EUROPEAN COMMISSION Brussels, 23.2.2021 COM(2021) 87 final 2021/0048(NLE) Proposal for a COUNCIL REGULATION establishing the Joint Undertakings under Horizon Europe {SEC(2021) 100 final} - {SWD(2021) 37 final} - {SWD(2021) 38 final}



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL ·Reasons for and objectives of the proposal Horizon Europe – the new EU Framework Programme for Research and Innovation (2021-2027) – aims to increase the EU’s research and innovation impact by combining European partnership co-investment with additional private and public sector funds in areas where the scope and scale of the research and innovation resources can help achieve the EU's Horizon Europe priorities notably, its Pillar II – Global challenges and European industrial competitiveness. [Article 8(1)(c)] of the Horizon Europe Regulation stipulates that institutionalised European partnerships based on Article 185 and 187 TFEU “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”. In the Horizon Europe Regulation, the co-legislators have also identified eight priority areas for possible institutionalised European partnerships on the basis of Articles 185 or 187 TFEU. Based on this, a set of twelve initiatives were identified as candidates that were subject to a coordinated impact assessment. This proposal covers nine institutionalised European partnerships based on Article 187 TFEU, establishing individual joint undertakings for their implementation. In addition, the European Commission also adopted a proposal for an institutionalised European Partnership for high performance computing, based on Article 187 TFEU [COM(2020) 569 final], and it plans to adopt a proposal for a European partnership on metrology, based on Article 185 TFEU [add reference]. Two initiatives – one on cooperative, connected and automated mobility and another one on innovative small and medium-sized enterprises - were also among the initial candidate institutionalised European partnerships. However, the impact assessment process concluded that another intervention form would be more appropriate. · Consistency with existing policy provisions in the policy area As part of the Multiannual Financial Framework (MFF) for 2021-2027, Horizon Europe will be more impact driven with a strong focus on delivering European added value. It will also be implemented more effectively and efficiently, notably by ensuring coherence, coordination and complementarity within Horizon Europe, as well as with other EU, local, regional, national and, where relevant, international initiatives and with their related funding sources. Horizon Europe aims to respond to the global challenges that the EU is facing, which call for “a radical new approach to developing and deploying new technologies and innovative solutions for citizens and the planet on a scale and at a speed never achieved before, and to adapting our policy and economic framework to turn global threats into new opportunities for our society and economy, citizens and businesses.” While Horizon Europe continues the efforts to strengthen the EU’s scientific and technological bases and foster competitiveness, it takes a more strategic and impact-based approach to EU research and innovation investment. Consequently, the objectives of Horizon Europe highlight the need “to 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.” European partnerships are key approaches in Horizon Europe. They complement the existing policy framework by addressing the global challenges and EU priorities that require critical mass and a long-term vision that is agreed and committed to by the respective sectors. The challenges of climate and environmental change, attaining European technological leadership and open strategic autonomy, and ensuring a sustainable and inclusive recovery require directing dispersed research and innovation efforts towards a shared vision on the required transformation process. By teaming up with both the public and private sectors, European partnerships help speed up new solutions, particularly those that can decrease greenhouse gas emissions by 2030 in line with the European Green Deal targets, and help achieve the green and digital transitions. They enable systematic engagement with a variety of stakeholders and end users, including standardisation bodies and international partners to ensure that these solutions are taken up and can ultimately deliver on the ambitious goals. They also help to strengthen the European Research Area by aligning research and innovation agendas, improving skills, and increasing the absorption capacities of European businesses. The nine institutionalised European partnerships based on Article 187 TFEU are fully in line with the Horizon Europe’s new impact-driven policy approach to European partnerships. They make up part of the portfolio of 49 candidate European partnerships, thereby ensuring a coherent landscape. As part of the strategic planning, it was decided that institutionalised European partnerships would be used for the objectives and impacts that could not be achieved by other forms of European partnerships and for those priorities with a long-term perspective and high degree of integration. ·Consistency with other Union policies As part of the 2021-2027 MFF, Horizon Europe - the new EU Framework Programme for Research and Innovation will play a central role leading the social, economic, and environmental transitions needed to achieve EU policy priorities. Under Horizon Europe’s strategic planning process, the first strategic plan for 2021-2024 has been developed. The key strategic orientations for research and innovation support, co-designed with stakeholders, are fully in line with EU priorities. The actions under Horizon Europe’s Pillar II “Global Challenges and European Industrial Competitiveness” will therefore target selected high impact themes that can significantly contribute to delivering on the EU’s political priorities. The European partnerships are firmly set within the context and structure of Horizon Europe, societal challenges that constitute Horizon Europe’s Pillar II research and innovation priorities. They will play an important role in achieving the Commission’s strategic objectives, namely, accelerating the transition towards a green, climate neutral, and digital Europe, while strengthening the resilience and competitiveness of European industry. The contribution of the nine institutionalised European partnerships covered by the proposal to EU priorities are as follows: Circular Bio-based Europe: This partnership contributes significantly to the 2030 climate targets, paving the way for climate neutrality by 2050, and increase the sustainability and circularity of production and consumption systems, in line with the European Green Deal. It aims to develop and expand the sustainable sourcing and conversion of biomass into bio-based products by focusing on multiscale biorefinery processing, and, by applying circular economy approaches such as utilisation of biological waste from agriculture, industry and municipal sectors. It also aims to support the deployment of bio-based innovation at regional level with an active involvement of local actors and with a view to reviving rural, coastal and peripheral regions. Clean Aviation: This partnership puts aviation en route to climate neutrality, by accelerating the development, integration, and validation of mainly disruptive research and innovation solutions so that they can be deployed as soon as possible. It also aims to develop the next generation of ultra-efficient low-carbon aircraft, with novel power sources, engines, and systems, which will emerge from the research and demonstration phase at a high technology readiness levels (TRL). Supporting aviation research and innovation improves competitiveness and employment in the aviation sector that will be especially important for the recovery. Some objectives to be achieved by 2030: demonstrate disruptive aircraft technological innovations able to decrease net emissions of greenhouse gasses by no less than 55% by 2030, compared to 1990 levels and on a pathway towards reaching climate neutrality by 2050. Clean Hydrogen: This partnership will accelerate the development and deployment of European value chain for clean hydrogen technologies, contributing to a sustainable, decarbonised and fully integrated energy system and to the communication on "a hydrogen strategy for a climate-neutral Europe” (COM/2020/301). Focus is placed on producing, distributing and storing clean hydrogen and, supplying hard to decarbonise sectors such as heavy industries and heavy-duty transport applications. Some objectives by 2030: produce clean hydrogen at ~€1.5-3/kg, which will require reaching the 2030 targets in efficiency improvement and lowering CAPEX costs. In addition, this also assumes the availability of renewable electricity at favourable prices, as well as allowing penetration into mass markets, and reducing distribution costs to less than EUR 1/kg of hydrogen at scale.

