P8_TC1-COD(2018)0224

Position of the European Parliament adopted at first reading on 17 April 2019 with a view to the adoption of Regulation (EU) …/… of the European Parliament and of the Council establishing Horizon Europe — the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 173(3), Article 182(1), Article 183, and the second paragraph of Article 188 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

(1) It is the Union's objective to strengthen its scientific excellence and technological bases in which researchers, scientific knowledge and technology circulate freely and encourage its competitiveness, including in its industry, to strengthen the European Research Area while promoting all research and innovation activities to deliver on the Union's strategic priorities, and commitments which ultimately aim at promoting peace, the Union's values and the well-being of its peoples.

(2) To deliver scientific, economic and societal impact in pursuit of this general objective and maximise the Union’s added value of its RDI investments, the Union should invest in research and innovation through Horizon Europe — a Framework Programme for Research and Innovation 2021-2027 (the ‘Programme’) to support the creation ▌ diffusion and transfer of high-quality knowledge and technologies in the Union , to strengthen the impact of research and innovation in addressing global challenges including the Sustainable Development Goals and climate change, and in developing, supporting and implementing Union policies, to support the uptake of innovative and sustainable solutions in the Union’s industry and society to create jobs and boost economic growth and industrial competitiveness; The Programme should foster all forms of innovation, ▌ strengthen market deployment of innovative solutions; and optimise the delivery of investments .

(2a) The Programme should contribute to increasing public and private investment in R&I in Member States thereby helping to reach an overall investment of at least 3 % of the Union’s GDP in research and development. The achievement of the target will require Member States and the private sector to complement the Programme with their own and reinforced investment actions in research, development and innovation.

(2b) In view of achieving the objectives of this Programme and whilst respecting the principle of excellence, the Programme should aim to strengthen, among others, collaborative links in Europe, thereby contributing to reducing the R&I divide.

(3) The promotion of research and innovation activities deemed necessary to help realise Union policy objectives should take into account the innovation principle ▌ a key driver in turning faster and more intensively the Union’s substantial knowledge assets into innovations .

(4) The continuation of ‘ Open Science, Open Innovation, Open to the World ’ while safeguarding the Union’s scientific and socio-economic interests should ensure excellence and impact of the Union's investment in research and innovation. and strengthen the R&I capacity of all Member States. That should ▌ lead to a balanced implementation of the Programme▌.

(5) Open science ▌ has the potential to increase the quality, impact and benefits of science and to accelerate the advancement of knowledge by making it more reliable, more efficient and accurate, better understandable by society and responsive to societal challenges. Provisions should be laid down to ensure that beneficiaries provide open access to peer-reviewed scientific publications, research data and other research outputs in an open and non-discriminatory manner, free of charge and as early as possible in the dissemination process, and to enable their widest possible use and re-use. As far as research data is concerned, the principle should be ‘as open as possible, as closed as necessary’, thereby ensuring the possibility of exceptions taking into consideration the Union’s socio-economic interest, intellectual property rights, personal data protection and confidentiality, security concerns and other legitimate interests. More emphasis should ▌ be given to the responsible management of research data, which should comply with the FAIR principles of ‘Findability’, ‘Accessibility’, ‘Interoperability’ and ‘Reusability’, notably through the mainstreaming of Data Management Plans. Where appropriate, beneficiaries should make use of the possibilities offered by the European Open Science Cloud and the European Data Infrastructure and adhere to further open science principles and practices. Reciprocal open access should be encouraged in international S&T cooperation agreements and in relevant association agreements.

(5a) SME beneficiaries are encouraged to make use of the existing instruments such as IPR SME Helpdesk that supports European Union small and medium sized enterprises to both protect and enforce their Intellectual Property (IP) rights through the provision of free information and services, in the form of confidential advice on intellectual property and related issues, plus training, materials and online resources.

(6) The conception and design of the Programme should respond to the need for establishing a critical mass of supported activities, throughout the ▌ Union and through international cooperation , while encouraging the participation of all Member States in the Programme , in line with the UN Sustainable Development Goals (SDGs) and the Paris Agreement . Programme implementation should reinforce the pursuit of this aim.

(7) Activities supported under the Programme should contribute towards the achievement of the Union's and the Programme’s objectives, ▌priorities and commitments , the monitoring and assessment of progress against those objectives ,▌ priorities and commitments and for the development of revised or new priorities.

( 7a ) The Programme should seek alignment with already existing European research and innovation roadmaps and strategies.

(8) The Programme should maintain a balanced approach between bottom-up (investigator or innovator driven) and top-down (determined by strategically defined priorities) funding, according to the nature of the research and innovation communities that are engaged across the Union , the success rates per area of intervention, the types and purpose of the activities carried out , the subsidiarity principle and the impacts that are sought. The mix of these factors should determine the choice of approach for the respective parts of the Programme, all of which contribute to all of the Programme’s general and specific objectives.

(8-a) The overall budget for the Widening participation and spreading excellence strand of the ‘Widening participation and strengthening the European Research Area’ part of Horizon Europe should be at least 3,3 % of the overall Horizon Europe budget. This budget should mainly benefit legal entities in the widening countries.

(8-b) Excellence Initiatives should aim to strengthen research and innovation excellence in the eligible countries, including for instance supporting training to improve R&I managerial skills, prizes, strengthening innovation ecosystems as well as the creation of R&I networks, including on the basis of research infrastructures financed by the EU. Applicants need to clearly show that projects are linked with national and/or regional R&I strategies to be able to apply for funding under the widening participation and spreading excellence of the ‘Widening participation and strengthening the European Research Area’ part of Horizon Europe.

(8 a ) A number of research and innovation actions should apply a Fast Track to Research and Innovation logic where time-to-grant should not exceed six months. This should allow a faster, bottom-up access to funds for small collaborative consortia covering actions from fundamental research to market application.

(8b) The Programme should support all stages of research and innovation especially within collaborative projects. Fundamental research is an essential asset and an important condition for increasing the Union’s ability to attract the best scientists in order to become a global hub of excellence. The balance between basic and applied research should be ensured. Coupled with innovation, this will support the Union’s economic competitiveness, growth and jobs.

(8c) In order to maximise the impact of Horizon Europe particular consideration should be given to multidisciplinary, interdisciplinary and transdisciplinary approaches as necessary elements for major scientific progress.

(8d) The engagement with society is to be fostered through responsible research and innovation as a cross-cutting element with a view to build effective cooperation between science and society. It would allow all societal actors (researchers, citizens, policy makers, business, third sector organisations etc.) to work together during the whole research and innovation process in order to better align both the process and its outcomes with the values, needs and expectations of European society.

(9) Research activities carried out under the pillar ‘' Excellent and Open Science’ should be determined according to the needs and opportunities of science. The research agenda should be set in close liaison with the scientific community and include emphasis on attracting new R&I talents, young researchers, while strengthening the ERA and avoiding brain drain. Research should be funded on the basis of excellence.

(10) The pillar ‘Global Challenges and European Industrial Competitiveness’ should be established through clusters of research and innovation activities, in order to maximise integration across the respective work areas while securing high and sustainable levels of impact for the Union in relation to the resources that are expended. It will encourage cross-disciplinary, cross-sectoral, cross-policy and cross-border collaboration in pursuit of the UN SDGs and the Union’s commitments under the Paris Agreement and where needed to address societal challenges, and the competitiveness of the Union's industries therein. The activities under this pillar should cover the full range of research and innovation activities including R&D, piloting, demonstration, and support for public procurement, pre-normative research and standard setting, and market uptake of innovations to ensure that Europe stays at the cutting-edge of research in strategically defined priorities.

(11) Full and timely engagement of industry in the Programme, at all levels from the individual entrepreneur and small and medium-sized enterprises to large scale enterprises, should ▌ specifically towards the creation of sustainable jobs and growth. ▌

(12) It is important to support the Union’s industry to stay or become world leader in innovation, digitisation and decarbonisation, notably through investments in key enabling technologies that will underpin tomorrow's business. Key Enabling Technologies (KETs) are set to play a central role in Pillar II ‘Global Challenges and European Industrial Competitiveness’ and should be further connected to the Future and Emerging Technologies (FET) Flagships to allow research projects to cover the whole innovation chain. The Programme's actions should reflect the Union’s Industrial Policy Strategy so as to address market failures or sub-optimal investment situations , to boost investments in a proportionate and transparent manner, without duplicating or crowding out private financing and have a clear European added value and public return on investments . This will ensure consistency between the actions of the programme and EU RDI State aid rules, which should be revised in order to incentivise innovation .

(13) The Programme should support research and innovation in an integrated manner, respecting all relevant provisions of the World Trade Organisation. The concept of research, including experimental development should be used in accordance with the Frascati Manual developed by the OECD, whereas the concept of innovation should be used in accordance with the Oslo Manual developed by the OECD and Eurostat, following a broad approach that covers social innovation , design and creativity . The OECD definitions regarding Technological Readiness Level (TRL) should be taken into account , as in the previous Framework Programme Horizon 2020 ▌. The work programme for a given call under the pillar ‘Global Challenges and Industrial European Competitiveness’ could allow grants for large-scale product validation and market replication.

