# L_2017252EN.01035201.xml

| 29.9.2017 | EN | Official Journal of the European Union | L 252/352 |
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29.9.2017

EN

Official Journal of the European Union

L 252/352

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RESOLUTION (EU) 2017/1739 OF THE EUROPEAN PARLIAMENT

of 27 April 2017

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the Fuel Cells and Hydrogen 2 Joint Undertaking for the financial year 2015

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the Fuel Cells and Hydrogen 2 Joint Undertaking for the financial year 2015, |
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having regard to its decision on discharge in respect of the implementation of the budget of the Fuel Cells and Hydrogen 2 Joint Undertaking for the financial year 2015,

| — | having regard to Rule 94 of and Annex IV to its Rules of Procedure, |
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having regard to Rule 94 of and Annex IV to its Rules of Procedure,

| — | having regard to the report of the Committee on Budgetary Control (A8-0109/2017), |
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having regard to the report of the Committee on Budgetary Control (A8-0109/2017),

| A. | whereas the Fuel Cells and Hydrogen Joint Undertaking (‘FCH’) was set up in May 2008 as a public-private partnership by Council Regulation (EC) No 521/2008 for a period until 31 December 2017 to focus on developing market applications and hence facilitate additional industrial efforts towards a rapid deployment of fuel cells and hydrogen technologies; whereas Regulation (EC) No 521/2008 was repealed by Regulation (EU) No 559/2014; |
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A.

whereas the Fuel Cells and Hydrogen Joint Undertaking (‘FCH’) was set up in May 2008 as a public-private partnership by Council Regulation (EC) No 521/2008 for a period until 31 December 2017 to focus on developing market applications and hence facilitate additional industrial efforts towards a rapid deployment of fuel cells and hydrogen technologies; whereas Regulation (EC) No 521/2008 was repealed by Regulation (EU) No 559/2014;

| B. | whereas Regulation (EU) No 559/2014 established the Fuel Cells and Hydrogen 2 Joint Undertaking (‘FCH2’) in May 2014 to replace and succeed FCH for a period until 31 December 2024; |
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B.

whereas Regulation (EU) No 559/2014 established the Fuel Cells and Hydrogen 2 Joint Undertaking (‘FCH2’) in May 2014 to replace and succeed FCH for a period until 31 December 2024;

| C. | whereas the Members of FCH were the Union, represented by the Commission, the European Fuel Cell and Hydrogen Joint Technology Initiative Industry Grouping (‘Industry Grouping’), and the New European Research Grouping on Fuel Cells and Hydrogen AISBL — N.ERGHY (‘Research Grouping’); |
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C.

whereas the Members of FCH were the Union, represented by the Commission, the European Fuel Cell and Hydrogen Joint Technology Initiative Industry Grouping (‘Industry Grouping’), and the New European Research Grouping on Fuel Cells and Hydrogen AISBL — N.ERGHY (‘Research Grouping’);

| D. | whereas the Members of FCH2 are the Union, represented by the Commission, the Industry Grouping Hydrogen Europe (‘Industry Grouping2’) and the Research Grouping ‘N.ERGHY’ (‘Research Grouping2’); |
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D.

whereas the Members of FCH2 are the Union, represented by the Commission, the Industry Grouping Hydrogen Europe (‘Industry Grouping2’) and the Research Grouping ‘N.ERGHY’ (‘Research Grouping2’);

| E. | whereas the maximum Union contribution for their period of activity is EUR 470 000 000 to FCH and EUR 665 000 000 to FCH2, to be paid from the budgets of the Seventh Framework Programme and Horizon 2020, as applicable, of which the proportion earmarked for running costs is not to exceed EUR 20 000 000 and EUR 19 000 000 respectively; |
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E.

whereas the maximum Union contribution for their period of activity is EUR 470 000 000 to FCH and EUR 665 000 000 to FCH2, to be paid from the budgets of the Seventh Framework Programme and Horizon 2020, as applicable, of which the proportion earmarked for running costs is not to exceed EUR 20 000 000 and EUR 19 000 000 respectively;

| F. | whereas in FCH2, the Industry Grouping2 and the Research Grouping2 are, together, to contribute 50 % of the running costs, the Industry Grouping2 contributing 43 % and the Research Grouping2 7 % of the running costs, and both are to contribute to operational costs through in-kind contributions and to the objectives of FCH2 through in-kind contributions in additional activities (‘IKAA’) with a minimum amount of EUR 380 000 000 of which at least EUR 285 000 000 in IKAA; |
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F.