Europe’s Rail: This partnership will speed up the development and deployment of innovative technologies (especially digital and automation) to achieve the radical transformation of the rail system and deliver on European Green Deal objectives, for example, shift a substantial part of the 75% of inland freight carried by road towards transport by rail and inland waterways. The partnership will develop solutions that are widely supported across the EU, resulting in a market uptake of up to 75% by 2030, improving the competitiveness of rail and supporting the European technological leadership in rail. Global Health EDCTP3: This partnership will deliver new solutions for reducing the burden of infectious diseases in sub-Saharan Africa, and strengthen research capacities to prepare and respond to re-emerging infectious diseases in sub-Saharan Africa and across the world. By 2030 it aims to have progressed to license at least two new health technologies tackling infectious diseases, and to have supported at least 100 research institutes in 30 countries to enable effective and rapid research response to develop health technologies against re-emerging epidemics. Innovative Health Initiative: This initiative will help create an EU-wide health research and innovation ecosystem that facilitates the translation of scientific knowledge into tangible innovations. It will support the development of safe, effective, people-centred and cost-effective products and services that target key unmet public health needs and drive cross-sectoral health innovation for a globally competitive European health industry. It will cover prevention, diagnostics, treatment and disease management. Some of its 2030 targets would include launching at least 30 large scale cross-sectoral projects, focusing on health innovations as well as exhibiting the feasibility of integrating health care products or services. The initiative will contribute to reaching the objectives of Europe’s Beating Cancer Plan, the new Industrial Strategy for Europe and the Pharmaceutical Strategy for Europe. Key Digital Technologies: Key digital technologies encompass electronic components, their design, manufacture and integration in systems and the software that defines how they work. The overarching objective of this partnership is to support the digital transformation of all economic and societal sectors, make the transformation work for Europe and support the European Green Deal. By 2030 it aims that EU leadership in key digital technologies will strengthen industrial strongholds, having seized emerging opportunities to establish technological sovereignty and boost competitiveness. Single European Sky ATM Research: The initiative aims to digitally transform air traffic management, to make European airspace the most efficient and environmentally friendly sky to fly in the world and to support the competitiveness and recovery of Europe’s aviation sector following the COVID-19 crisis. Goals include: improving connectivity, air-ground integration and automation, increasing flexibility and scalability of airspace management and the safe integration of unmanned aircraft. By 2030 it aims to have delivered the solutions identified in the European Air Traffic Management Master Plan for Phase D at TRL 6. Smart Networks and Services: This partnership will support technological sovereignty for smart networks and services in line with the new industrial strategy for Europe and the 5G cyber-security toolbox. It aims to help resolve societal challenges and to enable the digital and green transition. For the COVID-19 crisis, it will support technologies that respond to both the health crisis and the economic recovery. The partnership will enable European players to develop the technology capacities for 6G systems as a basis for future digital services towards 2030. It will help lead markets for 5G infrastructure and services to develop in Europe by coordinating 5G deployment with Connecting Europe Facility 2 Digital (CEF). 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY ·Legal basis These proposals for institutionalised European partnerships are based on Article 187 TFEU according to which the EU may set up joint undertakings or any other structure necessary to efficiently carry out EU research, technological development and demonstration programmes. ·Subsidiarity (for non-exclusive competence) Research is a shared competence between the EU and its member states according to the TFEU. Article 4 (3) specifies that in the areas of research, technological development and space the EU can carry out specific activities, including defining and implementing programmes, without affecting the member states’ freedom to act in the same areas. The proposed initiatives focus on areas where there is a demonstrable value added in acting at EU level due to the scale, speed and scope of the efforts needed for the EU to meet its long-term Treaty objectives and deliver on its strategic policy priorities and commitments. The proposed initiatives should also complement and reinforce national and sub-national activities in the same area. As European partnerships are based on a common long-term Strategic Research and Innovation Agenda, they are well suited to address complex cross-border challenges. They are able to address a set of systemic, market and transformational failures, which is a pre-condition for accelerating the development and diffusion of innovations. They focus on: ·strengthening collaboration and knowledge exchange between key actors in the European research and innovation system, including cross-disciplinary and cross-sectoral collaboration and an improved integration of value chains and ecosystems; ·ensuring alignment and integration of European, national / regional and industrial research and innovation strategies, programmes and investments with the agreed directions; ·creating critical scales of investments on common priorities and increasing private investment in research and innovation; ·reducing risks and uncertainties for industry that are related to investing in research and innovation activities and new technologies / solutions by sharing risks and providing investment predictability. Action at national level or by industry alone cannot achieve the scale, speed and scope of research and innovation support needed for the EU to meet its long-term Treaty objectives, deliver on its strategic policy priorities (including the climate and energy goals set out in the Paris Agreement, and the European Green Deal), and to contribute to tackling global challenges and meeting the Sustainable Development Goals (SDGs). ·Proportionality The proportionality principle underpins the entire approach that led to this proposal. The political and legal context has changed since the current partnerships were established. There is now a greater focus on the need to rationalise key EU policy priorities and ensure they have a measurable impact. Given the new context, it is important to only opt for a European Partnership when there is a real and demonstrable added value. Each institutionalised European partnership must therefore prove its added value –– notably that its objectives cannot be more effectively achieved through simpler means, including the default approach of traditional Horizon Europe calls or simpler partnership forms, such as “co-programmed partnerships”.

The proportionality of the candidate partnerships was assessed according to the following two-step logic: (1)Justification of the use of a partnership approach in a given area (including considerations on additionality, directionality and a link with strategic priorities) instead of other forms of intervention available under Horizon Europe; (2)If the partnership approach is deemed appropriate, proportionality considerations guided the assessment of which type of partnership (co-programmed, co-funded or institutionalised partnership) would be most effective in achieving the intended objectives. ·Choice of instrument This proposal aims to establish nine joint undertakings based on Article 187 TFEU. For this kind of structure, Article 188(1) TFEU requires the adoption of a Council Regulation. 3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS ·Ex-post evaluations/fitness checks of existing legislation Conclusions of past evaluations were thoroughly considered in developing Horizon Europe. These findings have also shaped the new impact-based approach for partnerships and have helped to operationalise the criteria for their selection, implementation, monitoring, and phasing out. As indicated in Annex 5 of Horizon Europe’s impact assessment, the areas for improvement were the following: ·The Horizon 2020 interim evaluation concluded that the overall partnership landscape had become overly complex and fragmented. While the overall number of research and innovation partnerships in Horizon 2020 is about 100, they represent on average about 25% of the available Horizon 2020 budget with public-private partnerships (PPP) accounting for about 17.5% of the Horizon 2020 budget. The interim evaluation identified the need to rationalise the overall European research and innovation partnership landscape, improve their partnerships’ openness and transparency and link them with future EU research and innovation strategic priorities and Horizon Europe missions. ·The Article 187 evaluation pointed out that PPP activities need to be aligned with EU, national and regional policies. It recommended a revision of the key performance indicators as well as the inclusion of a wider range of stakeholders in the governance structures or in submitted proposals. It also highlighted the need to improve and enforce communication particularly, to ensure effective dissemination of project results. For individual initiatives, the thematic parts of each impact assessment accompanying this proposal explain how lessons from past evaluations, both positive and negative, have also been applied. ·Stakeholder consultations This proposal and the accompanying impact assessments were subject to a wide stakeholder consultation, both during the preparation of the Horizon Europe proposal and later on for all European partnership candidates: –Member states were consulted through the Horizon Europe Programme Committee’s ‘Shadow Strategic Configuration’; –An open public consultation (OPC) for candidates for institutionalised partnerships based on Article 185 and 187 of the TFEU was held between 11 September and 6 November 2019 and generated over 1 600 replies; –Targeted consultations were held to prepare the impact assessments for 12 candidate institutionalised partnerships. For each candidate, an external consultant interviewed a representative sample of stakeholders, asking their opinion on the need for and added value of EU action. The findings of all stakeholder consultations have been integrated in the individual impact assessments accompanying the proposed partnerships and have helped determine the selection of the preferred mode of implementation. ·Collection and use of expertise To prepare the impact assessment for this proposal, the Commission asked an external contractor to carry out a study on the candidate institutionalised partnerships and to develop a common methodology for assessing the effectiveness, efficiency, coherence and Union added value of the initiatives to ensure comparability. The external study is publicly available at the EU Bookshop and is referred to in the impact assessments for each initiative. The Commission used the evidence collected for the study, particularly on stakeholder opinions, ex-post evaluation results, identification of the problems to be addressed and expected impacts of the policy options, but also conducted its own analysis of this information in light of recent policy changes and additional evidence that became available following the conclusion of the study. ·Impact assessment

Once the candidate institutionalised European partnerships were identified, the impact assessment process was launched to identify the most suitable implementation arrangement for each initiative from the following policy options: Option 0 – Baseline option – Traditional calls under the framework programme Option 1 – Co-programmed European partnership Option 2 – Co-funded European partnership Option 3 – Institutionalised partnership ·Sub-option 3a institutionalised partnerships based on Art 185 TFEU ·Sub-option 3b institutionalised partnerships based on Art 187 TFEU. The comparative assessment of the merits of each option included an analysis of the relevance of the intervention, its proportionality and effectiveness in achieving the intended objectives. This resulted in a tailored approach being suggested for each candidate, ranging from administratively lighter forms of cooperation to institutionalised ones, depending on the intended policy objectives, specific challenges and desired outcome identified for each candidate. The individual impact assessments were presented to the Regulatory Scrutiny Board in three separate hearings between March and June 2020. Two impact assessments received a positive opinion on their first reading, six received a positive opinion with reservations and four received a negative opinion and had to be resubmitted to the Board. The mains criticisms for the cases that received a negative opinion concerned: the scope of the proposed initiative, the need to clarify the problems and objectives that the proposed initiative could effectively tackle under the next framework programme, the impact of discontinuing a pre-existing initiative (where applicable) and, in some instances, the difference between the preferred option and other alternatives. The four impact assessments with a negative opinion on first reading were resubmitted. Three of them received a positive opinion with reservations and the fourth received a positive opinion. ·Regulatory fitness and simplification The proposed initiatives respond to the need to simplify the approach to partnerships as put forward by the Horizon Europe proposal. This need was endorsed by the Parliament and the Council. As a result, it was agreed that Horizon Europe would support three types of partnership: co-funded, co-programmed and institutionalised (based on Article 187 or 185 TFEU and EIT KICs). This is in line with the spirit of the Regulatory Fitness and Performance Programme (REFIT). The impact assessment accompanying this proposal looks at all initiatives separately, but also takes a cross-cutting approach, identifying ways to increase efficiency and coherence, and therefore maximise each partnership’s impact. It identifies common elements that will help all initiatives meet their objectives while reducing costs, for example by adapting the governance arrangements to ensure coherence with other initiatives. This approach is fully in line with the better regulation framework and simplification efforts. The Single Basic Act contributes to the goal of rationalising the EU research and innovation funding landscape and to a strategic and impact-driven approach to European partnerships. The Horizon Europe Regulation includes several common requirements for setting up and implementing European partnerships. By adopting a modular approach, the Single Basic Act allows the common provisions for all joint undertakings to be translated coherently (in Part One) allowing sufficient flexibility to meet the specific needs of each of them (in Part Two). ·Fundamental rights This Regulation respects fundamental rights as set out in the Charter of Fundamental Rights of the European Union. Most of the proposed initiatives do not have a direct impact on fundamental rights. When they do, a specific assessment is included in section 6 of each impact assessment. 4.BUDGETARY IMPLICATIONS The maximum Union financial contribution to the joint undertakings shall be EUR 9 600 million, including EFTA contributions, paid from the appropriations in the general budget of the Union allocated to the Horizon Europe Specific Programme implementing the Horizon Europe Framework Programme. This contribution will be made from Pillar II ‘Global Challenges and Industrial Competitiveness’. The funds made available by the Union to cover operational costs will be at least matched by contributions from members other than the Union. The administrative costs of the joint undertakings shall not exceed EUR 501.174 million for the duration of the joint undertakings. These costs will be covered through financial contributions by the Union and the members other than the Union.

