
of Members and insurance

1.           The financial liability of
the Members for the debts of the BBI Joint Undertaking shall be limited to
their contribution already made for the administrative costs.

2.           The BBI Joint Undertaking
shall take out and maintain appropriate insurance.

19 - Conflict of interest

1.           The BBI Joint Undertaking,
its bodies and staff shall avoid any conflict of interest in the implementation
of their activities.

2.           The BBI Joint Undertaking
Governing Board may adopt rules for the prevention and management of conflicts
of interest in respect of its Members, bodies and staff. In those rules
provision shall be made to avoid a conflict of interest for the representatives
of the Members serving in the Governing Board.

20 - Winding
up

1.           The BBI Joint Undertaking
shall be wound up at the end of the period defined in Article 1 of this
Regulation.

2.           The winding up procedure
shall be automatically triggered if the Commission or all private Members
withdraw from the BBI Joint Undertaking.

3.           For the purpose of
conducting the proceedings to wind up the BBI Joint Undertaking, the Governing
Board shall appoint one or more liquidators, who shall comply with the
decisions of the Governing Board.

4.           When the BBI Joint
Undertaking is being wound up, its assets shall be used to cover its
liabilities and the expenditure relating to its winding up. Any surplus shall
be distributed among the Members at the time of the winding up in proportion to
their financial contribution to the BBI Joint Undertaking. Any such surplus distributed
to the Union shall be returned to the Union budget.

5.           An ad hoc procedure shall
be set up to ensure the appropriate management of any agreement concluded or
decision adopted by the BBI Joint Undertaking as well as any procurement
contract with duration longer than its duration.

LEGISLATIVE
FINANCIAL STATEMENT

1.           FRAMEWORK OF THE
PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

Proposal for a Council Regulation on the
Bio-based Industries Joint Undertaking

1.2.        Policy area(s) concerned
in the ABM/ABB structure[34]

Policy area: Horizon 2020 - The Framework
Programme for Research and Innovation

Activity: Societal challenges "Food security,
sustainable agriculture, marine and marine research and the bioeconomy"
and Industrial Leadership "Key Enabling Technologies (BIOKET)"

1.3.        Nature of the
proposal/initiative

X       The proposal/initiative relates to a
new action

 ̈      The proposal/initiative relates to a new action following a
pilot project/preparatory action[35]

 ̈      The proposal/initiative relates to the extension of an
existing action

 ̈      The proposal/initiative relates to an action redirected
towards a new action

1.4.        Objective(s)

1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative

To set up the BBI Joint Undertaking as a new
scheme of Public Private Partnership between the Commission and the industry
for research and innovation funding.

To organise the competitive calls for
proposals, evaluation and selection of projects where industry will co-fund the
selected collaborative research projects performed in a Member State or a
country associated to the Horizon 2020, together with academic, SMEs, and other
partners supported by the funds coming from the BBI Joint Undertaking;

1.4.2.     Specific objective(s) and
ABM/ABB activity(ies) concerned

(a)
to demonstrate
technologies that enable new chemical building blocks, new materials, and new
consumer products from European biomass and which replace the need for fossil
based inputs;

(b)
to develop business models that integrate
economic actors along the whole value chain from supply of biomass to
biorefinery plants to consumers of bio-based materials, chemicals and fuels,
including through creating new cross-sector interconnections and supporting
cross-industry clusters; and

(c)
to set up flagship
biorefinery plants that deploy the technologies and businessmodels for
bio-based materials, chemicals and fuels and demonstrate cost and performance
improvements to levels that are competitive with fossil based alternatives.

ABM/ABB
activity(ies) concerned

(a)
To monitor and follow-up the financial and
scientific aspects of projects having concluded a grant agreement with the BBI
Joint Undertaking.

(b)
To organise the calls for tender necessary to
the operations of the BBI Joint Undertaking.

(c)
To set up and implement all procedures of the
BBI Joint Undertaking.

(d)
To organise the dissemination activities of the
BBI Joint Undertaking.

(e)
To organise any other activity linked to the BBI
Joint Undertaking.

1.4.3.     Expected result(s) and
impact

Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.