whereas in FCH2, the Industry Grouping2 and the Research Grouping2 are, together, to contribute 50 % of the running costs, the Industry Grouping2 contributing 43 % and the Research Grouping2 7 % of the running costs, and both are to contribute to operational costs through in-kind contributions and to the objectives of FCH2 through in-kind contributions in additional activities (‘IKAA’) with a minimum amount of EUR 380 000 000 of which at least EUR 285 000 000 in IKAA;

Budget and financial management

Budget and financial management

| 1. | Notes that the report of the Court of Auditors (the ‘Court’) on the Joint Undertaking's annual accounts (the ‘Court's report’) finds the 2015 annual accounts of FCH to present fairly, in all material respects, its financial position on 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with the provisions of its financial rules; |
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1.

Notes that the report of the Court of Auditors (the ‘Court’) on the Joint Undertaking's annual accounts (the ‘Court's report’) finds the 2015 annual accounts of FCH to present fairly, in all material respects, its financial position on 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with the provisions of its financial rules;

| 2. | Notes that the final budget of FCH2 for the financial year 2015 included commitment appropriations of EUR 132 583 855 and payment appropriations of EUR 95 089 121; notes that commitment appropriations increased by 17 % compared to 2014 mainly due to the higher amount for 2015 call of proposals and payment appropriations showed a decrease of 2 % compared to 2014; |
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2.

Notes that the final budget of FCH2 for the financial year 2015 included commitment appropriations of EUR 132 583 855 and payment appropriations of EUR 95 089 121; notes that commitment appropriations increased by 17 % compared to 2014 mainly due to the higher amount for 2015 call of proposals and payment appropriations showed a decrease of 2 % compared to 2014;

| 3. | Notes from its annual activity report that FCH2 continued ex-post audits with the launch of 29 new audits; welcomes the fact that the residual error rate was at 0,98 %; |
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3.

Notes from its annual activity report that FCH2 continued ex-post

| 4. | Notes that FCH2 has set up ex-ante procedures based on financial and operational data reviews, and performs ex post audits of grant beneficiaries; notes that those checks are key tools for assessing the legality and regularity of operations; |
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4.

Notes that FCH2 has set up ex-ante

ex post

| 5. | Points out that the budget execution by year end for all fund sources reached 87,3 % as regards commitment appropriations, representing a slight decrease compared to previous year due to the outcome of the evaluation for the 2015 call; notes that a number of project proposals were rejected as they did not meet the required quality, resulting in unused commitment appropriations of EUR 13 700 000; notes that the payment execution rate was at 83 %, representing the best execution rate of payments for FCH2 to date; |
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5.

Points out that the budget execution by year end for all fund sources reached 87,3 % as regards commitment appropriations, representing a slight decrease compared to previous year due to the outcome of the evaluation for the 2015 call; notes that a number of project proposals were rejected as they did not meet the required quality, resulting in unused commitment appropriations of EUR 13 700 000; notes that the payment execution rate was at 83 %, representing the best execution rate of payments for FCH2 to date;

| 6. | Notes that, of the total operational commitments of EUR 193 500 000 made in 2015, 42,6 % were individual commitments based on completed award procedures for grants and contracts; notes that 57,3 % were global commitments for which the award procedure was not completed due to the time required for the evaluation and negotiation procedures for the 2015 calls for proposals for Horizon 2020 projects; |
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6.

Notes that, of the total operational commitments of EUR 193 500 000 made in 2015, 42,6 % were individual commitments based on completed award procedures for grants and contracts; notes that 57,3 % were global commitments for which the award procedure was not completed due to the time required for the evaluation and negotiation procedures for the 2015 calls for proposals for Horizon 2020 projects;

| 7. | Welcomes the fact that a total of 59 research and industry organisations reported their investments for a cumulative total amount of EUR 188 570 000, representing over 60 % of the target set for the entire duration of FCH2; |
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7.

Welcomes the fact that a total of 59 research and industry organisations reported their investments for a cumulative total amount of EUR 188 570 000, representing over 60 % of the target set for the entire duration of FCH2;

| 8. | Acknowledges the fact that the sector manifested a clear intention to invest, develop and commercialise its innovative technologies, both on the side of industry and research; notes that IKAA submissions coming from 16 different Members States, with a 33 to 67 % split between research and industry submissions in terms of number of entities; welcomes the fact that the fuel cells and hydrogen sector is determined to continue on the same path by doing its utmost to produce strong figures for the next 2016 reporting period; |
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8.