5.OTHER ELEMENTS ·Implementation plans and monitoring, evaluation and reporting arrangements The partnerships will be monitored and evaluated in line with Articles 45 and 47 and Annex III of the Horizon Europe Regulation. The interim and ex-post evaluations will be supported by external contractors and fed into the overall Horizon Europe evaluations. In accordance with the criteria set for European partnerships, the evaluations will assess the most effective policy intervention mode for any future action, as well as the possible renewal of the partnership within the overall European partnerships landscape. In the absence of renewal, appropriate measures will be developed to ensure the phasing-out of framework programme funding according to the conditions and timeline agreed with the partners of the partnership. ·Detailed explanation of the specific provisions of the proposal The institutionalised European partnerships are designed to increase coherence and to maximise impact in an evolving research and innovation landscape. The proposed Council Regulation consists of three parts: ·Part One contains provisions common to all joint undertakings with the aim to streamline and harmonise the legal boundary conditions and provide a modular approach on which individual joint undertakings can base their operational architecture. ·Part Two contains provisions that are specific to individual joint undertakings that allow for the necessary flexibility to take into account operational and policy needs. ·Part Three contains final provisions applicable to all joint undertakings. ·Article 4: objectives and principles for joint undertakings are firmly set within the objectives and structure of Horizon Europe, and closely linked to the achievement of EU policy objectives. A set of common objectives has been identified based on the coordinated impact assessment. ·Article 5: operational objectives and tasks – these provisions reflect the requirements and implementation criteria for European partnerships, including the need to ensure a systemic approach in achieving the objectives, access to results, monitoring to track progress towards policy objectives, the promotion of inclusiveness towards stakeholders and the involvement of small and medium-sized enterprises. ·Article 7: sets out a common process for selecting new members, thereby ensuring transparency and openness across the initiative, in line with the Horizon Europe Regulation. ·Article 11: provides a framework to ensure partners’ contributions throughout the initiative’s lifetime and that the costs are shared between the EU and the partners other than the Union, which is a core condition of a partnership approach. This article stipulates that contributions and commitments must increase, in a qualitative and quantitative manner, in line with the Horizon Europe Regulation. It establishes a systemic approach to contributions from industry partners across all Article 187 TFEU initiatives that is accountable, supports the openness of initiatives and is coherent, transparent, and fair, while ensuring the attractiveness of the initiative for new members. ·Phasing out: provisions are closely linked to the achievement of specific objectives. Article 16(2)(y) requires the governing board to set out a realistic plan to continue the initiative outside the scope of an institutionalised partnership, by the end of 2022, in time to feed into the interim evaluation of Horizon Europe. This should ensure that dissemination activities continue after Union participation has ended and that links with industrial and other policies are made in order to transition the initiative from research and innovation towards deployment. ·Governance provisions: harmonise the functioning of the different bodies across the joint undertakings. Each joint undertaking is supported by advisory groups in order to have scientific and expert advice, consult stakeholders, and involve member states (if they are not partners). However, there is flexibility for joint undertakings to use existing configurations for advisory function or establish one configuration that serves more than one of them. ·Coherence and synergies (Articles 5, 16, 18, 24): The Horizon Europe Regulation stipulates that “Coordination and/or joint activities with other relevant research and innovation initiatives to secure optimum level of interconnections and ensure effective synergies”. In line with this, Part One sets out how joint undertakings are expected to collaborate with other partnerships, and interact with the broader eco-system, notably on their tasks and those of their governing board, the role of the states’ representatives group and reporting via the annual activity report. Part two lists some priority European partnerships with which individual joint undertakings are expected to establish a formal and regular collaboration. 2021/0048 (NLE) Proposal for a COUNCIL REGULATION establishing the Joint Undertakings under Horizon Europe THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 187 and the first subparagraph of Article 188, Having regard to the proposal from the European Commission, Having regard to the opinion of the European Parliament, Having regard to the opinion of the European Economic and Social Committee, Whereas: (1)In order to achieve the greatest possible impact of Union funding and the most effective contribution to the Union's policy objectives, Regulation [XXXX] of the European Parliament and of the Council (the ‘Horizon Europe Regulation’)] established the policy and legal framework for European partnerships with private and/or public sector partners. European partnerships are a key element of the policy approach of Horizon Europe. They are set up to deliver on Union priorities targeted by Horizon Europe and ensure clear impact for the EU and its people, which can be achieved more effectively in partnership, through a strategic vision that is shared and committed to by partners, rather than by the Union alone. (2)In particular, European partnerships in the “Global Challenges and European Industrial Competitiveness” pillar of Horizon Europe play an important role in achieving the strategic objectives such as accelerating the transitions towards sustainable development goals and a green and digital Europe and should contribute to recovery from the unprecedented COVID-related crisis. European partnerships address complex cross-border challenges that require an integrated approach. They make it possible to address the transformational, systemic and market failures described in the impact assessments accompanying this Regulation by bringing together a broad range of players across the value chains and ecosystems to work towards a common vision and translating it into concrete roadmaps and coordinated implementation of activities. Furthermore, they allow concentrating efforts and resources on common priorities to solve the complex challenges. (3)To deliver on priorities and impact, European partnerships should be developed through a broad involvement of relevant stakeholders across Europe including industry, research organisations, bodies with a public service mission at local, regional, national or international level, and civil society organisations such as foundations that support and/or carry out research and innovation. They should also be one of the measures to strengthen cooperation between 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 interests in strategic areas. (4)The interim evaluation of Horizon 2020 revealed that a considerable repertoire of partnership instruments and initiatives have been introduced over time, with seven forms of implementation and close to 120 partnership initiatives running under Horizon 2020. In addition to the complexity generated by the proliferation of instruments and initiatives, it has been assessed that their ability to contribute to related policies at Union and national level as a whole is not sufficient despite the fact that they deliver several positive impacts in progressing towards their objectives, for example by setting long-term agendas, structuring research and innovation cooperation between otherwise dispersed actors, and leveraging additional investments. The impact assessment of Horizon Europe identifies therefore the need to address and to rationalise the Union research and innovation funding landscape, in particular with respect to partnerships, as well as to re-orient partnerships towards more impact and delivery on Union priorities. (5)To address such concerns and to achieve the higher ambition for European investments, Horizon Europe should put forward a major simplification and reform for the Commission’s policy on research and innovation partnerships. In order to reflect its systemic nature aimed at contributing to Union-wide ‘transformations’ towards the sustainability objectives, Horizon Europe should make a more effective use of these partnerships with a more strategic, coherent and impact-driven approach. (6)Regulation (EU) 2020/852 establishes the general framework for determining whether an economic activity qualifies as environmentally sustainable for the purposes of defining sustainable investments. It creates a common reference that investors, banks, industry and researchers can use when investing in projects and economic activities that have a substantial positive impact on climate and environment and no significant harm on any of them. It is the reference for green investments in the Union. (7)Where relevant, partnerships should consider Technical Screening Criteria as of Art. 3 and the “Do No Significant Harm” principle as of Art. 17 of the Regulation (EU) 2020/852 as an instrument to improve their projects readiness and access to green financing that will be crucial for market uptake and wider deployment of the innovative technologies and solutions they will deliver. Scientific evidence is at the core of the Technical Screening Criteria. Research and innovation, pursued by Partnerships, should play an important role to help economic operators reach or go beyond the standards and thresholds set up in the Regulation and to keep the Technical Screening Criteria up-to-date and consistent with the European Green Deal objectives. (8)On the basis of the Horizon Europe Regulation, it should be possible for the European partnerships to be set up using three different forms namely, “co-funded”, “co-programmed” and “institutionalised”. The setting-up of institutionalised partnerships should involve new Union legislation and the establishment of dedicated implementing structures pursuant to Article 185 or Article 187 of the Treaty on the Functioning of the European Union (TFEU). (9)The Horizon Europe Regulation defines eight priority areas, in which institutionalised partnerships could be proposed. Across those priority areas, several initiatives for institutionalised partnerships are put forward and nine of them are covered by this Regulation. (10)The research and innovation activities undertaken by the joint undertakings should be funded from Horizon Europe. To achieve maximum impact, the joint undertakings should develop close synergies with other Union programmes and funding instruments, particularly with those supporting the deployment of innovative solutions, education and regional development, in order to increase economic and social cohesion and reduce imbalances. (11)The new policy approach