A significant increase in private research
investment with:

–
Five new building blocks for the chemical
industry by 2020

–
Fifty new biobased materials by 2020

–
Five flagship biorefinery plants by 2020

A shorter time to market with:

–
Thirty new consumer products by 2020

–
Ten new bio-based value chains by 2020

–
A broad participation of SMEs

1.4.4.     Indicators of results and
impact

Specify the
indicators for monitoring implementation of the proposal/initiative.

A set of quantitative and qualitative
performance indicators (KPI, key performance indicators) will be established to
follow the implementation of the BBI Joint Undertaking. These key performance
indicators will measure the impact of the Joint Undertaking on EU
competitiveness and the research environment for biobased and renewable
industries. The quantitative indicators will be measured on a large scale in a
comparative and systematic manner, while the qualitative approach will include
case studies and technical audits. The key performance indicators should be
assessed against the baseline of the state of affairs in the years prior to the
start of the Joint Undertaking to help assess additionality effects during its
lifetime.

The progress of the Joint Undertaking will be
continuously monitored against a set of objectively verifiable indicators
including:

–
monitoring of public (EC and other) and private
funding;

–
follow-up of additionality;

–
selection of projects and allocation of funding;

–
technical monitoring against well-defined
specific programme milestones;

–
adherence to time schedule;

–
quantified monitoring of market penetration in
target sectors;

–
level of SME participation and of participation
from the newer Member States;

–
sustainability indicators.

At mid-term, the Joint Undertaking will be
evaluated by independent experts on behalf of the Commission. This evaluation
will cover the quality and efficiency of the Joint Undertaking and its progress
towards its objectives and make recommendations for any necessary re-adjustment
of the programme and if applicable, consideration of an exit strategy.

1.5.        Grounds for the proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term

To set-up the Joint Undertaking as a new
structure of Partnership between the Commission and Industry for research and
innovation funding.

To organise competitive calls for proposals,
evaluation and selection of projects where industry will co-fund the selected
collaborative research projects.

To monitor and follow up financial and
scientific aspects of projects having concluded a grant agreement with BBI
Joint Undertaking.

To set-up and implement all procedures of the
BBI Joint Undertaking including financial auditing.

To organise the dissemination and communication
activities of the BBI Joint Undertaking.

To organise any other activity linked to the
BBI Joint Undertaking.

1.5.2.     Added value of EU
involvement

A coordinated approach at EU level is also
important for the development of bio-based industries, because the setting up
of their value chains requires linking stakeholders in areas with strong
agricultural and forestry sectors to stakeholders with a strong technological
and industrial base. These may not be situated in the same Region or Member State, which can add further complications to an already complex scenario.

1.5.3.     Lessons learned from
similar experiences in the past

A number of small scale initiatives by Member States or Regions have recognised that the successful development of the bioeconomy
is highly dependent on effective transnational cooperation. This is reflected
in a growing number of collaborations between national and regional bioeconomy
clusters, for example between IAR and Wagralim, or CLIB2021 and BE-BASIC.
Although these collaborations between Regions and clusters look promising at
first sight, they are also often affected by the differences in funding levels
and financing rules.

1.5.4.     Compatibility and possible
synergy with other appropriate instruments

There may be compatibility in the orientations
both in Horizon 2020 and in the Structural Funds, for supporting RTD activities
-especially on innovation. The different new legal frameworks, programming
mechanisms and approaches in terms of participation have to be considered.
Synergies between funding actions in Horizon 2020 and funds of Member States and regions could be possible. Being the PPP a key enabler for bridging the
Research and Innovation activities with the regional clusters organised under
the Smart Specialisation Strategy it may be instrumental for facilitating
combination of these sources of funding and increase efficiency of the action.
Also synergies can be considered to access new financial instruments as the
RSFF (Risk Sharing Funding Facility) of EIB, for the deployment.

1.6.        Duration and financial
impact

X       Proposal/initiative of limited duration

X       Proposal/initiative in effect from 01/01/2014
to 31/12/2024

X       Financial impact from 01/01/2014 to
31/12/2020 for commitment appropriations

X       Financial impact from 01/01/2014 to
31/12/2024 for payment appropriations

 ̈      Proposal/initiative of unlimited duration

Implementation with a start-up period from YYYY
to YYYY,

Followed by full-scale operation.