Acknowledges the fact that the sector manifested a clear intention to invest, develop and commercialise its innovative technologies, both on the side of industry and research; notes that IKAA submissions coming from 16 different Members States, with a 33 to 67 % split between research and industry submissions in terms of number of entities; welcomes the fact that the fuel cells and hydrogen sector is determined to continue on the same path by doing its utmost to produce strong figures for the next 2016 reporting period;

| 9. | Notes that when the final accounts were prepared, the FCH2 did not receive the required reports from its members implementing Horizon 2020 projects as they were not yet due and therefore observes that the amount of 2015 in-kind contributions for the Horizon 2020 entered in the accounts was based on estimation by FCH2 of the costs incurred by members up to the end of 2015; points out in this respect that in-kind contributions will be communicated as a part of the first reporting under projects that is due in September 2016; recalls that the Court's report recommends that the Commission should present clear guidelines for the budgetary reporting and financial management of FCH2 and notes that those guidelines were issued on 20 December 2016 following that recommendation; |
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9.

Notes that when the final accounts were prepared, the FCH2 did not receive the required reports from its members implementing Horizon 2020 projects as they were not yet due and therefore observes that the amount of 2015 in-kind contributions for the Horizon 2020 entered in the accounts was based on estimation by FCH2 of the costs incurred by members up to the end of 2015; points out in this respect that in-kind contributions will be communicated as a part of the first reporting under projects that is due in September 2016; recalls that the Court's report recommends that the Commission should present clear guidelines for the budgetary reporting and financial management of FCH2 and notes that those guidelines were issued on 20 December 2016 following that recommendation;

Transfer

Transfer

| 10. | Notes that two budget transfers were made between different budget lines of the same Chapter in order to better allocate the resources needed for the administrative costs; points out that those transfers did not have any impact on the voted budget; |
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10.

Notes that two budget transfers were made between different budget lines of the same Chapter in order to better allocate the resources needed for the administrative costs; points out that those transfers did not have any impact on the voted budget;

Calls for proposal

Calls for proposal

| 11. | Acknowledges the fact that FCH2 successfully made the transition to Horizon 2020 by completing the signature of the first grant agreements resulting from the 2014 call; notes that by the end of 2015 FCH2 had 15 ongoing Horizon 2020 projects from the 2014 and 15 under preparation from the 2015 call; |
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11.

Acknowledges the fact that FCH2 successfully made the transition to Horizon 2020 by completing the signature of the first grant agreements resulting from the 2014 call; notes that by the end of 2015 FCH2 had 15 ongoing Horizon 2020 projects from the 2014 and 15 under preparation from the 2015 call;

| 12. | Notes that the first grant agreements under Horizon 2020 (the 2014 call) were signed with an average eight months to grant (except in three duly justified cases) reflecting the efforts made to have a swift grant preparation phase in a context of new rules and new tools; highlights that those 15 projects represent a contribution of EUR 82 100 000 of which 55 % for innovation actions and 41 % for research and innovation actions with the remaining 4 % for cross-cutting activities; notes that small and medium-sized enterprises represented 25 % of the number of participants in successful projects and 24 % of FCH contribution in the 2014 call; |
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12.

Notes that the first grant agreements under Horizon 2020 (the 2014 call) were signed with an average eight months to grant (except in three duly justified cases) reflecting the efforts made to have a swift grant preparation phase in a context of new rules and new tools; highlights that those 15 projects represent a contribution of EUR 82 100 000 of which 55 % for innovation actions and 41 % for research and innovation actions with the remaining 4 % for cross-cutting activities; notes that small and medium-sized enterprises represented 25 % of the number of participants in successful projects and 24 % of FCH contribution in the 2014 call;

| 13. | Notes that FCH2's second call for proposals under Horizon 2020 was published on 5 May 2015 with a deadline for submission of proposals on 27 August 2015 and an estimated budget of EUR 123 000 000 and that 61 eligible proposals were received, which resulted in 15 projects being selected for total funding of EUR 109 916 764; |
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13.