for European Partnerships, and in particular institutionalised European partnerships, calls for a novel way of establishing the legal framework under which they would operate. While the setting up of joint undertakings on the basis of Article 187 TFEU for the purpose of Horizon 2020 has proven to be effective as far as the implementation is concerned, it is necessary to step it up. Therefore, this Regulation aims at increasing the coherence, efficiency, effectiveness and impact-orientation of implementation through translating the Horizon Europe provisions, and the experience gained from programme implementation under Horizon 2020 into common provisions across the joint undertakings in a harmonised way. It aims at facilitating the creation of collaboration and synergies between European partnerships, thereby making full use of their interconnections at the organisational level. Joint undertakings should seek opportunities to involve representatives of other European partnerships in discussions during the drafting of their work programmes, identify the areas in which complementary or joint activities would address the challenges more effectively and efficiently, avoid overlaps, align timing of their activities and ensure access to results and other relevant means of knowledge exchange. (12)Following the identification of synergies between them, joint undertakings should aim to determine budget shares which should be used for complementary or joint activities between joint undertakings. Moreover, this Regulation aims at achieving improved efficiencies and harmonisation of the rules through intensified operational collaboration and by exploring economies of scale, including the establishment of a common back office, which should provide horizontal support functions to the joint undertakings. The common back office should make it easier to achieve greater impact and harmonisation on common points while retaining a certain degree of flexibility to meet the specific needs of each joint undertaking. The structure should be established using service level agreements to be concluded jointly by the joint undertakings. The common back office functions should cover coordination and administrative support functions in areas where its screening has proved efficient and cost-effective and should take into account the compliance with the requirement of accountability of each individual authorising officer. The legal setup should be designed to best serve the common needs of the joint undertakings, to ensure their close collaboration and to explore all possible synergies among the European partnerships and, as a consequence, between the various parts of the Horizon Europe programme as well as between the other programmes managed by the joint undertakings. (13)The impact assessments regarding each joint undertaking established by this Regulation, have provided evidence that justifies the implementation of partnerships in accordance with the Horizon Europe Regulation only where other parts of the Horizon Europe programme, including other forms of European partnership would not achieve the objectives or would not generate the necessary expected impacts, whereby such implementation is justified by a long-term perspective and high degree of integration. (14)Horizon Europe introduces a more strategic, coherent and impact-driven approach to European partnerships, building on the lessons learned from the Horizon 2020 interim evaluation. In line with the new ambition, this Regulation aims at a more effective use of institutionalised European partnerships notably by focusing on clear objectives, outcomes and impact that can be achieved by 2030, and by ensuring a clear contribution to the related Union policy priorities and policies. Close collaboration and synergies with other relevant initiatives at Union, national and regional level, in particular with other European partnerships, are key in achieving greater impact and ensuring take up of results. In assessing the overall impact, broader investments beyond the contributions from partners and triggered by the joint undertakings that contribute to achieving their objectives should be taken into account. (15)This Regulation is based on the principles and criteria set out in the Horizon Europe Regulation, including openness and transparency, a strong leverage effect and long-term commitments of all the involved parties. One of the objectives of this Regulation is to ensure the openness of the initiatives to a broad range of entities, including newcomers. The partnerships should be open to any entity that is willing and capable to work towards the common goal, and promote broad and active participation of stakeholders in their activities, membership and governance, and to ensure that the results would be for the benefit of all Europeans, notably through a broad dissemination of results and pre-deployment activities across the Union.

(16)For actions related to Union strategic assets, interests, autonomy or security, the measures set out in [Article 16] of the Horizon Europe Regulation, should be applicable to work programmes of joint undertakings. (17)[Annex III] of the Horizon Europe Regulation requires that the financial and/or in-kind contributions from partners other than the Union will at least be equal to 50% and may reach up to 75% of the aggregated European Partnership budgetary commitments. Consequently, this Regulation should set out the required contribution from the members of joint undertakings at the same level or higher than the Union contribution. The Union should be in a position to reduce its contribution if members other than the Union fail to fulfil their commitments. (18)In line with the ambitions set out in the Horizon Europe Regulation, one of the preconditions of setting up institutionalised partnerships is ensuring partner’s contributions throughout the lifetime of the initiatives. In this context, private partners should deliver a significant part of their contributions in the form of in-kind contributions to operational costs of the joint undertaking. Joint undertakings should be able to seek measures to facilitate these contributions through their work programmes, notably by reducing funding rates. These measures should be based on the specific needs of a joint undertaking and the underlying activities. In justified cases, it should be possible to introduce additional conditions that require the participation of a member of the joint undertaking or their constituent or affiliated entities, targeting activities where the industrial partners of the joint undertaking can play a key role, such as large-scale demonstrations and flagship projects, and contribute more via lower funding rates. The level of participation of members should be monitored by the executive director in order to empower the governing board to take appropriate actions, ensuring a balance between commitment from partners and openness. In duly justified cases, the capital expenditure for, e.g., large scale demonstrators or flagship projects, may be considered as an eligible cost in line with the applicable legal framework. (19)In line with the principle of fair sharing of contributions among the members of joint undertakings, financial contributions to the administrative costs of the joint undertakings should be divided equally between the Union and the members other than the Union. Deviations from that principle should only be considered in exceptional and duly justified cases such as where the size or the membership structure of a member of the joint undertaking other than the Union would result in contributions per constituent or affiliated entity, in particular small and medium-sized enterprises (SMEs), of such a high level that they would seriously jeopardise the incentive to become or remain a constituent or affiliated entity of the member of the joint undertaking. In such cases, the minimum percentage of annual financial contribution to the administrative costs of the joint undertaking from members other than the Union should be 20% of the total annual administrative costs and the contributions from SMEs should be significantly lower than those from larger constituent or affiliated entities. Once a critical mass of membership that allows for a contribution higher than 20% of the total annual administrative costs is reached, annual contributions per constituent or affiliated entity should be maintained or increased with the aim to gradually increase the share of the members other than Union in the overall contribution to the annual administrative costs of the joint undertaking. The members of the joint undertaking other than the Union should endeavour to increase the number of constituent or affiliated entities in order to maximise the contribution to 50% of the administrative costs of the joint undertaking over its lifetime. (20)The Horizon Europe Regulation requires the partners to show their long term commitment, including a minimum share of public and/or private investments. Consequently, it is necessary for the Union to identify in this Regulation founding members established in member states, countries associated to the Horizon Europe Programme or international organisations. However, where necessary, it should be possible to expand the membership base of joint undertakings after they are established with associated members selected following open and transparent procedures, taking into account in particular the new technological developments or the association of additional countries to the Horizon Europe Programme. Legal entities interested in supporting the joint undertakings’ objectives in their specific areas of research, without becoming a member, should also be offered the possibility to become contributing partners of these joint undertakings. (21)The establishment of a joint undertaking ensures a mutually beneficial public-private partnership for the members involved, including by promoting certainty on major budget allocations for the relevant industries over a period of seven years. Becoming a founding member or associated member, or one of their constituent or affiliated entities, allows gaining influence, either directly or through the industry representatives, in the governing board of the joint undertaking. The governing board is the decision-making body of the joint undertaking that decides on the long-term strategic orientation of the partnership, as well as its annual priorities. Founding members and associated members and if applicable representing their constituent entities, should therefore be able to contribute to the joint undertaking's agenda and priority setting through the adoption and possible amendment of the Strategic Research and Innovation Agenda, as well as the adoption of the annual work programme, including the content of the calls for proposals, the applicable funding rate per call topic, and the related rules for submission, evaluation, selection, award and review procedures. (22)It is appropriate that the members other than the Union commit to the implementation of this Regulation by means of a letter of commitment. Those letters of commitment should be legally valid throughout the lifetime of the initiative and closely monitored by the joint undertaking and the Commission. Joint undertakings should create a legal and organisational environment that enables members to deliver on their commitments while