(14) The Commission's Communication on the interim evaluation of Horizon 2020 (COM(2018)0002) and the European Parliament’s report on the assessment of the implementation of Horizon 2020 in view of its interim evaluation and the Framework Programme 9 proposal (2016/2147(INI)) have provided a set of recommendations for this Programme, including its Rules for participation and dissemination, building on the lessons learnt from the previous Programme as well as input from EU institutions and stakeholders. Those recommendations include to invest more ambitiously in order to reach critical mass and maximise impact; to support breakthrough innovation; to prioritise Union research and innovation (R&I) investments in areas of high added value, notably through mission-orientation, full, well-informed and timely citizen involvement and wide communication; to rationalise the Union funding landscape, in order to fully use the R&I potential of all Member States including by streamlining the range of partnership initiatives and co-funding schemes; the development of more and concrete synergies between different Union funding instruments, notably with the aim of helping to mobilise under-exploited R&I potential across the Union; to better involve research infrastructures financed by the Union — especially from ERDF — into the Programme’s projects, to strengthen international cooperation and reinforce openness to third countries' participation while safeguarding the Union interest and broadening the participation of all Member States in the Programme ; and to continue simplification based on implementation experiences from Horizon 2020.

(15) Cohesion policy should continue to contribute to research and innovation. Therefore, special attention needs to be paid to the coordination and complementarity between the two Union policies. The Programme should seek alignment of rules and synergies with other Union programmes as referred to in Annex IV to this Regulation , from their design and strategic planning, to project selection, management, communication, dissemination and exploitation of results, to monitoring, auditing and governance. With a view to avoiding overlaps and duplication and increasing the leverage of Union funding, as well as decreasing administrative burden for the applicants and the beneficiaries, all types of synergies should follow the principle ‘one action follows one set of rules’: — transfers from other Union programmes including the European Regional Development Fund (ERDF), to Horizon Europe activities can take place on a voluntary basis . In such cases they will follow Horizon Europe rules , but they will be used only for the benefit of the Member State or managing authority, as relevant, deciding to make the transfer; — co-funding of an action by Horizon Europe and another Union programme could also be foreseen while not exceeding the total eligible costs of the action . In such cases, only Horizon Europe rules would apply and double audits should be avoided; — Seals of Excellence should be awarded to all proposals which have passed the ‘excellence’ threshold in Horizon Europe but cannot be financed due to budgetary constraints. In such cases, the rules of the Fund providing support should apply with the exception of state aid rules.

(16) In order to achieve the greatest possible impact of Union funding and the most effective contribution to the Union's policy objectives and commitments , the Programme may enter into European Partnerships with private and/or public sector partners , on the basis of the outcome of the Strategic Planning . Such partners include public and private research and innovation stakeholders, competence centres, business incubators, science and technology parks, bodies with a public service foundations and civil society organisations and regional innovation ecosystems, where appropriate that support and/or carry out research and innovation, provided that desired impacts can be achieved more effectively in partnership than by the Union alone.

(17) The Programme should strengthen cooperation between European Partnerships and private and/or public sector partners at the international level including by joining up research and innovation programmes and cross-border investment in research and innovation bringing mutual benefits to people and businesses while ensuring that the Union can uphold its

(17a) ‘FET Flagships’ have proven to be an effective and efficient instrument, delivering benefits for society in a joint, coordinated effort by the Union and its Member States. Activities carried out within the FET Flagships on Graphene, the Human Brain Project and Quantum Technology, which are supported under Horizon 2020, will continue being supported under Horizon Europe through calls for proposals included in the work programme. Preparatory actions supported under the FET Flagships part of Horizon 2020 will feed the Strategic Planning process under Horizon Europe and inform the work on missions, co-funded/co-programmed partnerships and regular calls for proposals.

(18) The Joint Research Centre (JRC) should continue to provide Union policies with independent customer-driven scientific evidence and technical support throughout the whole policy cycle. The direct actions of the JRC should be implemented in a flexible, efficient and transparent manner, taking into account the relevant needs of the users of the JRC , the budgetary constraints and the needs of Union policies, and ensuring the protection of the financial interests of the Union. The JRC should continue to generate additional resources.

(19) The pillar ‘ Innovative Europe ’ should establish a series of measures for integrated support to the needs of entrepreneurs and research-driven entrepreneurship aiming at realising and accelerating breakthrough innovation for rapid market growth as well as promoting the Union’s technological autonomy in strategic areas . It should attract innovative companies , including SMEs and start-ups, with potential for scaling up at international and at Union level and offer fast, flexible grants and co-investments, including with private investors. These objectives should be pursued through the creation of a European Innovation Council (EIC). This Pillar should also support the European Institute of Innovation and Technology (EIT)) , the EIT Regional Innovation Scheme and European innovation ecosystems at large , throughout the Union , notably through co-funding partnerships with national and regional innovation support actors , both public and private .

(20) In order to address the need to support investment in higher-risk and non-linear activities such as research and innovation, it is essential that Horizon Europe, in particular the EIC, as well as the EIT with its KICs, work in synergy with the financial products to be deployed under InvestEU. In that regard, the experience gained from the financial instruments deployed under Horizon 2020 such as InnovFin and the loan guarantee for SMEs, should serve as a strong basis to deliver this targeted support EIC should develop strategic intelligence and real time evaluation activities in order to timely manage and coordinate its various actions .

(21) The EIC, together with other parts of the Horizon Europe, should stimulate all forms of innovation ranging from incremental to breakthrough and disruptive innovation targeting especially market-creating innovation. The EIC through its instruments — Pathfinder and Accelerator — should aim to identify, develop and deploy high risk innovations of all kinds including incremental with a main focus on breakthrough, disruptive and deep-tech innovations that have the potential to become market-creating innovations . Through coherent and streamlined support, the EIC should fill the current vacuum in public support and private investment for breakthrough innovation. The instruments of the EIC call for dedicated legal and management features in order to reflect its objectives, in particular market deployment activities.

(21a) Within the meaning of this Regulation and in particular for the activities carried out under the EIC, a start-up is an SME in the early stage in its life cycle (including university spin-offs), which aims at innovative solutions and a scalable business model, and which is autonomous within the meaning of Article 3 of the Annex of Commission Recommendation 2003/361/EC (4) ; and a ‘mid-cap’ is a company that is not a micro, small- and medium-sized enterprise as defined in Commission Recommendation 2003/361/EC and that has a number of employees between 250 and 3 000 where the staff headcount is calculated in accordance with Articles 3, 4, 5, and 6 of Title I of the Annex of that Recommendation; a small mid-cap is a mid-cap that has a number of employees up to 499 .

(22) Through EIC blended finance, the EIC Accelerator should bridge the ‘valley of death’ between research, pre-mass commercialisation and the scaling-up of companies. In particular, the Accelerator should provide support to operations presenting such technological or market risks that they are not considered as bankable and cannot leverage significant investments from the market, hence complementing the InvestEU programme established by Regulation … (5).

(22a) SMEs constitute a significant source of innovation and growth in Europe. Therefore, a strong participation of SMEs as defined in Commission Recommendation 2003/361/EC is needed in Horizon Europe. Building on best practices from Horizon 2020, Horizon Europe should continue to encourage SMEs participation to the Framework Programme in an integrated manner.

(22b) While blended finance should be the main use of the EIC Accelerator budget, for the purpose of article 43, the grant-only support of the EIC Accelerator to SMEs, including start-ups, should correspond to that under the SME instrument budget of the previous Framework Programme Horizon 2020 established by Regulation (EU) No 1291/2013 of the European Parliament and the Council (6).

(22c) In close synergy with InvestEU, the EIC Accelerator, in its blended finance and equity financial support forms, should finance SMEs, including start-ups, and, in exceptional cases, projects run by small mid-caps, which are either not yet able to generate revenues, or not yet profitable, or not yet able to attract sufficient investments to implement fully their projects' business plan. Such eligible entities will be considered as non-bankable, while a part of their investment needs could have been or could be provided by one or several investors such as a private or public bank, a family office, a venture capital fund, a business angel, etc. In this way, overcoming a market failure, the EIC Accelerator will finance promising but not yet bankable entities carrying out breakthrough market creating innovation projects. Once they will become bankable, those projects may, in a later stage of their development, be financed under InvestEU.