1.7.        Management mode(s)
envisaged[36]

 ̈      Direct management by the Commission through:

 ̈      Executive agencies

 ̈      Shared management with Member States:

X       Indirect management by entrusting
budget implementation tasks to:

 ̈      International organisations and their agencies (please
specify);

 ̈      The European Investment Bank;

X       bodies referred to in Article 209 FR;

 ̈      Public law bodies;

 ̈      Bodies governed by private law with a public service mission
to the extent that they provide adequate financial guarantees;

 ̈      Bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that
provide adequate financial guarantees;

 ̈      Persons entrusted with the implementation of specific actions
in the CFSP pursuant to Title V of the TEU and identified in the relevant basic
act.

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

Specify frequency
and conditions.

The BBI Joint Undertaking will be
monitored through intermediary contacts and as provided in Clauses 6 and
16 of the Statutes.

2.2.        Management and control
system

2.2.1.     Internal control framework

The Commission through the Authorising Officer by Delegation will
ensure that the rules applicable to the BBI JTI JU fully comply with the
requirements of Article 60 and 61 of the Financial Regulation. Monitoring
arrangements, including membership of the Governing board, of the BBI JTI JU
and reporting arrangements will ensure that the Commission services can meet
the accountability requirements both to the College and to the Budgetary
Authority.

The internal control framework for the BBI JTI JU will be built on:

-the implementation of the Internal Control Standards offering at
least equivalent guarantees to those of the Commisson;

-procedures for selecting the best projects through independent
evaluation, and for translating them into legal instruments;

- project and contract management throughout the lifetime of every
project;

-ex-ante checks on 100% of claims, including receipt of audit
certificates and ex-ante certification of cost methodologies;

- ex post audits on a sample of claims as part of the Horizon 2020
ex-post audits;

- and scientific evaluation of project results.

Various measures will be established to mitigate the inherent risk
of conflict of interest within the BBI JTI JU, especially equal votes for the
Commission and for industrial partners in the Governing Board, selection of the
Director by the Governing Board based on a proposal by the Commission,
independence of staff, evaluations by independent experts based on published
selection criteria together with appeal mechanisms and full declarations of any
interests. The establishment of ethical and organisational values will be one
of the key roles of the JTI JU, and will be monitored by the Commission.

2.2.2.     Costs and benefits of
controls

The Commission's internal auditor shall exercise the same powers
over the Joint Undertaking as those exercised in respect of the Commission.
Moreover, the Governing Board may arrange, as appropriate, for the
establishment of an internal audit capability of the Joint UndertakingThe
Executive Director of the BBI JTI JU, as Authorising Officer, will be required
to introduce a cost-effective system of internal control and management. He/she
will be required to report to the Commission on the internal control framework
adopted.

The Commission will monitor the risk of non-compliance through the
reporting system that it will develop, as well as by following the results of
ex post audits on the recipients of EU funds from the BBI JTI, as part of ex
post audits covering the whole of the Horizon 2020.

The control system established will need to take account of the
strong feeling, amongst the recipients of EU funds as well as amongst the
legislative authority, that the control burden required to attain an error
limit of 2% has become too great. This runs the risk of lowering the
attractiveness of the Union's Research programme, and so negatively affecting
Union research and innovation.

The European Council of February 4th 2011 concluded that
‘it is crucial that EU instruments aimed at fostering R&D&I be
simplified in order to facilitate their take-up by the best scientists and the
most innovative companies, in particular by agreeing between the relevant
institutions a new balance between trust and control and between risk taking
and risk avoidance’ (see EUCO 2/1/11 REV1, Brussels 8 March 2011).

The European Parliament, in its Resolution of 11 November 2010
(P7_TA(2010)0401) on simplifying the implementation of the Research Framework
Programmes explicitly supports a higher risk of errors for research funding and
"expresses its concern that the current system and the practice of FP7
management are excessively control-oriented, thus leading to waste of
resources, lower participation and less attractive research landscapes; notes
with concern that the current management system of ‘zero risk tolerance’ seems
to avoid, rather than to manage, risks".