ensuring continuous openness of the initiative and transparency during their implementation, notably for priority setting and for participation in calls for proposals. (23)Further simplification is a cornerstone of the Horizon Europe Framework Programme. In that context, there should be a simplified reporting mechanism for partners, who are no longer required to report on non-eligible costs. In-kind contributions to operational activities should be accounted solely on the basis of eligible costs. That allows for the automated calculation of in-kind contributions to operational activities via the Horizon Europe IT tools, lowers the administrative burden for partners and makes the reporting mechanism for contributions more effective. In-kind contributions to operational activities should be closely monitored by the joint undertakings and regular reports should be prepared by the executive director of the governing board in order to establish whether the progress towards reaching the in-kind contributions targets is satisfactory enough. The governing board should assess both the efforts made and the results achieved by the members contributing to operational activities, as well as other factors, such as the level of participation of SMEs and attractiveness of the initiative to newcomers. When necessary, it should take appropriate remedial and corrective measures taking into account the principles of openness and transparency. (24)The joint undertakings should provide a systematic opportunity and incentive for members other than the Union to combine their research and innovation activities with those of the joint undertaking. Additional activities should not receive financial support from the joint undertaking. However, they can be accounted as members’ in-kind contributions when contributing to the objectives of the joint undertaking and directly linked to its activities. That link can be established through the uptake of results from indirect actions funded by the joint undertaking or its preceding initiatives, or by demonstrating a significant Union added-value. This Regulation should lay down more specific provisions concerning the scope of additional activities for each joint undertaking, to the extent that it is necessary to achieve the desired directionality and impact. It should be further decided by joint undertakings’ governing boards whether, for valuing the contributions, the use of simplifying methods such as lump-sums or unit costs is necessary to achieve simplification, cost effectiveness and appropriate level of protection of confidential commercial data. (25)The governance of joint undertakings should ensure that their decision-making processes are fit to keep pace with fast-changing socio-economic and technological environment and global challenges. Joint undertakings should benefit from the expertise, advice and support from all relevant stakeholders, in order to effectively implement their tasks and ensure synergies at Union and national level. Therefore, joint undertakings should be empowered to set up advisory bodies with a view to providing them with expert advice and carrying out any other task of an advisory nature that is necessary for the achievement of the joint undertakings' objectives. In setting up the advisory bodies, joint undertakings should ensure a balanced representation of experts within the scope of the activities of the joint undertaking, including with respect to gender balance. The advice provided by these bodies should bring in scientific perspectives as well as those of national and regional authorities and of other stakeholders of joint undertakings. (26)Joint undertakings should be able to set up an advisory body with a scientific advisory function. That body or its members should be in a position to provide independent scientific advice and support to the respective joint undertaking. The scientific advice should concern, in particular, annual work plans, additional activities as well as any other aspect of the joint undertakings’ tasks, as necessary. (27)Joint undertakings should ensure that member states are sufficiently informed of the joint undertakings’ activities, can provide timely information on activities undertaken in the member states and have the opportunity to contribute to the preparatory and decision-making processes. Such dialogue with member states is particularly important in the context of synergies and the need to ensure the alignment of efforts and activities at national, regional, Union and European level to create more impact. Joint undertakings without the direct or indirect participation of member states as partners should establish a State Representatives Group with the aim of aligning the joint undertakings' activities with the policies and actions taken at national and regional level. (28)With the view to ensuring that joint undertakings are aware of the positions and views of stakeholders from the entire value chain in their respective fields, joint undertakings should be able to set up their respective advisory stakeholders groups, to be consulted on horizontal issues or specific questions, as per the needs of each joint undertaking. Such groups should be open to all public and private stakeholders, including organised interest groups, and international interest groups from member states, associated countries as well as from other countries, active in the field of the joint undertaking. (29)The joint undertakings should operate in an open and transparent way, providing all relevant information in a timely manner to their appropriate bodies as well as promoting their activities, including information and dissemination activities, to the wider public. (30)The joint undertakings should be implemented using a structure and rules that enhance efficiency and ensure simplification. To that effect, the joint undertakings should adopt financial rules specific to its needs in accordance with Article 71 of Regulation (EU, Euratom) No 2018/1046 of the European Parliament and of the Council. (31)The implementation of the joint undertakings should be based on the criteria set out for institutionalised partnerships in the Horizon Europe Regulation. It should be supported by the use of electronic means managed by the Commission. Information related to indirect actions funded by the joint undertakings, including results, is essential for the purposes of developing, implementing, monitoring and evaluating Union policies or programmes. Therefore, joint undertakings should ensure that Union institutions and Union bodies, offices or agencies have access to all information related to the indirect actions they fund, including results of beneficiaries participating in indirect actions. Such access rights should be limited to non-commercial and non-competitive use and should comply with applicable confidentiality rules. Staff of the Union institutions and Union bodies, offices or agencies should be granted access to this information subject to adequate IT security and information security standards and in accordance with the principles of necessity and proportionality. (32)Participation in indirect actions funded by the joint undertakings under Horizon Europe should comply with the rules set out in the Horizon Europe Regulation. The joint undertakings should ensure consistent application of those rules based on relevant measures adopted by the Commission. The joint undertakings should use the corporate model grant agreement prepared by the Commission. In relation to the period to object to transfers of ownership of results referred to in [Article 36(4)] of the Horizon Europe Regulation, the duration of innovation cycles in the areas covered by the respective joint undertakings should be taken into account. (33)One of the main purposes of joint undertakings is to foster the Union’s economic capacities and in particular its scientific and technological sovereignty. Moreover, the post pandemic recovery highlights the need to invest in key technologies such as 5G, AI, cloud, cybersecurity and green tech and the valorisation of these technologies in the Union. Results generated by all participants will play an important role in this respect and all participants will benefit from the Union funding through the results generated in the project and access rights thereto, even those participants not having received Union funding. Therefore, to protect the Union interests, the right for joint undertakings to object to transfers of ownership of results or to grants of an exclusive licence regarding results should also apply to participants not having received Union funding. In exercising this right to object the joint undertaking should strike a fair balance between the Union interests and protection of fundamental rights on the results of the participants without funding in accordance with the principle of proportionality, taking into account that these participants did not receive any Union funding for the action from which the results were generated. (34)The Union financial contribution should be managed in accordance with the principle of sound financial management and with the rules on indirect management set out in Regulation (EU, Euratom) No 2018/1046. (35)For the purpose of simplification, the administrative burden should be reduced for all parties. Double audits and disproportionate amounts of documentation and reporting should be avoided. Audits of recipients of Union funds under this Regulation should be carried out in compliance with the Horizon Europe Regulation and other relevant Union funding programmes.

(36)The financial interests of the Union and of the other members of the joint undertakings should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties in accordance with Regulation (EU, Euratom) No 2018/1046. In view of the specific nature of the actions implemented by some of the joint undertakings requiring them to be phased out over several years, it should be possible to split multiannual budgetary commitments by the Commission and the relevant joint undertaking into annual instalments. In this respect, budgetary commitments of the joint undertakings referred to in points (b), (d) and (h) of Article 3(1) may be divided into annual instalments. Until 31 December 2024, the cumulative amount of those budgetary commitments shall not exceed 50 percent of the maximum Union contribution set out in Article 10 and Article 145. From 1 January 2025, at least 20 percent of the cumulative budget of the residual years shall not be covered by annual instalments. (37)In view of the specific nature and the current status of the joint undertakings, they should continue to be subject to a separate discharge. The auditing of accounts and of the legality and regularity of the underlying transactions should be undertaken by the Court of Auditors. (38)In accordance with [Article 8(2)(c)] of the Horizon Europe Regulation, joint undertakings should have a clear life cycle approach. In order to adequately protect the financial interests of the Union, joint undertakings should be set up for a period ending 31 December 2031 to allow them to exercise their responsibilities with regard to grant implementation until the last indirect actions launched have been completed. (39)In the context of the European Commission’s priority of “A European Green Deal” supported by the revised Union Bioeconomy Strategy, the EU Biodiversity