(23) The EIT, primarily through its Knowledge and Innovation Communities (KICs) and the EIT Regional Innovation Scheme should aim at strengthening innovation ecosystems for the development of an overall Union capacity for innovation that tackle global challenges, by fostering the integration of business, research, higher education and entrepreneurship. In line with its founding act, the EIT Regulation (7) and the Strategic Innovation Agenda of the EIT (8), the EIT should foster innovation in its activities and should support the integration of higher education within the innovation ecosystem, in particular by: stimulating entrepreneurial education, fostering strong non-disciplinary collaborations between industry and academia; and identifying prospective skills for future innovators to address global challenges, which includes advanced digital and innovation skills. Support schemes provided by the EIT should benefit to EIC beneficiaries, while start-ups emerging from EIT KICs should have fast-track access to EIC actions. While the EIT’s focus on innovation ecosystems should make it naturally fit within the pillar ‘ Innovative Europe ’ , it should also support all other pillars, as appropriate , the planning of its KICs should be aligned through the strategic planning process with the pillar ‘Global Challenges and European Industrial Competitiveness’. Duplication between KICs and other instruments in the same field, in particular other Partnerships, should be avoided.

(24) Ensuring and preserving a level playing field for companies that compete in a given market should be a key requirement for breakthrough or disruptive innovation to flourish thereby enabling in particular small and medium-size innovators to reap the benefits of their investment and to capture a share of the market. Similarly, a certain degree of openness in the innovation scale of funded actions — addressing a large network of beneficiaries — may contribute substantially to the building capacity of SMEs, as it provides them with the necessary means to attract investments and to thrive.

(25) The Programme should promote and integrate cooperation with third countries and international organisations and initiatives based on Union’s interest, and mutual benefits and global commitments to implement the UN SDGs. International cooperation should aim to strengthen the Union's excellence in research and innovation ▌, attractiveness and economic and industrial competitiveness, to tackle global challenges, as embodied in the UN SDGs, and to support the Union's external policies. An approach of general opening for excellence in international participation and targeted international cooperation actions should be followed, ▌ appropriate eligibility criteria, considering different levels of R&I capacities, for funding of entities established in low to middle income countries need to be applied . At the same time, association of third countries to the Programme should be promoted where reciprocity is envisaged and where Union’s interest is safeguarded and increased participation of all Member States in the Programme is promoted .

(26) With the aim of deepening the relationship between science and society and maximising benefits of their interactions, the Programme should engage and involve citizens and civil society organisations in co-designing and co-creating responsible research and innovation (RRI) agendas and contents, that meet citizens’ and civil society’s concerns, needs and expectations, promoting science education, making scientific knowledge publicly accessible, and facilitating participation of citizens and civil society organisations in its activities. The measures taken to improve the involvement of citizens and civil society should be monitored.

(26a) Horizon Europe should support new technologies which contribute to overcoming obstacles, that prevent the access and the full participation of persons with disabilities and which consequently restrain the development of a truly inclusive society.

(27) Pursuant to Article 349 of the TFEU, the Union's outermost regions are entitled to specific measures (taking into account their structural, social and economic situation) regarding access to horizontal Union programmes. The Programme should therefore take into account the specific characteristics of those regions in line with the Commission's Communication on ‘A stronger and renewed strategic partnership with the EU's outermost regions’ (COM(2017)0623) as endorsed by the Council on 12 April 2018 and where possible promote their participation in the Programme.

(28) The activities developed under the Programme should aim at eliminating gender inequalities , avoiding gender bias, adequately integrating the gender dimension in research and innovation content, aiming at enhancing work-life balance, promoting equality between women and men including equal pay principles as referred to in Article 141(3) of the TFEU and in Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, as well as ensuring accessibility of researchers with disabilities to research and innovation. ▌

(29) In light of the specificities of the defence industry sector, the detailed provisions for Union funding to defence research projects should be fixed in the Regulation … establishing the European Defence Fund (9) which defines the rules of participation for defence research. Although synergies between Horizon Europe and the European Defence Fund could be encouraged while avoiding duplication, actions under Horizon Europe should have an exclusive focus on civilian applications.

(30) This Regulation lays down a financial envelope for the Programme. The amount indicated for the specific programme referred to in Article 1(3)(a) is to constitute the prime reference amount, within the meaning of [reference to be updated as appropriate according to the new inter-institutional agreement: point 17 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (10)], for the European Parliament and the Council during the annual budgetary procedure.

(31) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (the ‘Financial Regulation’) (11) applies to this Programme, unless otherwise specified. It lays down rules on the implementation of the Union budget, including the rules on grants, prizes, procurement, indirect implementation, financial assistance, financial instruments and budgetary guarantees.

(31a) Administrative simplification, in particular the reduction of the administrative burden for beneficiaries should be continuously sought throughout the Programme. The Commission should further simplify its tools and guidance in such a way that they impose a minimal burden on beneficiaries. In particular, the Commission should consider issuing an abridged version of the guidance.

(31b) In order to ensure that Europe remains at the forefront of global research and innovation in the digital field and to take account of the necessity to step up investments to benefit from the growing opportunities of digital technologies, sufficient budget should be allocated to core digital priorities.

(32) In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (12), Council Regulation (Euratom, EC) No 2988/95 (13),Council Regulation (Euratom, EC) No 2185/96 (14) and Council Regulation (EU) 2017/1939 (15), the financial interests of the Union are to be protected through proportionate measures, including the prevention, detection, correction and investigation of irregularities, including fraud, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, the imposition of administrative sanctions. In particular, in accordance with Regulation (EU, Euratom) No 883/2013 and Regulation (Euratom, EC) No 2185/96 the European Anti-Fraud Office (OLAF) may carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor's Office (EPPO) may investigate and prosecute fraud and other criminal offences affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council (16). In accordance with the Financial Regulation, any person or entity receiving Union funds is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, the EPPO and the European Court of Auditors (ECA) and to ensure that any third parties involved in the implementation of Union funds grant equivalent rights.

(33) Pursuant to [reference to be updated as appropriate according to a new decision on OCTs: Article 94 of Council Decision 2013/755/EU (17)], persons and entities established in overseas countries and territories (OCTs) are eligible for funding subject to the rules and objectives of the Programme and possible arrangements applicable to the Member State to which the relevant overseas country or territory is linked. The Programme should take due account of the specific features of those territories in order to ensure their effective participation and to support cooperation and synergies, particularly in the outermost regions as well as with third countries in their neighbourhood.

(34) Pursuant to paragraph 22 and 23 of the Inter-institutional agreement for Better Law-Making of 13 April 2016, there is a need to evaluate this Programme on the basis of information collected through specific monitoring requirements, while avoiding overregulation and administrative burdens, in particular on Member States and beneficiaries under the Programme. These requirements, where appropriate, can include measurable indicators, as a basis for evaluating the effects of the Programme on the ground.

(35) In order to be able to supplement or amend the impact pathway indicators, where considered necessary, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(36) Coherence and synergies between Horizon Europe and the EU's Space Programme will foster a globally competitive and innovative European space sector; reinforce Europe’s autonomy in accessing and using space in a secure and safe environment; and strengthen Europe’s role as a global actor. Breakthrough solutions in Horizon Europe will be supported by data and services made available by the Space Programme.

(36a) The work programme should take into account the outcome of specific previous projects and the state of science, technology and innovation at national, Union and international level and of relevant policy, market and societal developments, for a particular action to be funded.

(37) The rules for participation and dissemination should adequately reflect the needs of the Programme taking into account the concerns raised and the recommendations made by various stakeholders.

(38) Common rules and requirement across the Programme should ensure simplified and common implementing tools including for monitoring and reporting an a coherent framework which facilitates participation in programmes financially supported by the budget of the Programme, including participation in programmes managed by funding bodies such as the EIT, joint undertakings or any other structures under Article 187 TFEU, and participation in programmes undertaken by Member States pursuant to Article 185 TFEU. Adopting specific rules should be possible but exceptions must be limited to when strictly necessary and duly justified.

(39) Actions which fall within the scope of the Programme should respect fundamental rights and observe the principles acknowledged in particular by the Charter of Fundamental Rights of the European Union. Such actions should be in conformity with any legal obligation including international law and with any relevant Commission decisions such as the Commission notice of 28 June 2013 (18), as well as with ethical principles, which include avoiding any breach of research integrity. The opinions of the European Group on Ethics in Science and New Technologies, the European Union Agency for Fundamental Rights and the European Data Protection Supervisor should be taken into account. Article 13 TFEU should also be taken into account in research activities, and the use of animals in research and testing should be reduced, with a view ultimately to replacing their use.

(40) In line with the objectives of international cooperation as set out in Articles 180 and 186 TFEU, the participation of legal entities established in third countries and of international organisations should be promoted in the Union’s scientific, societal, economic and technological interests . The implementation of the Programme should be in conformity with the measures adopted in accordance with Articles 75 and 215 TFEU and should be in compliance with international law. For actions related to Union strategic assets, interests, autonomy or security, the participation to specific actions of the Programme may be limited to entities established in Member States only, or to entities established in specified associated or other third countries in addition to Member States.

(41) Acknowledging climate change as one of the biggest global and societal challenges and reflecting the importance of tackling climate change in line with the Union's commitments to implement the Paris Agreement and the United Nations Sustainable Development Goals, this Programme will contribute to mainstream climate actions and to the achievement of an overall target of at least 25 % of the EU budget expenditures supporting climate objectives over the MFF 2021-2027 period, and an annual target of 30 % as soon as possible and at the latest by 2027 . Climate mainstreaming shall be adequately integrated in research and innovation content and applied at all stages of the research cycle.