There is therefore an acceptance among stakeholders and Institutions
that the whole range of objectives and interests, especially the success of the
Research policy, international competitiveness and scientific excellence,
should be considered, along with the error rate. At the same time, there is a
clear need to manage the budget in an efficient and effective manner, and to
prevent fraud and waste.

As stated above, the Commission will monitor the risk of
non-compliance through the reporting system that it will establish , as well as
by following the results of ex post audits on the recipients of EU funds from
the BBI JTI JU, as part of the ex post audits covering the whole of the Horizon
2020.

2.2.3.     Expected level of risk of
non-compliance

As the Commission reported in the Legislative Financial Statement
for Horizon 2020, it remains the ultimate objective to achieve a residual error
rate of less than 2% of total expenditure over the lifetime of the programme,
and to that end, it has introduced a number of simplification measures. However,
the other objectives set out above as well as the costs of controls need to be
considered.

As the rules of participation in the BBI JTI JU are basically the
same as those that the Commission will use, and with a population of
beneficiaries with a similar risk profile to those of the Commission, it can be
expected that the level of error will be similar to that established by the
Commission for Horizon 2020, i.e. to give reasonable assurance that the risk of
error over the course of the multiannual expenditure period is, on an annual
basis, within a range of 2-5 %, with the ultimate aim to achieve a residual
level of error as close as possible to 2 % at the closure of the multi-annual
programmes, once the financial impact of all audits, correction and recovery
measures have been taken into account.

See the Legislative Financial Statement for Horizon 2020 for full
details of the error rate expected with respect to participants.

2.3.        Measures to prevent fraud
and irregularities

The Commission will ensure that procedures to fight against fraud at
all stages of the management process are applied by the BBI JTI JU. The
proposals for Horizon 2020 have been subject to fraud proofing and an
assessment of their impact. Overall the measures proposed should have a positive
impact on the fight against fraud, especially the greater emphasis on risk
based audit and reinforced scientific evaluation and control.

The Commission will ensure that appropriate measures are in place to
ensure that, when actions financed under this Regulation are implemented, the
financial interests of the Union are protected by the application of preventive
measures against fraud, corruption and any other illegal activities, by
effective checks and, if irregularities are detected, by the recovery of the
amounts wrongly paid and, where appropriate, by effective, proportionate and
deterrent penalties.

The Commission will ensure that cooperation with its services from
the BBI JTI JU in matters relating to fraud and irregularity will and be
strong.

The Court of Auditors shall have the power of audit, on the basis of
documents and on-the-spot, over all grant beneficiaries, contractors and
subcontractors who have received Union funds under the Programme.

The European Anti-fraud Office (OLAF) may carry out on-the-spot
checks and inspections on economic operators concerned directly or indirectly
by such funding in accordance with the procedures laid down in Regulation
(Euratom, EC) No 2185/96 with a view to establishing whether there has
been fraud, corruption or any other illegal activity affecting the financial
interests of the Union in connection with a grant agreement or grant decision
or a contract concerning Union funding.

3.           ESTIMATED FINANCIAL
IMPACT OF THE PROPOSAL/INITIATIVE

3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected

·
New budget lines requested

In order of multiannual financial framework
headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Heading 1A – Competitiveness for growth and jobs || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

1A || 08 02 07 32 - Societal challenges – JTI BBI || Diff. || YES || YES || YES || YES

The annual budget of Bio-Based Industries
JU commitment and payment appropriations is financed by:

- 08.020201 Leadership in nanotechnologies,
advanced materials, biotechnology and advanced manufacturing and processing:
15%

- 08.020302 Improving
food security, developing sustainable agriculture, marine and maritime research
and the bio-economy: 85%

The yearly financial contribution per
budget line is indicated in the table below.