Strategy, the Clean Planet for All Communication, the Circular Economy Action Plan and the new Farm to Fork communication, the European bio-based sector, including SMEs, regions and primary producers should become climate neutral, more circular and more sustainable while remaining competitive on the global scale. A strong, resource efficient and competitive bio-based innovation ecosystem can decrease dependency on and accelerate the substitution of non-renewable fossil raw materials and mineral resources. It can develop renewable bio-based products, materials, processes and nutrients from waste and biomass through sustainability and circularity-driven innovation. Such ecosystem can also create value from local feedstock – including waste, residues and side-streams – to deliver jobs, economic growth and development throughout the Union not only in urban areas but also in rural and coastal territories where biomass is produced and that are often peripheral regions that rarely benefit from industrial development. (40)The Bio-Based Industry Joint Undertaking established under Horizon 2020 has focused on sustainable resource use, especially in resource-intensive and high-impact sectors, such as agriculture, textiles manufacturing and construction, in particular also aiming at local operators, manufacturers, plants and factories. Its interim evaluation published in October 2017 included a strong set of 34 recommendations that are reflected in the design of the Circular Bio-based Europe Joint Undertaking established by this Regulation. The Circular Bio-based Europe Joint Undertaking is not a direct continuation of the Bio-Based Industry Joint Undertaking but rather a programme that builds on the achievements of the predecessor and addresses its shortcomings. In line with the recommendations, the Circular Bio-based Europe Joint Undertaking should involve a wider range of stakeholders including the primary sector (agriculture, aquaculture, fisheries and forestry) as well as providers of waste, residues and side streams, regional authorities and investors to prevent market failures and unsustainable bio-based processes. To deliver on its objectives, it should only fund projects that are respecting principles of circularity, sustainability and planetary boundaries. (41)The Circular Bio-based Europe Joint Undertaking should establish Deployment Groups that should serve as advisory bodies and should actively participate in the strategic discussions that are setting the agenda for the partnership. It is crucial to include those advisory bodies in the governance structure to ensure wider participation and higher private investment in the circular bio-based sector. The Deployment Groups should in particular provide support to the strategic Governing Board meetings where industrial leaders and the stakeholders’ representatives together with high-level Commission representatives join the permanent Governing Board to discuss and set the strategic direction of the partnership. (42)The main objective of the Clean Aviation Joint Undertaking should be to contribute to reducing the ecological footprint of aviation by accelerating the development of climate neutral aviation technologies for their earliest possible deployment, therefore significantly contributing to the ambitious environment impact mitigation goals of the European Green Deal, that is to say a 55% emissions reduction by 2030 compared to 1990 levels, and climate neutrality by 2050. This objective can only be achieved through accelerating and optimising the research and innovation processes in aeronautics and by improving the global competitiveness of the Union aviation industry. The Clean Aviation Joint Undertaking should also ensure that cleaner aviation remains safe, secure and efficient for the transportation of passengers and goods by air. (43)The Clean Aviation Joint Undertaking builds on the experience gained from the Clean Sky and Clean Sky 2 Joint Undertakings. The new partnership should be more ambitious by focusing on developing breakthrough demonstrators. In line with the findings of the interim evaluation of the Clean Sky 2 Joint Undertaking, a new initiative should ensure that every demonstrator has a 'business case' basis in order for the technologies developed to really serve the "earliest possible deployment" which is a key priority. Therefore, the new initiative should focus on increasing the visibility of its individual exploitation objectives and strengthening the monitoring, management and reporting capabilities of the joint undertaking to reflect the complexity of the research and innovation effort required for the partnership to reach its objectives. (44)The Clean Aviation Joint Undertaking should build on a diverse membership base, bringing together a broad spectrum of stakeholders and ideas. In view of identifying the most promising approaches and entities capable of pursuing them, the Commission launched a call for expression of ideas and potential members. The Governing Board should be allowed to select associated members based on the results of that call in order to provide for a swift expansion of the group of members. (45)In order to maximise and accelerate the impact of the research and innovation activities undertaken by the Clean Aviation and Single European Sky ATM Research 3 Joint Undertakings on effective emission reduction and the digitalisation of the aviation industry, they should seek close collaboration with the European Union Aviation Safety Agency (EASA) in the work of the partnership, ensuring an early exchange of knowledge on new technologies developed. That will be crucial to accelerate market uptake, by facilitating the certification process of resulting products and services as required by Regulation (EU) 2018/1189. (46)In order to maximise synergies between programmes at Union, national and regional level, the members of the States’ Representatives Group of the Clean Aviation Joint Undertaking should explore possibilities to provide financial support at national level to excellent proposals that were not selected for funding by the Clean Aviation Joint Undertaking due to oversubscription. (47)Europe faces the challenge of having to play a leading role in internalising the societal costs of greenhouse gas emissions in the air transport business model while continuing to ensure a ‘level playing field’ for European products in the global market. Therefore, the Clean Aviation Joint Undertaking should support the European representatives in international standardisation and international legislative efforts. (48)Interest in Hydrogen has evolved dramatically in the last five years with all member states having signed and ratified the Conference of the Parties (COP21) Paris Agreement. At the end of 2019, the Commission presented the European Green Deal, which aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy, where there are no net emissions of greenhouse gases in 2050. Priority areas include clean hydrogen, fuel cells, other alternative fuels and energy storage. Hydrogen is prominent in the July 2020 “Communications on a hydrogen strategy for a climate-neutral Europe and an EU Strategy for Energy System Integration” as well as for the launch of the European Clean Hydrogen Alliance that brings all stakeholders together to identify technology needs, investment opportunities and regulatory barriers to build a clean hydrogen ecosystem in the Union. (49)Dedicated research and innovation activities related to hydrogen applications have been supported since 2008, mainly through the Fuel Cell and Hydrogen Joint Undertakings (FCH Joint Undertaking and FCH 2 Joint Undertaking) under FP7 and Horizon 2020 as well as by traditional collaborative projects, covering all stages/fields of the hydrogen value chain. The Clean Hydrogen Joint Undertaking should strengthen and integrate Union scientific capacity to accelerate the development and improvement of advanced clean hydrogen applications ready for market, across energy, transport, building and industrial end-uses. This will only be possible if combined with strengthening competitiveness of the Union clean hydrogen value chain, and notably SMEs. (50)To achieve the scientific objectives of the Clean Hydrogen Joint Undertaking, all sectors concerned by the hydrogen economy should be given the possibility to get involved in preparing and implementing its Strategic Research and Innovation Agenda. The public sector should also be involved, especially regional and national authorities, the latter being responsible for setting up climate policies and measures related to market mechanisms, to fill in the gaps between ready-to-market technology development and large-scale uptake. (51)Since hydrogen can be deployed as a fuel, energy carrier and for storing energy it is essential that the clean hydrogen partnership establishes structured collaboration with many other Horizon Europe partnerships, notably for end-use. The clean hydrogen partnership should interact in particular with the zero emission road and waterborne transport, Europe’s railway, clean aviation, processes for the planet and clean steel partnerships. For that purpose, a structure should be set up reporting to the Governing Board in order to ensure the co-operation and synergies between these partnerships in the domain of hydrogen. The clean hydrogen initiative would be the only partnership focused on addressing hydrogen production technologies. Collaboration with end-use partnerships should in particular focus on demonstrating the technology and co-defining specifications. (52)Railways contribute to the Single European Transport Area (SETA) and represent a fundamental element of the Union long term sustainable development strategy policy. In terms of economic size, the direct gross value added of the European rail sector is € 69 billion and the indirect value amounted at € 80 billion. 1.3 million persons were directly employed in the rail sector and more than one million indirectly. (53)The European Green Deal aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases by 2050 and where economic growth is decoupled from resource use. Priority areas include accelerating the shift to sustainable and smart mobility. (54)The Commission Communication on a New Industrial Strategy for Europe (March 2020) underlines that sustainable and smart mobility industries, such as the rail industry, have both the responsibility and the potential to drive the digital and green transition, support Europe’s industrial competitiveness and improve connectivity. Therefore road, rail, aviation, and waterborne transport should all contribute to a 90% reduction in transport emissions by 2050. As a matter of priority, a substantial part of the 75% of inland freight carried today by road should shift onto rail and inland waterways. (55)The Shift2Rail Joint Undertaking was established in 2014 to manage the research, development and validation activities of the Shift2Rail initiative by combining public and private sector funding provided by its members and by drawing on internal and external technical resources. It established new forms of collaboration, consistent with competition rules, between stakeholders from the entire rail value chain and from outside the traditional rail sector, and brought in the experience and expertise of the European Union Agency for Railways on issues relating to interoperability and safety.