(41a) In the context of the impact pathway related to climate, the Commission will report on outputs, innovations and aggregated estimated effects of projects that are climate-relevant, including by Programme part and by implementation mode. In its analysis the Commission should take account of the long-term economic, societal and environmental costs and benefits to European citizen resulting from Programme activities including the uptake of innovative climate mitigation and adaptation solutions, estimated impacts on jobs and company creation, economic growth in and competitiveness, clean energy, health to well-being (including air, soil and water quality). The results of this impact analysis should be made public, assessed in the context of Europe’s climate and energy goals and feedback into the subsequent strategic planning process and future work programmes.

(42) Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union apply to this Regulation. These rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes, indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also concern the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States, as the respect for the rule of law is an essential precondition for sound financial management and effective EU funding.

(43) Use of sensitive background information or access by unauthorized individuals to sensitive results and research data may have an adverse impact on the interests of the Union or of one or more of the Member States. Thus handling of confidential data and classified information should be governed by all relevant Union law, including the Institutions' internal rules, such as Commission Decision (EU, Euratom) 2015/444 (19), which lays down the provisions on security rules for protecting EU classified information.

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(45) It is necessary to establish the terms and conditions for providing Union funding to participants in actions under the Programme. Grants will be the main type of financing within the Programme. Other types of financing should be chosen on the basis of their ability to achieve the specific objectives of the actions and to deliver results, taking into account in particular the costs of controls, the administrative burden, and the expected risk of non-compliance. For grants, this should include a consideration of the use of lump sums, flat rates and scales of unit costs as set out in the Financial Regulation ▌, with a view to further simplification. Before any new costs reimbursement system could be deemed a real simplification for the beneficiaries, it should be preceded by an extensive and positive evaluation.

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(47) In accordance with Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ( the ‘Financial Regulation’) (20), the Programme should provide the basis for a wider acceptance of the usual cost accounting practices of the beneficiaries as regards personnel costs and unit costs for internally invoiced goods and services (including for large research infrastructures as understood under Horizon 2020) . The use of unit costs for internally invoiced goods and services calculated in accordance with the usual accounting practices of the beneficiaries combining actual direct costs and indirect costs should be an option which could be chosen by all beneficiaries. In this respect, beneficiaries should be able to include actual indirect costs calculated on the basis of allocation keys in such unit costs for internally invoiced goods and services.

(48) The current system of reimbursement of actual personnel costs should be further simplified building on the project-based remuneration approach developed under Horizon 2020 and further aligned to the Financial Regulation , aiming to reduce the remuneration gap between EU researchers involved in the Programme .

(49) The participant Guarantee Fund set up under Horizon 2020 and managed by the Commission has proved to be an important safeguard mechanism which mitigates the risks associated with the amounts due and not reimbursed by defaulting participants. Therefore, the Beneficiary Guarantee Fund, renamed Mutual Insurance Mechanism (‘the Mechanism’) should be continued and enlarged to other funding bodies in particular to initiatives pursuant to Article 185 of the TFEU. The Mechanism should be opened to beneficiaries of any other directly managed Union programme.

(50) Rules governing the exploitation and dissemination of results should be laid down to ensure that beneficiaries protect, exploit, disseminate and provide access to those results as appropriate. More emphasis should be given to exploiting results and the Commission should identify and help maximise opportunities for beneficiaries to exploit results, in particular in the Union. Exploitation should be in consideration of the principles of this programme, including promoting innovation in the Union and strengthening the European Research Area.

(51) The key elements of the proposal evaluation and selection system of the predecessor programme Horizon 2020 with its particular focus on excellence , ‘impact’ and ‘quality and efficiency of implementation’ criteria should be maintained. Proposals should continue to be selected based on the evaluation made by independent experts stemming from as many Member States as possible. The Commission should organise anonymous evaluation where appropriate and analyse its results in order to avoid selection bias . Where relevant, the necessity to ensure the overall coherence of the portfolio of projects should be taken into account by independent experts .

(52) Systematic cross-reliance on audits and assessments — ▌with other Union programmes — should be implemented in accordance with Article 127 of the Financial Regulation for all parts of the Programme, in order to reduce administrative burden for beneficiaries of Union funds. Cross reliance should be explicitly provided for by considering also other elements of assurance such as systems and processes audits.

(53) Specific challenges in the areas of research and innovation should be addressed by prizes, including through common or joint prizes where appropriate, organised by the Commission or funding body with other Union bodies, third countries, international organisations or non-profit legal entities. In particular, prizes should be awarded to projects attracting scientists to widening countries as well as to successful projects to increase their visibility and allow to increase the promotion of Union funded actions.

(54) ▌ Financing types and the methods of implementation under this Regulation shall be chosen on the basis of their ability to achieve the specific objectives of the actions and to deliver results, taking into account, in particular, the costs of controls, the administrative burden, and the expected risk of non-compliance. This should include consideration of the use of lump sums, flat rates and scales of unit costs,

HAVE ADOPTED THIS REGULATION:

TITLE I

GENERAL PROVISIONS

Article 1 Subject matter 1. This Regulation establishes Horizon Europe — the Framework Programme for Research and Innovation (‘the Programme’) and the rules for participation and dissemination in indirect actions under the Programme and determines the framework governing Union support to research and innovation activities . 2. It lays down the objectives of the Programme, the budget for the period 2021 — 2027, the forms of Union funding and the rules for providing such funding. 3. The Programme shall be implemented through: (a) the specific programme established by Decision …/…/EU (21) ▌; (aa) a financial contribution to the EIT established by Regulation (EC) No 294/2008; (b) the specific programme on defence research established by Regulation …/…/EU Regulation of the Euopean Parliament and of the Council establishing the European Defence Fund. 4. The terms ‘Horizon Europe’, ‘the Programme’ and ‘specific programme’ used in this Regulation address matters relevant only to the specific programme described in paragraph 3(a), unless otherwise explicitly stated. The EIT shall implement the Programme in line with its strategic objectives for the period 2021-2027, as laid down in the Strategic Innovation Agenda of the EIT, taking into account the strategic planning.