EUR million (to
three decimal places)

Budget line || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || total

08.020201 Leadership in nanotechnologies, advanced materials, biotechnology and advanced manufacturing and processing || 7,793 || 30,314 || 24,411 || 20,768 || 21, 318 || 21,529 || 23,867 || 150,000

08.020302 Improving food security, developing sustainable agriculture, marine and maritime research and the bio-economy || 44,162 || 171,782 || 138,332 || 117,685 || 120,803 || 121,998 || 135,238 || 850,000

Total || 51,955 || 202,096 || 162,743 || 138,453 || 142,121 || 143,527 || 159,105 || 1.000,000

3.2.        Estimated impact on
expenditure

3.2.1.     Summary of estimated impact
on expenditure

Heading of multiannual financial Framework: || 1A || Heading 1A – Competiveness for growth and jobs Budget line: 08 02 07 32 – Societal challenges – JTI BBI

EUR million (to
three decimal places)

BBI Joint Undertaking || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 to 2024 || TOTAL

Title 1 - Staff expenditure || Commitments || (1) || 0,498 || 0,651 || 0,664 || 0,678 || 0,691 || 0,705 || 3,745 || 0 || 7,632

Payments || (2) || 0,498 || 0,651 || 0,664 || 0,678 || 0,691 || 0,705 || 0,719 || 3,026 || 7,632

Title 2 - Infrastucture and operating expenditure || Commitments || (1a) || 1,457 || 1,445 || 1,579 || 1,775 || 1,930 || 1,822 || 2,36 || 0 || 12,368

Payments || (2a) || 1,457 || 1,445 || 1,579 || 1,775 || 1,930 || 1,822 || 1,292 || 1,068 || 12,368

Title 3 - Operational expenditure || Commitments || (3a) || 50,000 || 200,000 || 160,500 || 136,000 || 139,500 || 141,000 || 153,.000 || 0 || 980,000

Payments || (3b) || 0 || 130,000 || 94,660 || 95,680 || 106,996 || 119,776 || 216,444 || 216,444 || 980,000

TOTAL appropriations for BBI Joint Undertaking || Commitments || =1+1a +3a || 51,955 || 202,096 || 162,743 || 138,453 || 142,121 || 143,527 || 159,105 || 0 || 1.000,000

Payments || =2+2a +3b || 1,955 || 132,096 || 96,903 || 98,133 || 109,617 || 122,303 || 218,455 || 220,538 || 1.000,000

Bio-Based Industries Joint Undertaking is
based on a shared costs basis with industry.

Heading of multiannual financial framework: || 1A || ‘Administrative expenditure

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Years 2021-2024 || TOTAL

DG: RTD || ||

Ÿ Human resources || 0,393 || 0,400 || 0,408 || 0,417 || 0,425 || 0,433 || 0,441 || p.m. || 2,917

Ÿ Other administrative expenditure || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL DG RTD || Appropriations || 0,393 || 0,400 || 0,408 || 0,417 || 0,425 || 0,433 || 0,441 || p.m. || 2,917

TOTAL appropriations under HEADING 1A of the multiannual financial framework || (Total commitments = Total payments) || 0,393 || 0,400 || 0,408 || 0,417 || 0,425 || 0,433 || 0,441 || p.m. || 2,917

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Years 2021-2024 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 52,348 || 202,496 || 163,151 || 138,870 || 142,546 || 143,960 || 159,546 || || 1.002,917

Payments || 2,348 || 132,496 || 97,311 || 98,550 || 110,042 || 122,736 || 218,896 || 220,538 || 1.002,917

3.2.2.     Estimated impact on BBI
Joint Undertaking's appropriations

 ̈         The proposal/initiative does not require the use of
operational appropriations

X         The proposal/initiative requires
the use of operational appropriations, as described below:

Indicate objectives and outputs ò || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020-2024 || total

|| || || ||

Type[37] || Average cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || Cost || Number || costs ||

SPECIFIC OBJECTIVE NO 1[38] To up-scale and validate at demonstration scale entirely new building blocks for the chemical industry || || || || || || || || || || || || || || ||

- Output Five new building blocks for the chemical industry || Building blocks || 30,000 || || 22,000 || || 75,000 || || 57,500 || || 52,000 || || 50,000 || || 50,000 || || 83,000 || 389,500

Subtotal for specific objective N°1 || || 22,000 || || 75,000 || || 57,500 || || 52,000 || || 50,000 || || 50,000 || || 83,000 || 389,500