(56)The objective of Europe’s Rail Joint Undertaking should be to deliver a high capacity integrated European railway network by eliminating barriers to interoperability and providing solutions for full integration, covering traffic management, vehicles, infrastructure and services. This should exploit the huge potential for digitalisation and automation to reduce rail’s costs, increase capacity, and enhance its flexibility and reliability, and should be based upon a solid Reference Functional System Architecture shared by the sector, in coordination with the European Union Agency for Railways. (57)The Europe’s Rail Joint Undertaking should define in its Master Plan its priority research and innovation activities, and overall system architecture and harmonised operational approach, including large-scale demonstration activities, required to accelerate the penetration of integrated, interoperable and standardised technological innovations necessary to support the Single European Railway Area. (58)Rail is a complex system, with very close interactions between infrastructure managers, rail undertakings (train operators) and their respective equipment (infrastructure and rolling stock). It is impossible to deliver innovation without common specifications and strategy across the rail system. Therefore, the System Pillar of the Europe’s Rail Joint Undertaking should enable the sector to converge on a single operational concept and system architecture, including the definition of the services, functional blocks, and interfaces, which form the basis of rail system operations. It should provide the overall framework to ensure that research targets customer requirements and operational needs that are commonly agreed and shared customer requirements and operational needs. The governance model and the decision making process of the Europe’s Rail Joint Undertaking should reflect the Commission’s leading role in unifying and integrating Europe’s railway system, especially in rapidly and effectively delivering the single operational concept and system architecture, while involving the private partners in advisory and technical support roles. (59)To ensure that the results of low Technology Readiness Levels (TRL) research are effectively used at higher TRLs, and in particular by the Europe’s Rail Joint Undertaking, the Europe’s Rail Joint Undertaking’s programme office should implement such activities. (60)Where necessary, in order to ensure swift transition and expansion of membership, the Governing Board of the Europe’s Rail Joint Undertaking should be allowed to select associated members on the basis of the results of a call for expression of interest launched by the Commission. (61)In the context of the Commission’s priorities of the United Nations Sustainable Development Goals, in particular SDG 3, and the Communication Towards a Comprehensive Strategy with Africa, the Union is committed to contribute to ensure healthy lives and promote well-being for all, to build an even stronger partnership between our two continents and to support the development of research and innovation capacities within Africa. The Global Health EDCTP3 Joint Undertaking should address the lack of appropriate diagnostics, treatments and vaccines, among other so-called health technologies, to address infectious diseases, such as HIV, malaria and tuberculosis, but also other poverty related and neglected infectious diseases, that are prevalent in Africa, especially in sub-Saharan Africa. The COVID19 pandemic has revealed that with the increased connectivity of different regions in the world, through world trade and tourism, infectious diseases can rapidly spread all over the world. Developing health technologies is therefore crucial to limit the spread of infectious diseases, as well as to fight them once they have spread, to protect the health of the citizens in the countries concerned and in the Union. In order to achieve a stronger global health leadership than the current EDCTP2 initiative, the scope of the partnership should be extended to cover response to emerging infectious diseases threats, the increasing problems of antimicrobial resistance and non-communicable diseases co-morbidities. (62)Tackling infectious diseases affecting sub-Saharan Africa with modern technology tools requires the involvement of a large set of actors and long-term commitments. The Global Health EDCTP3 Joint Undertaking should broker productive and sustainable North–South and South–South networking and cooperation, building relationships with multiple private and public sector organisations to strengthen project and institutional collaborations. The programme should also help to establish new North–South and South-South collaborations to conduct multi-country, multi-site studies in sub-Saharan Africa. In addition, a regular international conference, the EDCTP Forum, should provide a platform for scientists and relevant networks from Europe, Africa, and elsewhere to share findings and ideas, and to establish collaborative links. (63)The Global Health EDCTP3 Joint Undertaking should build on the experience gained during the EDCTP and EDCTP2 programmes, achieving results by harnessing investments of the Union, the member states, associated countries and African countries which could not have been achieved by individual countries or by the Union research framework programme alone. The EDCTP Association, representing the states participating in the programme, should contribute financially and with additional activities, to the EDCTP3 Programme and its implementation. It should provide meaningful participation and involvement of the sub-Saharan countries in the decision-making process, which is essential for tackling the burden of diseases in sub-Saharan countries. The initiative should include other international research funders, such as philanthropies, the pharmaceutical industry and other third countries, that should contribute to the partnership as contributing partners on an ad hoc basis. Furthermore, to increase the impact of the programme, the Global Health EDCTP3 Joint Undertaking should have, for specific calls, the possibility to identify legal entities that could participate in indirect actions. It should be possible to provide in the work programme that such legal entities would not be eligible for funding by the joint undertaking. (64)It is essential that the research activities funded by Global Health EDCTP3 Joint Undertaking or otherwise covered by its work programme, are in full compliance with the Charter of Fundamental Rights of the European Union, the European Convention on Human Rights and its Supplementary Protocols, ethical principles included in the World Medical Association’s Declaration of Helsinki of 2008, the standards of good clinical practice adopted by the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use, relevant Union legislation and local ethics requirements of the countries where the research activities are to be conducted. Furthermore, the Global Health EDCTP3 Joint Undertaking should require that the innovations and interventions developed based on results of the indirect actions supported by the programme be affordable and accessible for vulnerable populations. (65)For the Global Health EDCTP3 Joint Undertaking to succeed and incentivise participation in the partnership, the joint undertaking funding should be restricted to legal entities eligible for funding under the Horizon Europe programme and established in constituent states of the European and Developing Countries Clinical Trials Partnership (EDCTP) Association. The entities established in other Union member states, associated countries and sub-Saharan African countries should still be able to participate in the calls without receiving funding. Additionally it should also be possible for entities established in other countries than members of the EDCTP3 Association to be eligible for funding in specific call topics or in case of a call addressing a public health emergency, where it is provided for in the work programme. The Global Health EDCTP3 Joint Undertaking should take all appropriate measures, including contractual, to protect the financial interests of the Union. The conclusion of science and technology agreements with third countries should be sought. Before their conclusion, where entities established in a third country without such an agreement participate with funding in an indirect action, alternative measures to safeguard Union interests should be applied by the EDCTP3 JU: the financial coordinator of the action should be established in a Member State or associated country and the amount of pre-financing as well as liability provisions of the grant agreement should be adapted to adequately take the financial risks into account. (66)In the context of the European Commission’s priorities of “An economy that works for people” and “A Europe fit for the digital age”, the European industry, including SMEs, should become greener, more circular and more digital while remaining competitive on the global scale. The Commission has emphasized the role of medical devices and digital technologies addressing emerging challenges and the use of e-health services to provide high-quality health care, along with a call for ensuring the supply of affordable medicines to meet the Union’s needs, whilst supporting an innovative and world-leading European pharmaceutical industry. The Innovative Health Initiative Joint Undertaking aims to contribute towards strengthening the competitiveness of the Union’s health industry, a cornerstone of the Union’s knowledge-based economy, to an increased economic activity in the development of health technologies, notably of integrated health solutions, and thus serve as a tool for increasing technological sovereignty and fostering the digital transformation of our societies. Such political priorities can be achieved by bringing together the crucial players: the academia, companies of various sizes and end-users of health innovations, under the umbrella of a public-private partnership in health research and innovation. The Innovative Health Initiative Joint Undertaking should help reach the objectives of the ‘Europe’s Beating Cancer Plan’ and the ‘European One Health Action Plan against Antimicrobial Resistance’ . The Innovative Health Initiative Joint Undertaking should be aligned with the new Industrial Strategy for Europe, the Pharmaceutical Strategy for Europe and the SME strategy for a sustainable and digital Europe . (67)The Innovative Health Initiative Joint Undertaking builds on the experience gained from the Innovative Medicine Initiative 2 Joint Undertaking (IMI2 Joint Undertaking) including the work done by this initiative to combat the COVID-19 pandemic. In line with the recommendations of the interim evaluation of IMI2 Joint Undertaking, a successor initiative needs to “enable the active engagement of other industry sectors with the pharmaceutical industry to capitalise on their expertise in the development of new health care interventions”. Therefore, the industry sectors need to cover the biopharmaceutical, biotechnology and medical technology sectors, including companies active in the digital area. The scope of the initiative should cover prevention, diagnosis, treatment and disease management and must be established taking due account of the high burden for patients and/or society due to the severity of the disease and/or the number of people affected, as well as the high economic impact of the disease for patients and for health care systems. The funded actions must respond to the Union public health needs, supporting the development of future health innovations that are safe, people-centred, effective, cost-effective and affordable for patients and for health care systems. (68)To ensure the best opportunity for generating new scientific ideas and successful research and innovation activities, the key actors in Innovative Health Initiative Joint Undertaking should be researchers from various types of entities, public and private. At the same time, end-users such as Union citizens, health care professionals and health care providers should provide input into the strategic design and activities of the initiative, ensuring that it addresses their needs. Furthermore, Union-wide and national regulatory authorities, health technology assessment bodies and health care payers should also provide early input to the partnership’s activities, while ensuring the absence of any conflicts of interest, in order to increase the likelihood that the results of funded actions meet the requirements necessary for uptake and thus reaching the expected impacts. All that input should help better target research efforts towards areas of unmet need. (69)Current health challenges and threats are global. Therefore, the initiative should be open to participation by international academic, industrial and regulatory actors, in order to benefit from wider access to data and expertise, to respond to emerging health threats and to achieve the necessary societal impact, notably improved health outcomes for Union citizens. At the same time, most of the partnership’s activities should be conducted in the Union member states and in Horizon Europe associated countries. (70)The partnership’s objectives should focus on the pre-competitive area, thereby creating a safe space for efficient collaboration between companies active in different health technologies. To reflect the integrative nature of the initiative, help break the silos between health industry sectors and strengthen the industry-academia collaborations, the majority of the projects funded by the initiative should be cross-sectoral. (71)The term Key Digital Technologies refers to electronic components and systems that underpin all major economic sectors. The Commission highlighted the need to master those technologies in Europe, notably in the context of delivering on European policy priorities such as digital technology autonomy. The importance of the area and the challenges faced by the stakeholders in the Union require urgent action in order to leave no weak link in Europe’s innovation and value chains. A mechanism at Union level should therefore be set up to combine and focus the provision of support to research and innovation in electronic components and systems by member states, the Union and the private sector. (72)The Key Digital Technologies Joint Undertaking should address clearly defined topics that would enable European industries at large to design, manufacture and use the most innovative technologies in electronic components and systems. Structured and coordinated financial support at European level is necessary to help research teams and European industries maintain their current strengths at the leading edge in a highly competitive international context and close the gap in technologies that are critical for a digital transformation in Europe that reflects core Union values including privacy and trust, security and safety. Collaboration among stakeholders of the ecosystem, representing all segments of the value chains, is essential for the development of new technologies and the fast market uptake of innovation. Openness and flexibility to integrate relevant stakeholders, including in particular SMEs, in emerging or adjacent areas of technology, or in both, is also vital. (73)The Key Digital Technologies Joint Undertaking should combine the financial and technical means that are essential to master the escalating pace of innovation in this area, to generate important spill-overs for society, and to share risk-taking by aligning strategies and investments towards a common European interest. Therefore, the members of the Key Digital Technologies Joint Undertaking should be the Union, member states and associated countries to Horizon Europe on a voluntary basis, and associations as private members representing their constituent companies [and other legal entities active in the field of electronics components and systems in Europe] Participation of member states will furthermore facilitate a coherent alignment with national programmes and strategies, reducing overlap and fragmentation of efforts while ensuring synergies across stakeholders and activities. (74)In accordance with [Article 8(1)(c)] of the Horizon Europe Regulation, participating states should entrust the Key Digital Technologies Joint Undertaking with the implementation of their contribution to their national participants in indirect actions. The beneficiaries should sign a single grant agreement with the joint undertaking following the Horizon Europe rules, including the respective framework for intellectual property rights, depending on the Union programme supporting the corresponding grant activity. The Key Digital Technologies Joint Undertaking should process the cost claims and execute the payments to the beneficiaries. (75)In implementing the contributions of the participating states to their national participants in indirect actions, the Key Digital Technologies Joint Undertaking should take into account that the participating states have to abide by strict national budgetary rules. In that respect, participating states and the joint undertaking should conclude legally binding agreements committing participating states to the payment of the full amount of their contribution to indirect actions throughout the lifetime of the initiative. Such agreements should be concluded in the context of the annual budgetary procedure and programming of the joint undertaking. The Governing Board should adopt the annual work programme taking due account of those agreements. Only after that and in line with the joint undertaking’s financial rules, the authorising officer should make the budgetary and legal commitments for those indirect actions.