Article 2 Definitions For the purposes of this Regulation, the following definitions apply: (1) ‘research infrastructures’ mean facilities that provide resources and services for the research communities to conduct research and foster innovation in their fields. This definition includes the associated human resources, and it covers major equipment or sets of instruments; knowledge-related facilities such as collections, archives or scientific data infrastructures; computing systems, communication networks, and any other infrastructure, of a unique nature and open to external users, essential to achieve excellence in research and innovation. Where relevant, they may be used beyond research, for example for education or public services and they may be ‘single sited’, ‘virtual’ or ‘distributed’; (2) ‘smart specialisation strategy’ has the same meaning as smart specialisation strategy as defined in Regulation (EU) No 1303/2013 of the European Parliament and of the Council (22) and fulfilling the enabling conditions set out in Regulation (EU) XX [Common Provisions Regulation]; (3) ‘European Partnership’ means an initiative where the Union, prepared with early involvement of Member States and/or Associated Countries , together with private and/or public partners (such as industry , universities , research organisations, bodies with a public service mission at local, regional, national or international level or civil society organisations including foundations and NGOs ), commit to jointly support the development and implementation of a programme of research and innovation activities, including those related to market, regulatory or policy uptake; (4) ‘open access’ means the practice of providing online access to research outputs resulting from actions funded under the Programme, ▌free of charge to the end-user, in accordance with Article 10 and 35(3) of this Regulation ; (4a) ‘open science’ means an approach to the scientific process based on open cooperative work, tools and diffusing knowledge, including the elements of article 10. (5) ‘mission’ means a portfolio of excellence-based and impact-driven R&I actions across disciplines and sectors, intended to: — achieve ▌, within a set timeframe, a measurable goal that could not be achieved through individual actions, — have impact on society and policy-making through science and technology, and — be relevant for a significant part of the European population and a wide range of European citizens; (6) ‘pre-commercial procurement’ means the procurement of research and development services involving risk-benefit sharing under market conditions, and competitive development in phases, where there is a clear separation of the research and development services procured from the deployment of commercial volumes of end-products; (7) ‘public procurement of innovative solutions’ means procurement where contracting authorities act as a launch customer for innovative goods or services which are not yet available on a large-scale commercial basis, and may include conformity testing. (8) ‘access rights’ means rights to use results or background under terms and conditions laid down in accordance with this Regulation; (9) ‘background’ means any data, know-how or information whatever its form or nature, tangible or intangible, including any rights such as intellectual property rights, that is: (i) held by beneficiaries prior to their accession to the action; and (ii) identified by the beneficiaries in a written agreement as needed for implementing the action or for exploiting its results; (10) ‘dissemination’ means the public disclosure of the results by appropriate means (other than resulting from protecting or exploiting the results), including by scientific publications in any medium; (11) ‘exploitation’ means the use of results in further research and innovation activities other than those covered by the action concerned, including inter alia, commercial exploitation such as developing, creating, manufacturing and marketing a product or process, ▌creating and providing a service, or in standardisation activities; (12) ‘fair and reasonable conditions’ means appropriate conditions, including possible financial terms or royalty-free conditions, taking into account the specific circumstances of the request for access, for example the actual or potential value of the results or background to which access is requested and/or the scope, duration or other characteristics of the exploitation envisaged; (13) ‘funding body’ means a body or organisation, other than the Commission, as referred to in point (c) of Article 62(1) of the Financial Regulation, to which the Commission has entrusted budget implementation tasks under the Programme; (14) ‘international European research organisation’ means an international organisation, the majority of whose members are Member States or associated countries, and whose principal objective is to promote scientific and technological cooperation in Europe; (15) ‘legal entity’ means any natural or legal person created and recognised as such under national law, Union law or international law, which has legal personality and which may, acting in its own name, exercise rights and be subject to obligations, or an entity without a legal personality in accordance with Article 197(2)(c) of the Financial Regulation; (15a) ‘widening countries’/‘low R&I performing countries’ means those countries where legal entities need to be established in order to be eligible as coordinators under ‘widening participation and spreading excellence’ strand of the Widening Participation and Strengthening ERA’ part of Horizon Europe. From the EU Member States, these countries are Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia, for the whole duration of the Programme. For associated countries, the list of eligible countries will be defined based on an indicator and published in the Work Programme. On the basis of Article 349 TFEU, legal entities from Outermost Regions will be also fully eligible as coordinators under this strand. (16) ‘non-profit legal entity’ means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members; (16a) ‘SME’ means micro-, small- and medium-sized enterprise as defined in Commission Recommendation 2003/361/EC; (17) ‘small mid-cap’ means an entity that is not a micro-, small- and medium-sized enterprise (‘SME’) as defined in Commission Recommendation 2003/361/EC employing up to 499 employees ▌where the staff headcount is calculated in accordance with Articles 3, 4, 5 and 6 of Title I of the Annex of that Recommendation; (18) ‘results’ means any tangible or intangible effect of the action, such as data, know-how or information, whatever its form or nature, whether or not it can be protected, as well as any rights attached to it, including intellectual property rights; (18a) ‘research outputs’ mean results generated by the action to which access can be given in the form of scientific publications, data or other engineered outcomes and processes such as software, algorithms, protocols and electronic notebooks; (19) ‘seal of excellence’ means a certified label which shows that a proposal submitted to a call for proposals exceeded all of the evaluation thresholds set out in the work programme, but could not be funded due to lack of budget available to that call in the work programme , but which might receive support from other Union or national sources of funding; (19a) ‘strategic R&I Plan’ means an implementing act laying out a strategy for realising content in the work programme covering a maximum period of four years, following a broad mandatory multi-stakeholder consultation process. It defines the priorities, suitable types of action and forms of implementation to use. (20) ‘work programme’ means the document adopted by the Commission for the implementation of the specific programme (23) in accordance with its Article 12 or the equivalent document in content and structure adopted by a funding body. (21) ‘reimbursable advance’ means the part of a Horizon Europe or EIC blended finance corresponding to a loan under Title X of the Financial Regulation, but that is directly awarded by the Union on a non-profit basis to cover the costs of activities corresponding to an innovation action, and to be reimbursed by the beneficiary to the Union under the conditions provided for in the contract; (22) ‘contract’ means the agreement concluded between the Commission or a funding body with a legal entity implementing an innovation and market deployment action and supported by a Horizon Europe or EIC blended finance. (23) ‘classified information’ means EU classified information a s defined in Article 3 of Commission Decision (EU, Euratom) 2015/444 as well as classified information of Member States, classified information of third countries with which the Union has a security agreement and classified information of international organisation with which the Union has a security agreement; (24) ‘Blending operation’ means actions supported by the EU budget, including within blending facilities pursuant to Article 2(6) of the Financial Regulation, combining non-repayable forms of support and/or financial instruments from the EU budget with repayable forms of support from development or other public finance institutions, as well as from commercial finance institutions and investors. (25) ‘Horizon Europe ▌blended finance’ means financial support to a programme to provide support to innovation and market deployment activities, consisting in a specific combination of a grant or a reimbursable advance with an investment in equity or any other repayable form of support ; (25-a) ‘EIC blended finance’ means direct financial support delivered under the EIC to an innovation and market deployment action, consisting in a specific combination of a grant or a reimbursable advance with an investment in equity or any other repayable form of support”; ( 25a) ‘research and innovation action’ means an action primarily consisting of activities aiming to establish new knowledge and/or to explore the feasibility of a new or improved technology, product, process, service or solution. This may include basic and applied research, technology development and integration, testing, demonstration and validation on a small-scale prototype in a laboratory or simulated environment; (25b) ‘innovation action’ means an action primarily consisting of activities directly aimed at producing plans and arrangements or designs for new, altered or improved products, processes or services, possibly including prototyping, testing, demonstrating, piloting, large-scale product validation and market replication; (25c) ‘ERC frontier research (including ERC Proof of Concept)’ means principal investigator-led research actions, hosted by ERC only single or multiple beneficiaries; (25d) ‘training and mobility action’ means an action geared towards the improvement of skills, knowledge and career prospects of researchers based on mobility between countries, and, if relevant, between sectors or disciplines; (25e) ‘programme co-funding action’ means an action to provide multi-annual co-funding to a programme of activities established and/or implemented by entities managing and/or funding research and innovation programmes, other than Union funding bodies. Such a programme of activities may support networking and coordination, research, innovation, pilot actions, and innovation and market deployment actions, training and mobility actions, awareness raising and communication, dissemination and exploitation, any relevant financial support, such as grants, prizes, procurement, as well as Horizon Europe blended finance or a combination thereof. The programme co-fund action may be implemented by those entities directly or by third parties on their behalf; (25f) ‘pre-commercial procurement action’ means an action with the primary aim of realising pre-commercial procurement implemented by beneficiaries that are contracting authorities or contracting entities; (25 g) ‘public procurement of innovative solutions action’ means an action with the primary aim of realising joint or coordinated public procurement of innovative solutions implemented by beneficiaries that are contracting authorities or contracting entities; (25h) ‘coordination and support action’ means an action contributing to the objectives of the Programme, excluding research and innovation activities, except when undertaken under the component ‘widening participation and spreading excellence’ of the part ‘Widening Participation and strengthening the European Research Area’; and bottom-up coordination without co-funding of research activities from the EU that allows for cooperation between legal entities from Member States and Associated Countries in order to strengthen the European Research Area; (25i) ‘Inducement prize’ means a prize to spur investment in a given direction, by specifying a target prior to the performance of the work ( 25j) ‘Recognition prize’ in prize to reward past achievements and outstanding work after it has been performed (25k) ‘Innovation and market deployment action’ means and action embedding an innovation action and other activities necessary to deploy an innovation in the market, including the scaling-up of companies, providing Horizon Europe blended finance (a mix of grant-type funding and private finance); ( 25l) ‘Indirect actions’ means research and innovation activities to which the Union provides financial support and which are undertaken by participants; ( 25m) ‘Direct actions’ means research and innovation activities undertaken by the Commission through its Joint Research Centre (JRC). (27) ‘procurement’ means procurement as defined in Article 2(49) of the Financial Regulation; (28) ‘affiliated entity’ means any legal entity as defined in Article 187(1) of the Financial Regulation; (30) ‘innovation ecosystem’ means an ecosystem that brings together at EU level actors or entities whose functional goal is to enable technology development and innovation. They encompass relations between material resources (such as funds, equipment, and facilities), institutional entities (such as higher education institutions and support services, RTOs, companies, venture capitalists and financial intermediaries) and national, regional and local policy-making and funding entities. ▌

Article 3 Programme objectives 1. The Programme’s general objective is to deliver scientific, technological , economic and societal impact from the Union’s investments in research and innovation so as to strengthen the scientific and technological bases of the Union and foster its competitiveness in all Member States including in its industry, deliver on the Union strategic priorities and contribute to the realisation of EU objectives and policies, contribute to tackling global challenges, including the Sustainable Development Goals by following the principles of the Agenda 2030 and the Paris Agreement, and to strengthen the European Research Area. The Programme shall thus maximise Union added value by focusing on objectives and activities that cannot be effectively realised by Member States acting alone, but in cooperation. 2. The Programme has the following specific objectives: (a) to develop, promote and advance scientific excellence, support the creation and diffusion of high-quality new fundamental and applied knowledge, skills, technologies and solutions , training and mobility of researchers, attract talent at all levels and contribute to full engagement of Union's talent pool in actions supported under this Programme ; (b) to generate knowledge, strengthen the impact of research and innovation in developing, supporting and implementing Union policies and support the access to and uptake of innovative solutions in European industry , notably in SMEs, and society to address global challenges , including climate change and the Sustainable Development Goals ; (c) to foster all forms of innovation, facilitate technological development, demonstration and knowledge and technology transfer, strengthen ▌deployment and exploitation of innovative solutions; (d) to optimise the Programme's delivery for strengthening and increasing the impact and attractiveness of the European Research Area , to foster the excellence-based participations from all Member States, including low R&I performing Member States, in Horizon Europe and to facilitate collaborative links in European research and innovation.