SPECIFIC OBJECTIVE No 2 To develop new bio-based materials || || || || || || || || || || || || || || ||

- Output Fifty new biobased materials || Materials || 2,500 || || 9,000 || || 35,000 || || 36,500 || || 24,000 || || 27,000 || || 29,500 || || 36,000 || 197,000

Subtotal for specific objective No 2 || || 9,000 || || 35,000 || || 36,500 || || 24,000 || || 27,000 || || 29,500 || || 36,000 || 197,000

SPECIFIC OBJECTIVE NO 3 To present new close to the market consumer products || || || || || || || || || || || || || || ||

- Output Thirty new consumer products || Products || 2,500 || || 10,000 || || 21,500 || || 21,500 || || 15,500 || || 17,500 || || 19,000 || || 31,500 || 136,500

Subtotal for specific objective No 3 || || 10,000 || || 21,500 || || 21,500 || || 15,500 || || 17,500 || || 19,000 || || 31,500 || 136,500

SPECIFIC OBJECTIVE NO 4 To set up flagship biorefineries || || || || || || || || || || || || || || ||

- Output Five flagship biorefinery plants || refineries || 25,000 || || 19,000 || || 70,000 || || 47,000 || || 51,000 || || 53,000 || || 51,000 || || 65,000 || 356,000 ||

Subtotal for specific objective No 4 || || 19,000 || || 70,000 || || 47,000 || || 51,000 || || 53,000 || || 51,000 || || 65,000 || 356,000 ||

SPECIFIC OBJECTIVE NO 5 To establish new bio-based value chains || || || || || || || || || || || || || || ||

- Output Ten new bio-based value chains || Bio based value chains || 4,000 || || 7,500 || || 16,000 || || 15,500 || || 11,000 || || 9,500 || || 9,000 || || 15,000 || 83,500 ||

Subtotal for specific objective No 5 || || 7,500 || || 16,000 || || 15,500 || || 11,000 || || 9,500 || || 9,000 || || 15,000 || 83,500 ||

|| || || || || || || || || || || || || || ||

TOTAL COST || 67,500 || 217,500 || 178,000 || 153,500 || 157,000 || 158,500 || 230,500 || 1.162,500 ||

EU contribution to operational costs
amounts to EUR 980 millions.

3.2.3.     Estimated impact on human
resources

3.2.3.1.  Summary of the BBI Joint
Undertaking

 ̈         The proposal/initiative does not require the use of
appropriations of an administrative nature

X The proposal/initiative requires the use
of appropriations of an administrative nature, as described below:

Staffing numbers
(in FTE)[39]

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || Year 2022 || Year 2023 || Year 2024*

Officials (AD Grades) || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2

Officials (AST Grades) || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2 || 2

Contract agents || 12 || 18 || 18 || 18 || 18 || 18 || 18 || 18 || 18 || 18 || 18

Temporary agents ||   ||   ||   ||   ||   ||   ||   || ||   || ||

Seconded National Experts || || || || || || || || || || ||

TOTAL || 16 || 22 || 22 || 22 || 22 || 22 || 22 || 22 || 22 || 22 || 22

*In case of no renewal of the JTI, the staff numbers
will be decreased accordingly during the phasing out period (after 2020) taking
into account the financial commitments. This table represents the maximum
scenario.

EUR million (to three decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || Year 2022 || Year 2023 || Year 2024

Officials (AD Grades) || 0.216 || 0.220 || 0.224 || 0.229 || 0.233 || 0.238 || 0.243 || 0.247 || 0.252 || 0.257 || 0.263

Officials (AST Grades) || 0.216 || 0.220 || 0.224 || 0.229 || 0.233 || 0.238 || 0.243 || 0.247 || 0.252 || 0.257 || 0.263

Contract agents || 0.564 || 0.863 || 0.880 || 0.898 || 0.916 || 0.934 || 0.953 || 0.972 || 0.991 || 1.011 || 1.031

Temporary agents || || || || || || || || || || ||

Seconded National Experts || || || || || || || || || || ||

TOTAL || 0.996 || 1.303 || 1.328 || 1.356 || 1.382 || 1.410 || 1.439 || 1.466 || 1.495 || 1.525 || 1.557

3.2.3.2.  Estimated requirements of
human resources for the parent DG (DG RTD)

-           The proposal/initiative does
not require the use of human resources.