(76)As a continuation of the practice established in the ECSEL Joint Undertaking, a derogation from [Article 30] of the Horizon Europe Regulation is necessary in order to allow different reimbursement rates depending on the type of participant, namely SMEs and non-profit legal entities, and the type of action, to be applied invariably across beneficiaries from all participating states. That should ensure the right balance of stakeholders’ participation in the actions funded by the Key Digital Technologies Joint Undertaking and foster a higher involvement of SMEs as recommended in the ECSEL Joint Undertaking interim evaluation. (77)The Union’s Single European Sky legal framework seeks to reform the European air traffic management (ATM) system through institutional, operational, technological and regulatory actions with the aim of improving its performance in terms of capacity, safety, efficiency and environmental impact. (78)The Single European Sky Air Traffic Management (ATM) Research and Development project (the ‘SESAR project’) aims to modernise ATM and to bundle technological and operational innovation in support of the Single European Sky. It aims at providing the technological solutions for a highly performing ATM by 2035 to enable an uncongested, even safer and more environmentally friendly functioning of the air transport sector. The SESAR project comprises three interrelated, continuous and evolving collaborative processes that define, develop and deploy innovative technological systems and operational procedures underlying the digital European sky defined in the European ATM Master Plan. (79)The “European ATM Master Plan” is the planning tool for ATM modernisation across Europe, connecting ATM research and innovation activities with deployment activities scenarios to achieve the Single European Sky performance objectives. (80)The SESAR Joint Undertaking was first established in 2007 with the objective of managing the definition and development phases of the SESAR project, by combining public and private sector funding provided by its members and by drawing on internal and external technical resources, as well as to execute and update, when necessary, the European ATM Master Plan. It established a new and efficient form of collaboration between stakeholders in a sector where progress is only possible when all stakeholders implement new solutions in a synchronised manner. Given the successful establishment of the SESAR brand name, the new Single European Sky ATM Research 3 Joint Undertaking should continue to make use of it. (81)The Single European Sky ATM Research 3 Joint Undertaking should build on the experience of the SESAR Joint Undertaking and continue its coordination role for ATM research in the Union. The main objectives of the Single European Sky ATM Research 3 Joint Undertaking should be to strengthen and further integrate the research and innovation capacity in Europe, helping to accelerate the digitalisation of the sector and rendering it more resilient and scalable to fluctuations in traffic. It should strengthen, through innovation, the competitiveness of manned and unmanned air transport and ATM services, to support economic recovery and growth. It should develop and accelerate the market uptake of innovative solutions to establish the Single European Sky airspace as the most efficient and environmentally friendly sky to fly in the world. (82)The new Single European Sky ATM Research 3 Joint Undertaking should be able to develop and validate technical input assisting the Commission with regulatory activities in ATM, e.g. preparing all the technical documentation for the common projects established under the Single European Sky Regulation, conducting technical studies or supporting standardisation activities. It should also ensure the stewardship of the European ATM Master Plan endorsed by Council Decision 2009/320/EC, including its monitoring, reporting and updating. In addition, the Commission should have votes in proportion to the Union contribution to the budget, and at least 25% of votes. This setup ensures that the Commission retains a strong ability to steer, from a policy perspective, the work carried out by the Joint Undertaking in relation to these tasks through the strengthened supervision mechanisms established for such bodies. (83)Participation in the Single European Sky ATM Research 3 Joint Undertaking should be open to the widest possible range and representation of stakeholders from all member states and countries associated to Horizon Europe, including SMEs, through different forms of participation. In particular, participation should ensure a proper balance between equipment manufacturers for both manned and unmanned aviation, airspace users, air navigation service providers, airports, military and professional staff associations, and offer opportunities to SMEs, academia and research organisations. In view of identifying the most promising approaches and entities capable of pursuing them, the Commission launched a call for expression of interest for potential members. The Governing Board should be allowed to select associated members on the basis of the results of that call in order to provide for a swift expansion of the group of members. (84)Route charges are entirely borne by airspace users, who contribute indirectly to the research and development efforts financed by major ATM stakeholders like air navigation service providers or the manufacturing industry building and equipping the aircraft used by the airspace users. Therefore, airspace users should be given appropriate representation within the Single European Sky ATM Research 3 Joint Undertaking’s Governing Board. (85)To ensure that the results of ATM exploratory (low Technology Readiness Levels) research are effectively used at higher Technology Readiness Levels, and in particular by the Single European Sky ATM Research 3 Joint Undertaking, the joint undertaking’s programme office should manage such activities. (86)The EUROCONTROL Agency possesses an appropriate infrastructure and the necessary administrative, IT, communications and logistics support services. The Single European Sky ATM Research 3 Joint Undertaking should benefit from such infrastructure and services from EUROCONTROL. In this context, there are few potential synergies that could be gained from pooling administrative resources with other Joint Undertakings through a common back office. For this reason, the Single European Sky ATM Research 3 Joint Undertaking should opt out from the common back office functions established by this Regulation. (87)With the purpose of creating a broad stakeholder base for ensuring the Smart Networks and Services partnership’s objectives, the 5G Infrastructure Association has been established building on the 5G Infrastructure Association. While the new industry association, in the first years following its establishment, is expected to only have a limited number of constituent and affiliated entities, it has the objective to include new members from stakeholder constituencies active in the Smart Network and Services value chain. Considering its expected modest size and the impact on its small and medium enterprises constituent entities, it is not sustainable for the association to contribute to 50% of the administrative costs of the Smart Networks and Services Joint Undertaking over its lifetime, in particular in the first years following its establishment. Additionally, the crisis brought about by the COVID-19 pandemic and its impacts on the economy has posed challenges on the European economic actors including in the field of ICT. Therefore it should be ensured that the private partners of the joint undertaking are able to fulfil their commitments, while the conditions remain attractive and incentivise new partners to join the association. The minimum percentage of annual financial contribution to the administrative costs from members other than the Union should therefore be 20% of the total annual administrative costs. In particular, it should be possible that small and medium sized enterprises constituent entities contribute less than bigger enterprises. The members of the joint undertaking other than the Union should endeavour to increase the number of constituent or affiliated entities in order to maximise their contribution of 50% of the administrative costs of the joint undertaking over its lifetime. (88)In the context of the European Commission’s priorities for 2019-2024 “A Europe fit for the digital age”, “An economy that works for people” and the policy objectives set out in the context of its Communications on “Shaping Europe’s digital future”, Europe needs to develop the critical digital infrastructures based on 5G networks and build its technological capacities towards 6G with a time horizon 2030. In this context the Commission has emphasized the strategic importance of a European Partnership for Smart Networks and Services to provide secure connectivity-based services to consumers and businesses. Those priorities can be achieved by bringing together the key play