Article 4 Programme structure 1. The Programme is structured in the following parts contributing to the general and specific objectives set out in Article 3: (1) Pillar I ‘ Excellent Science’ ▌with the following components: (a) the European Research Council (ERC); (b) Marie Skłodowska-Curie Actions (MSCA); (c) research infrastructures. (2) Pillar II ‘Global Challenges and European Industrial Competitiveness’ with the following components, taking into account that social sciences and humanities (SSH) shall play an important role across all clusters : (a) cluster ‘Health’; (b) cluster ‘Culture, creativity and inclusive society’; (ba) cluster ‘Civil Security for Society’; (c) cluster ‘Digital, ▌Industry and Space ’; (d) cluster ‘Climate, Energy and Mobility’; (f) cluster ‘Food, Bioeconomy, Natural Resources, Agriculture and Environment’ ; (g) non-nuclear direct actions of the Joint Research Centre (JRC). (3) Pillar III ‘ Innovative Europe’ with the following components: (a) the European Innovation Council (EIC); (b) European innovation ecosystems; (c) the European Institute of Innovation and Technology (EIT) established by Regulation (EC) No 294/2008 . (4) Part ‘Widening participation and strengthening the European Research Area’, ▌with the following components: (a) widening participation and spreading excellence; (b) reforming and enhancing the European R&I System. 2. The broad lines of activities are set out in Annex I.

Article 5 (24) Defense research and development 1. Activities to be carried out under the specific programme referred to in Article 1(3)(b) and which are laid down in Regulation establishing the European Defence Fund, shall have an exclusive focus on defence research and development , with the following objectives and broad lines of activities: — activities aiming to foster the competitiveness, efficiency and innovation capacity of the European defence, technological and industrial base. 2. ▌This Regulation does not apply to the specific programme referred to in Article 1(3)(b), with the exception of this Article, Article 1 ▌and Article 9(1).

Article 6 (25) Strategic planning and implementation and forms of EU funding 1. The Programme shall be implemented in direct management in accordance with the Financial Regulation or in indirect management with funding bodies referred to in Article 62(1)(c) of the Financial Regulation. 2. The Programme may provide funding to indirect actions in any of the forms laid down in the Financial Regulation, in particular grants which shall be the main form of support in the programme . It may also provide financing through prizes, procurements and financial instruments within blending operations and equity support under the EIC Accelerator . 3. The rules for participation and dissemination laid down in this Regulation shall apply to indirect actions. 4. The main types of action to be used under the Programme are set out and defined in Article 2 . The forms of funding , referred to in paragraph 2, shall be used in a flexible manner across all objectives of the Programme with their use being determined on the basis of the needs and the characteristics of the particular objectives. 5. The Programme shall also support direct actions undertaken by the JRC. Where these actions contribute to initiatives established under Article 185 or Article 187 TFEU, this contribution shall not be considered as part of the financial contribution allocated to those initiatives. 6. The implementation of the specific programme and the EIT's KICs shall be supported by a transparent and strategic ▌ planning of research and innovation activities as laid down in the specific programme, in particular for the pillar ‘Global Challenges and European Industrial Competitiveness’ ▌and cover also relevant activities in other pillars and the Widening Participation and Strengthening the European Research Area part. The Commission shall ensure early involvement of the Member States and extensive exchanges with the European Parliament, complemented by consultation with stakeholders and the public at large. The Strategic Planning shall ensure alignment with other relevant Union programmes and consistency with EU priorities and commitments and increase complementarity and synergies with national and regional funding programmes and priorities, thereby strengthening the ERA. Areas for possible missions and areas for possible institutionalised European Partnerships shall be established in Annex Va. 6a. Where appropriate, in order to allow a faster access to funds for small collaborative consortia, a Fast Track to Research and Innovation Procedure (FTRI) may be proposed under some of the calls for proposals dedicated to select research and / or innovation actions Under the Global Challenges and European Industrial Competitiveness and the European Innovation Council Pathfinder parts of the Framework Programme. A call under the FTRI Procedure shall have the following cumulative characteristics: — bottom-up calls for proposals — a shorter time-to-grant, not exceeding 6 months; — a support provided only to small collaborative consortia composed of maximum 6 different and independent eligible legal entities; — a maximum financial support per consortium not exceeding EUR 2,5 million. The work programme shall identify the calls using the FTRI Procedure. 7. Horizon Europe activities shall be ▌delivered through open, competitive calls for proposals, including within missions and European Partnerships , except for the activities referred to in Article 39 on Prizes . ▌

Article 6a Principles of the Programme 1. Research and innovation activities carried out under the specific Programme referred to in Article 1(3)(a) and under the EIT shall have an exclusive focus on civil applications. Budgetary transfers between the amount allocated to the specific programme referred to in Article 1(3)(a) and the EIT and the amount allocated to the specific programme referred to in Article 1(3)(b) shall not be allowed and unnecessary duplication between the two programmes shall be avoided. 2. Horizon Europe shall ensure a multidisciplinary approach and shall foresee, where appropriate, the integration of social sciences and humanities across all clusters and activities developed under the Programme, including specific calls on SSH related topics. 3. The collaborative parts of the Programme shall ensure a balance between lower and higher TRLs thereby covering the whole value chain. 3a. The Programme shall ensure the effective promotion and integration of cooperation with third countries and international organisations and initiatives based on mutual benefits, EU interests, international commitments and, where appropriate, reciprocity. 4. The Programme shall assist widening countries to increase participation in Horizon Europe and to promote broad geographical coverage in collaborative projects, including through spreading scientific excellence, boosting new collaborative links, stimulating brain-circulation as well as through the implementation of Articles 20(3) and 45(4). Those efforts shall be mirrored by proportional measures by Member States, including on setting attractive salaries for researchers, with the support of Union, national and regional funds. Particular attention shall be paid to geographical balance, subject to the situation in the field of research and innovation concerned, evaluation panels and in bodies such as boards and expert groups, without undermining the excellence criteria. 5. The Programme shall ensure the effective promotion of equal opportunities for all, and the implementation of gender mainstreaming, and of the gender dimension in the research and innovation content and shall aim to address the causes of gender imbalance. Particular attention shall be paid to ensuring to the extent possible gender balance, in evaluation panels and in other relevant advisory bodies such as boards and expert groups. 5a. Horizon Europe shall be implemented in synergy with other Union funding programmes while seeking maximal administrative simplification. A non-exhaustive list of synergies with other Union funding programmes is included in Annex IV. 5b. The Programme contributes to increasing public and private investment in R&I in Member States thereby helping to reach an overall investment of at least 3 % of Union gross domestic product (GDP) in research and development. 6. The Commission when implementing the programme shall aim at continuous administrative simplification and reduction of the burden for the applicants and beneficiaries. 7. As part of the general Union objective of mainstreaming climate actions into EU sectoral policies and EU funds, actions under this Programme shall contribute at least 35 % of the expenditure to climate objectives where appropriate. Climate mainstreaming shall be adequately integrated in research and innovation content. 8. The programme shall promote co-creation and co-design through engagement of citizens and civil society. 9. The programme shall ensure transparency and accountability of public funding in research and innovation projects, thereby preserving the public interest. 10. The Commission or the relevant funding body shall ensure that sufficient guidance and information is made available to all potential participants at the time of publication of the call for proposals, in particular the applicable model grant agreement.