X         The proposal/initiative requires
the use of human resources, as described below:

Estimate to be expressed in numbers

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020*

Ÿ Establishment plan posts (officials and temporary staff)

XX 01 01 01 (Headquarters and Commission’s Representation Offices) || || || || || || ||

XX 01 01 02 (Delegations) || || || || || || ||

08 01 05 01 (Indirect research) || 3 || 3 || 3 || 3 || 3 || 3 || 3

10 01 05 01 (Direct research) || || || || || || ||

Ÿ External staff (in Full Time Equivalent: FTE)[40]

XX 01 02 01 (CA, SNE, INT from the ‘global envelope’) || || || || || || ||

XX 01 02 02 (CA, LA, SNE, INT and JED in the delegations) || || || || || || ||

XX 01 04 yy[41] || - at Headquarters[42] || || || || || || ||

- in delegations || || || || || || ||

XX 01 05 02 (CA, SNE, INT - Indirect research) || || || || || || ||

10 01 05 02 (CA, SNE, INT- Direct research) || || || || || || ||

Other budget lines (specify) || || || || || || ||

TOTAL || 3 || 3 || 3 || 3 || 3 || 3 || 3

*
The staff number for the period after 2020 will be decided at the later stage.

The human resources required will be met by
staff from the DG who are already assigned to management of the action and/or
have been redeployed within the DG, together if necessary with any additional
allocation which may be granted to the managing DG under the annual allocation
procedure and in the light of budgetary constraints.

Description of
tasks to be carried out:

Officials and temporary staff || As described in the Statutes of the BBI Joint Undertaking , Clauses 4 and 6

External staff || Not applicable

Description of the calculation of cost for
FTE equivalent should be included in the Annex, section 3.

Estimated requirements of human resources for the BBI JU[43]

 ̈         The proposal/initiative does not require the use of human
resources.

X         The proposal/initiative requires
the use of human resources, as described below:

a. Estimated requirements of human
resources to be financed from appropriations under 2014-2020 Multiannual
Financial Framework

Estimate to be expressed in numbers

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020*

Ÿ Establishment plan posts (temporary staff)

|| || || || || || ||

08 02 07 32 – Societal challenges – JTI BBI || ||   ||   ||   ||   ||   ||

Officials (AD grades) || 2 || 2 || 2 || 2 || 2 || 2 || 2

Officials (AST grades) || 2 || 2 || 2 || 2 || 2 || 2 || 2

Ÿ External staff (in Full Time Equivalent: FTE)[44]

08 02 07 32 – Societal challenges – JTI BBI || || || || || || ||

TA || || || || || || ||

CA || 12 || 18 || 18 || 18 || 18 || 18 || 18

SNE || || || || || || ||

INT || || || || || || ||

TOTAL || 16 || 22 || 22 || 22 || 22 || 22 || 22

- for 2021-2024,
please refer to table 3.2.3.1

Description of
tasks to be carried out:

Officials and temporary staff || As described in the Statutes of the BBI Joint Undertaking , Clauses 4 and 6

External staff || As described in the Statutes of the BBI Joint Undertaking , Clauses 4 and 6

Description of the calculation of cost for
FTE equivalent should be included in the Annex, section 3.

3.2.4.     Compatibility with the
current multiannual financial framework

X         Proposal/initiative is compatible
the current multiannual financial framework (MFF 2014-2020).

 ̈         Proposal/initiative will entail reprogramming of the
relevant heading in the multiannual financial framework.

Explain what reprogramming is required,
specifying the budget lines concerned and the corresponding amounts.

 ̈         Proposal/initiative requires application of the flexibility
instrument or revision of the multiannual financial framework[45].

Explain what is required, specifying the
headings and budget lines concerned and the corresponding amounts.

3.2.5.     Third-party contributions

 ̈ The proposal/initiative does not provide for co-financing by third
parties.