Notes that FCH2's second call for proposals under Horizon 2020 was published on 5 May 2015 with a deadline for submission of proposals on 27 August 2015 and an estimated budget of EUR 123 000 000 and that 61 eligible proposals were received, which resulted in 15 projects being selected for total funding of EUR 109 916 764;

Legal framework

Legal framework

| 14. | Observes that the financial rules applicable to the general budget of the Union were amended by Regulation (EU, Euratom) 2015/1929; notes that FCH2 must revise its financial rules to align them with the revised model; notes that FCH2's revised financial regulation was adopted by its governing board in May 2016, after the draft was submitted to the Commission for approval; |
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14.

Observes that the financial rules applicable to the general budget of the Union were amended by Regulation (EU, Euratom) 2015/1929; notes that FCH2 must revise its financial rules to align them with the revised model; notes that FCH2's revised financial regulation was adopted by its governing board in May 2016, after the draft was submitted to the Commission for approval;

| 15. | Notes that the Commission's internal audit system (IAS) completed an audit on the evaluation and selection process for Horizon 2020 grant proposals at FCH2 in November 2015; highlights the fact that the IAS made recommendations regarding improvements of the clarity and transparency of FCH2's selection of topics for proposals; calls on FCH2 to report to the discharge authority regarding improvements which have been taking in order to make the selection procedure more transparent; |
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15.

Notes that the Commission's internal audit system (IAS) completed an audit on the evaluation and selection process for Horizon 2020 grant proposals at FCH2 in November 2015; highlights the fact that the IAS made recommendations regarding improvements of the clarity and transparency of FCH2's selection of topics for proposals; calls on FCH2 to report to the discharge authority regarding improvements which have been taking in order to make the selection procedure more transparent;

Prevention and management of conflicts of interest and transparency

Prevention and management of conflicts of interest and transparency

| 16. | Welcomes the fact that, on the basis of a recommendation from the discharge authority and a recommendation from an audit performed jointly by the Commission's IAS and the FCH2's internal auditor, FCH2 prepared internal rules which specify in a more comprehensive way the obligations in terms of conflicts of interests; acknowledges with satisfaction the fact that in the framework of its internal control awareness session held on 30 November 2015, FCH2's staff members received training on the definition and possible prevention of conflicts of interests, and reporting requirements in terms of acceptance of gifts, favours or payments; |
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16.

Welcomes the fact that, on the basis of a recommendation from the discharge authority and a recommendation from an audit performed jointly by the Commission's IAS and the FCH2's internal auditor, FCH2 prepared internal rules which specify in a more comprehensive way the obligations in terms of conflicts of interests; acknowledges with satisfaction the fact that in the framework of its internal control awareness session held on 30 November 2015, FCH2's staff members received training on the definition and possible prevention of conflicts of interests, and reporting requirements in terms of acceptance of gifts, favours or payments;

| 17. | Notes with satisfaction that FCH2 took part in, and implemented in 2015, the preventive and corrective measures in line with the newly adopted common ‘anti-fraud strategy and anti-fraud action plan’ at Commission level; |
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17.

Notes with satisfaction that FCH2 took part in, and implemented in 2015, the preventive and corrective measures in line with the newly adopted common ‘anti-fraud strategy and anti-fraud action plan’ at Commission level;

Other

Other

| 18. | Highlights the fact that basic research contributing to FCH2's goals should not be excluded from other Horizon 2020 calls if there is clearly no duplication with FCH2 calls; |
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18.

Highlights the fact that basic research contributing to FCH2's goals should not be excluded from other Horizon 2020 calls if there is clearly no duplication with FCH2 calls;

| 19. | Notes that internal control procedures have been established within the Joint Undertaking in order to provide a reasonable assurance that fraud and irregularities will be detected and prevented; |
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19.

Notes that internal control procedures have been established within the Joint Undertaking in order to provide a reasonable assurance that fraud and irregularities will be detected and prevented;

| 20. | Notes that general rules for employees, drawn up on the basis of a Commission template, should have been submitted to the Board for approval by the end of 2016; |
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20.

Notes that general rules for employees, drawn up on the basis of a Commission template, should have been submitted to the Board for approval by the end of 2016;

| 21. | Calls on the Commission to ensure the direct involvement of FCH2 in the process of the Horizon 2020 mid-term review with regard to the further simplification and harmonisation of procedures relating to joint undertakings. |
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21.

Calls on the Commission to ensure the direct involvement of FCH2 in the process of the Horizon 2020 mid-term review with regard to the further simplification and harmonisation of procedures relating to joint undertakings.

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