Article 7 Missions 1. Missions shall be programmed within the pillar ‘Global Challenges and European Industrial Competitiveness’, but may also benefit from actions carried out within other parts of the Programme as well as complementary actions carried out under other Union funding programmes. Missions shall allow for competing solutions, resulting in pan-European added value and impact. 2. The missions shall be defined and implemented in accordance with the Regulation and the Specific Programme , ensuring the active and early involvement of the Member States and extensive exchanges with the European Parliament . The missions, their objectives, budget, targets, scope, indicators and milestones shall be identified in the Strategic R&I Plans or the Work Programmes as appropriate . Evaluation of proposals under the missions shall be carried out in accordance with Article 26. 2a. During the first three years of the programme, a maximum of 10 % of the annual budget of Pillar II shall be programmed through specific calls for implementing the missions. For the remaining part of the programme, and only after a positive assessment of the mission selection and management process, this percentage may be increased. The Commission shall communicate the total budgetary share of each work programme dedicated to missions. 3. Missions shall: (a) using SDGs as sources for their design and implementation, have a clear research and innovation content, EU-added value, and contribute to reaching Union priorities and commitments and Horizon Europe programme objectives laid down in Article 3 ; (aa) cover areas of common European relevance, be inclusive, encourage broad engagement and active participation of various types of stakeholders from public and private sectors, including citizens and end-users, and deliver R&I results that could benefit all Member States; (b) be bold and inspirational, hence have wide , scientific, technological, societal, economic , environmental or policy relevance and impact ; (c) indicate a clear direction and objectives and be targeted, measurable, time-bound and have a clear budget frame ; (d) be selected in a transparent manner and be centered on ambitious , excellence-based and impact-driven but realistic goals and research, development and innovation activities; (da) have the necessary scope, scale and mobilization of the resources and leverage of additional public and private funds required to deliver the mission outcome; (e) stimulate activity across disciplines (including Social Sciences and Humanities) and encompassing activities from a broad range of TRLs, including lower TRLs ; (f) be open to multiple, bottom-up approaches and solutions taking into account human and societal needs and benefits and recognizing the importance of diverse contributions to achieve these missions . (fa) benefit from synergies in a transparent manner with other Union programmes as well as with national and, where relevant, regional innovation ecosystems. 4. The Commission shall monitor and evaluate each mission in accordance with Articles 45 and 47 and Annex V to this Regulation, including progress towards short, medium and long-term targets, covering implementation, monitoring and phasing-out of the missions. An assessment of the first missions established under Horizon Europe shall take place no later than 2023 and before any decision is taken on creating new missions, continuing, terminating or redirecting ongoing missions. The results of this assessment shall be made public and shall include, but not limited to, the analysis of their selection process and of their governance, budget, focus and progress to date.

Article 7a The European Innovation Council 1. The Commission shall establish a European Innovation Council (EIC) as a centrally-managed ‘one stop shop’ for implementing actions under Pillar III ‘Innovative Europe’ which relate to the EIC. The EIC shall mainly focus on breakthrough and disruptive innovation, targeting especially market-creating innovation, while also supporting all types of innovation, including incremental. The EIC shall operate according to the following principles: clear EU added value, autonomy, ability to take risk, efficiency, effectiveness, transparency and accountability. 2. The EIC shall be open to all types of innovators including from individuals to universities, research organisations and companies (SMEs including start-ups and, in exceptional cases, small mid-caps) and from single beneficiaries to multi-disciplinary consortia. At least 70 % of EIC budget shall be dedicated to SMEs, including start-ups. 3. The EIC Board and management features of the EIC are defined in Decision (EU)… [Specific Programme] and its annexes.

Article 8 European Partnerships 1. Parts of Horizon Europe may be implemented through European Partnerships. The involvement of the Union in European Partnerships may take any of the following forms: (a) participation in partnerships set up on the basis of memoranda of understanding and/or contractual arrangements between the Commission and the partners referred to in Article 2(3), specifying the objectives of the partnership, related commitments from all involved sides for financial and/or in-kind contributions of the partners, key performance and impact indicators, outputs to be delivered and reporting modalities .They include the identification of complementary research and innovation activities that are implemented by the partners and by the Programme (Co-programmed European Partnerships); (b) participation in and financial contribution to a programme of research and innovation activities , specifying the objectives, key performance and impact indicators, and outputs to be delivered, based on the commitment of the partners for financial and/or in-kind contributions and integration of their relevant activities using a Programme co-fund action (Co-funded European Partnerships); (c) participation in and financial contribution to research and innovation programmes undertaken by several Member States in accordance with Article 185 TFEU, or by bodies established pursuant to Article 187 TFEU, such as Joint Undertakings, or by the EIT Knowledge and Innovation Communities in compliance with the EIT Regulation (Institutionalised European Partnerships) . Such partnerships shall be implemented only where other parts of the Horizon Europe programme, including other forms of European Partnerships would not achieve the objectives or would not generate the necessary expected impacts, and if justified by a long-term perspective and high degree of integration. Partnerships in accordance with Article 185 TFEU or pursuant to Article 187 TEFU shall implement a central management of all financial contributions, except in duly justified cases. In case of central financial management, project level contributions from one participating state will be made on the basis of the funding requested in proposals from entities established in that participating state, unless otherwise agreed among all participating states concerned. The rules for such partnerships shall specify inter alia the objectives, key performance and impact indicators, and outputs to be delivered, as well as the related commitments for financial and/or in-kind contributions of the partners. 2. European Partnerships shall: (a) Be established for addressing European or global challenges only in cases where they will more effectively achieve objectives of Horizon Europe than the Union alone and when compared to other forms of support of the Framework programme. Those parts shall have an appropriate share of the budget of Horizon Europe. The majority of the budget in pillar II shall be allocated to actions outside of European partnerships ; (b) Adhere to the principles of Union added value, transparency, openness, impact within and for Europe, strong leverage effect on sufficient scale , long-term commitments of all the involved parties, flexibility in implementation , coherence, coordination and complementarity with Union, local, regional, national and , where relevant, international initiatives or other partnerships and missions ; (c) Have a clear life-cycle approach, be time limited and include conditions for phasing-out the Programme funding. 2.a. European Partnerships according to Article 8(1)(a and b) of this Regulation shall be identified in Strategic R&I Plans before being implemented in work programmes. Provisions and criteria for their selection, implementation, monitoring, evaluation and phasing-out are set out in Annex III.

Article 8a Review of missions and partnership areas No later than 2023, the Commission shall carry out a review of Annex Va as part of the overall monitoring of the programme, including missions and institutionalised European partnerships on the basis of article 185 TFEU or article 187 TFEU, and present a report on the main findings to the Council and the European Parliament.

Article 9 Budget 1. The financial envelope for the implementation of the Framework Programme for the period 2021 — 2027 shall be EUR 120 000 000 000 in 2018 prices for the specific programme referred to in Article 1(3)(a) and, in addition, the amount for the specific programme referred to in Article 1(3)(b), as laid down in Regulation establishing the European Defence Fund. 2. The indicative distribution of the amount referred to in paragraph 1, first half sentence, shall be: (a) 27,42 % for Pillar I ‘ Excellent and Open Science’ for the period 2021-2027, of which (1) 17,64 % for the European Research Council; (2) 7,23 % for Marie Skłodowska-Curie Actions; (3) 2,55 % for research infrastructures; (b) 55,48 % for Pillar II ‘Global Challenges and European Industrial Competitiveness’ for the period 2021-2027, of which (1) 8,16 % for cluster ‘Health’; (2) 2,50 % for cluster ‘Inclusive and Secure Creative Society’; (2a) 2,00 % for cluster ‘Secure Societies’; (3) 15,94 % for cluster ‘Digital and , Industry and Space ’; (4) 15,84 % for cluster ‘Climate, Energy and Mobility’; (5) 9,00 % for cluster ‘Food and , Natural Resources and Agriculture ’; (6) 2,04 % for for the non-nuclear direct actions of the Joint Research Centre (JRC); (c) 12,71 % for Pillar III ‘' Innovative Europe ’ for the period 2021-2027, of which: (1) 8,71 % for the European Innovation Council, (EIC) including up to 0.53 % for European Innovation Ecosystems; (2) 4 % for the European Institute of Innovation and Technology (EIT); (d) 4,39 % for the Part ‘Strengthening the European Research Area’ with the following components: (1) 4,00 % for Spreading excellence' and widening participation across the Union ; (2) ‘ 0.39 % for reforming and enhancing the European R&I System’. 3. In order to respond to unforeseen situations or to new developments and needs, the Commission may, within the annual budgetary procedure, deviate from the amounts referred to in paragraph 2 up to a maximum of 10 %, including the allocation of the contributions from associated countries . 3c. 45 % of the budget of cluster ‘Inclusive and Creative Society’ shall support research on cultural and creative sectors, including the Union’s cultural heritage, that shall include EUR 300 million to be earmarked for the creation of a European Cultural Heritage Cloud, as set out in Annex I to the Specific Programme following an impact assessment to be presented to the European Parliament. 3d. At least EUR 1 billion shall aim to be dedicated to Quantum Research under the ‘Digital, Industry and Space’ cluster under Pillar II. 4. The amount referred to in paragraph 1 for the specific programme referred to in Article 1(3)(a) and for the EIT , may also cover expenses for preparation, monitoring, control, audit, evaluation and other activities and expenditures necessary for managing and implementing the Programme, including all administrative expenditure, as well as evaluating the achievement of its objectives. The administrative expenses related to indirect actions shall not exceed 5 % of the total amount under the Programme . It may moreover cover expenses relating to the studies, meetings of experts, information and communication actions, in so far as they are related to the objectives of the Programme, as well as expenses linked to information technology networks focusing on information processing and exchange, including corporate information technology tools and other technical and administrative assistance needed in connection with the management of the Programme. 5. If necessary, appropriations may be entered in the budget beyond 2027 to cover the expenses provided for in paragraph 4, to enable the management of actions not completed by 31 December 2027. 6. Budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments. 7. Without prejudice to the Financial Regulation, expenditure for actions resulting from projects included in the first work programme may be eligible as from 1 January 2021. ▌ ▌

Article 10 Open science 1. The programme shall encourage open science as an approach to the scientific process based on cooperative work and diffusing knowledge, in particular in line with the following elements: — open access to scientific publications resulting from research funded under the Programme; — open access to research data, including those underlying scientific publications. These elements shall be ensured in accordance with Article 35(3) of this regulation. The latter shall also be in line with the principle ‘as open as possible, as closed as necessary’; 1a. The principle of reciprocity in open science shall be promoted and encouraged in all association and cooperation agreements with third countries, including agreements signed by funding bodies entrusted for indirect management of the Programme. 2. Responsible management of research data shall be ensured in line with the principles ‘Findability’, ‘Accessibility’, ‘Interoperability’ and ‘Reusability’ (FAIR). Attention shall also be paid to the long-term preservation of data. 3. Other open science practices ▌shall be promoted and encouraged, including for the benefit of SMEs.