X The proposal/initiative provides for the
co-financing estimated below:

Appropriations in EUR million (to three decimal
places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 -2024 || Total

Specify the co-financing body – contribution in cash to the administrative costs || 1,955 || 2,096 || 2,243 || 2,453 || 2,621 || 2,527 || 6,105 || 20,000

Specify the co-financing body – contribution in cash to the operational costs* || 17,500 || 17,500 || 17,500 || 17,500 || 17,500 || 17,500 || 77,500 || 182,500

TOTAL appropriations cofinanced || 19,455 || 19,596 || 19,743 || 19,953 || 20,121 || 20,027 || 83,605 || 202,500

The contributions in cash will include a
minimum of EUR 182.5 million from Industry for the operational costs.

The
total contribution from members other than the Union are laid down by Article 4
of the Council Regulation of the BBI Joint Undertaking

3.3.        Estimated impact on
revenue

X         Proposal/initiative has no
financial impact on revenue.

[1]               COM(2012) 79

[2]               DG REGIO (2012) Connecting Smart and Sustainable
Growth through Smart Specialisation: A practical guide for ERDF managing
authorities

[3]               COM(2012)
60

[4]               COM(2012)
582

[5]               COM(2013) [...]

[6]               CDR1112-2012

[7]               The study (to be published by the end of 2013)
explores whether consumers are able to make informed choices, by looking into
consumer understanding and the transparency of information. It is expected to
generate recommendations on improving and harmonising fuel labelling at the
pump across EU Member States. The study also tackles the issue of the
availability of different fuels and retailers, and retail prices.

[8]               COM(2012)60
and SWD(2012)11

[9]               OECD(2009)
The bioeconomy to 2030: Designing a Policy Agenda

[10]             Festel,
G. (2011) Presentation at the 4th Annual European Forum for Industrial
Biotechnology & The Biobased Economy, Amsterdam, 20 October 2011

[11]             WEF (2010) The future of Industrial Biorefineries

[12]             OECD(2009) The bioeconomy to 2030: Designing a Policy
Agenda

[13]             COM(2012)
582

[14]             Bloomberg New Energy Finance (2010) Next-generation
ethanol and biochemicals: What's in it for Europe

[15]             In current prices

[16]             OJ ... [EP opinion]

[17]             OJ ... [ESC opinion]

[18]             OJ L 412, 30.12.2006, p. 1.

[19]             OJ L 400, 30.12.2006, p. 86.

[20]             OJ ... [H2020 FP]

[21]             OJ ... [H2020 SP]

[22]             COM(2010)2020 final.

[23]             COM(2012) 60.

[24]             COM(2012) 582 final.

[25]             COM(2007) 860 final.

[26]             OJ ... [H2020 RfP]

[27]             OJ L 362, 31.12.2012, p. 1.

[28]             OJ L 298, 26.10.2012, p.1.

[29]             OJ 56, 4.3.1968, p. 1.

[30]             OJ L 136, 31.05.1999, p. 1.

[31]             OJ L 292, 15.11.1996, p. 2-5.

[32]             OJ L 136, 31.5.1999, p. 15.

[33]             OJ L 145, 31.5.2001, p. 43.

[34]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[35]             As referred to in Article 54(2)(a) or (b) of the
Financial Regulation.

[36]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site:
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[37]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).

[38]             As described in point 1.4.2. ‘Specific objective(s)...’

[39]             In the case of PPP bodies under Article 209 FR, this
table is included for information purposes.

[40]             CA= Contract Agent; LA = Local Agent; SNE = Seconded
National Expert; INT= agency staff (‘Intérimaire’).

[41]             Sub‑ceiling for external staff covered by
operational appropriations (former "BA" lines).

[42]             Mainly for the Structural Funds, the European
Agricultural Fund for Rural Development (EAFRD) and the European Fisheries Fund
(EFF).

[43]             In the case of PPP bodies under Article 209 FR, this
section is included for information purposes.

[44]             CA = Contract Agent; LA = Local Agent; SNE = Seconded
National Expert; INT = agency staff (‘Intérimaire’).

[45]             See points 19 and 24 of the Interinstitutional
Agreement.