Article 11 Complementary ▌ , combined and cumulative funding 1. Horizon Europe shall be implemented in synergy with other Union funding programmes while seeking maximal administrative simplification. A non-exhaustive list of synergies with other funding programmes is included in Annex IV. A The Horizon Europe single set of rules shall apply for an RDI co-funded action. 2. The Seal of Excellence shall be awarded for all parts of the Programme. Actions awarded a Seal of Excellence certification, or which comply with the following cumulative, comparative, conditions: (a) they have been assessed in a call for proposals under the Programme; (b) they comply with the minimum quality requirements of that call for proposals; (c) they may not be financed under that call for proposals due to budgetary constraints, may receive support from national or regional funds, including from the European Regional Development Fund, the Cohesion Fund, the European Social Fund+ or the European Agricultural Fund for Rural Development, in accordance with paragraph 5 of Article [67] of Regulation (EU) XX [Common Provisions Regulation] and Article [8] or Regulation (EU) XX [Financing, management and monitoring of the Common Agricultural Policy], without requiring any further application and evaluation and provided that such actions are consistent with the objectives of the programme concerned. With the exception of state aid rules, the rules of the Fund providing support shall apply. 2a. In accordance with Article 21 of Regulation (EU) XX [… Common Provisions Regulation], the managing authority, on a voluntary basis, may request the transfer of parts of its financial allocations to Horizon Europe. Transferred resources shall be implemented in accordance with the rules of Horizon Europe. In addition, the Commission shall ensure that such transferred funds are earmarked entirely for programmes and/or projects which will be implemented in the Member State or region, as applicable, they originated from. 2b. With prior authorisation from the applicants, the Commission shall include the allocations referred to in this Article in the information system on selected projects in order to allow for a fast exchange of information and enable financing authorities to provide funding to the selected actions. An action that has received a contribution from another Union programme may also receive a contribution under the Programme, provided that the contributions do not cover the same costs.

Article 12 Third countries associated to the Programme 1. The Programme shall be open to association of the following third countries: (a) European Free Trade Association (EFTA) members which are members of the European Economic Area (EEA), in accordance with the conditions laid down in the EEA agreement; (b) acceding countries, candidate countries and potential candidates, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions, or similar agreements, and in accordance with the specific conditions laid down in agreements between the Union and those countries; (c) countries covered by the European Neighbourhood Policy, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions, or similar agreements, and in accordance with the specific conditions laid down in agreements between the Union and those countries; (d) third countries and territories that fulfil all of the following criteria: i. a good capacity in science, technology and innovation; ii. commitment to a rules-based open market economy, including fair and equitable dealing with intellectual property rights, respect of human rights, backed by democratic institutions; iii. active promotion of policies to improve the economic and social well-being of citizens. Full or partial association to the Programme of each of the third countries under point(d) shall be based on an assessment of the benefits for the Union. It shall in particular be in accordance with the conditions laid down in a specific agreement covering the participation of the third country to any Union programme, provided that the agreement: — ensures a fair balance as regards the contributions and benefits of the third country participating in the Union programmes; — confers the right to coordinate an action under the Programme provided that it benefits the Union and that the protection of Union’s financial interest is ensured; — lays down the conditions of participation in the programmes, Programme including the calculation of financial contributions to individual (sub-) programmes and their administrative costs. These contributions shall constitute assigned revenues in accordance with Article 21(5) of the Financial Regulation; — does not confer to the third country a decisional power on the programme; — guarantees the rights of the Union to ensure sound financial management and to protect the Union’s financial interests. 2. The scope of association of each third country to the Programme shall take into account the objective of driving economic growth in the Union through innovation and shall avoid the brain drain from the Union . Accordingly, with the exception of EEA members, acceding countries, candidate countries and potential candidates, mono-beneficiary parts of the Programme may be excluded from an association agreement for a specific country , in particular those dedicated to private entities . 3. The association agreement shall, where appropriate, provide for and pursue reciprocal participation of legal entities established in the Union in equivalent programmes of associated countries in accordance with the conditions laid down therein. 4. The association agreement conditions determining the level of financial contribution shall ensure an automatic correction , every two years of any significant imbalance compared to the amount that entities established in the associated country receive through participation in the Programme, taking into account the costs in the management, execution and operation of the Programme. 4a. The contributions of all associated countries shall be included in the relevant parts of the Programme provided that the budget breakdown as specified in Article 9, paragraph 2 is respected. The Commission shall report to the Council and the Parliament during the annual budgetary procedure the total budget of each part of the Programme, identifying each of the associated countries, individual contributions and their financial balance.

TITLE II

RULES FOR PARTICIPATION AND DISSEMINATION

CHAPTER I

General provisions

Article 13 Funding bodies and direct actions of JRC 1. Funding bodies may depart from the rules set out in this Title , except from Articles 14, 15 and 16, in duly justified cases and only if this is provided for in the basic act setting up the funding body or entrusting budget implementation tasks to it or, for funding bodies under Article 62(1)(c)(ii), (iii) or (v) of the Financial Regulation, if it is provided for in the contribution agreement and their specific operating needs or the nature of the action so require. 2. The rules set out in this Title shall not apply to direct actions undertaken by the JRC.

Article 14 Eligible actions and ethical principles 1. Without prejudice to paragraphs 2 ▌of this Article, only actions implementing the objectives referred to in Article 3 shall be eligible for funding. The following fields of research shall not be financed: (a) activities aiming at human cloning for reproductive purposes; (b) activities intended to modify the genetic heritage of human beings which could make such changes heritable (26); (c) activities intended to create human embryos solely for the purpose of research or for the purpose of stem cell procurement, including by means of somatic cell nuclear transfer. 2. Research on human stem cells, both adult and embryonic, may be financed, depending both on the contents of the scientific proposal and the legal framework of the Member States involved. No funding shall be granted , neither within nor outside the EU, for research activities that are prohibited in all the Member States. No activity shall be funded in a Member State where such activity is forbidden. ▌

Article 15 Ethics (27) 1. Actions carried out under the Programme shall comply with ethical principles and relevant national, Union and international legislation, including the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights and its Supplementary Protocols. Particular attention shall be paid to the principle of proportionality, the right to privacy, the right to the protection of personal data, the right to the physical and mental integrity of a person, the right to non-discrimination, the need to ensure protection of the environment and high levels of human health protection. 2. Entities participating in the action shall provide: (a) an ethics self-assessment identifying and detailing all the foreseeable ethics issues related to the objective, implementation and likely impact of the activities to be funded, including a confirmation of compliance with paragraph 1, and a description of how it will be ensured; (b) a confirmation that the activities will comply with the European Code of Conduct for Research Integrity published by All European Academies and that no activities excluded from funding will be conducted; (c) for activities carried out outside the Union, a confirmation that the same activities would have been allowed in a Member State; and (d) for activities making use of human embryonic stem cells, as appropriate, details of licensing and control measures that shall be taken by the competent authorities of the Member States concerned as well as details of the ethics approvals that shall be obtained before the activities concerned start. 3. Proposals shall be systematically screened to identify those actions raising complex or serious ethics issues and submit them to an ethics assessment. The ethics assessment shall be carried out by the Commission unless it is delegated to the funding body. For actions involving the use of human embryonic stem cells or human embryos, an ethics assessment shall be mandatory. Ethics screenings and assessments shall be carried out with the support of ethics experts. The Commission and the funding bodies shall ensure the transparency of the ethics procedures without prejudice to the confidentiality of the content of the procedure . 4. Entities participating in the action shall obtain all approvals or other mandatory documents from the relevant national, local ethics committees or other bodies such as data protection authorities before the start of the relevant activities. Those documents shall be kept on file and provided to the Commission or funding body upon request. 5. If appropriate, ethics checks shall be carried out by the Commission or funding body. For serious or complex ethics issues, the checks shall be carried out by the Commission unless it is delegated to the funding body. Ethics checks shall be carried out with the support of ethics experts. 6. Actions which do not fulfil the ethical requirements referred to in paragraphs 1-4 and are thus not ethically acceptable and therefore shall be rejected or terminated once the ethical unacceptability has been established .

Article 16 Security 1. Actions carried out under the Programme shall comply with the applicable security rules and in particular rules o