WRITTEN QUESTION E-1860/99

by Christos Folias (PPE-DE) and Antonios Trakatellis (PPE-DE) to the Commission

(14 October 1999)

Subject: SMEs and environmental protection

SMEs very often pursue activities which pollute the environment. Taking preventive measures to pursue those activities in an environmentally friendly manner creates a certain cost for SMEs, which is incorporated into the price of their products or services, sometimes making them less competitive. This extraneous cost then acts as a disincentive to developing the ideas and methods required for environmental management.

Experience gained in implementing the EMAS Regulation (eco-management and audit scheme) shows that SMEs avoid taking part in the scheme as they fear that their operating costs and, by extension, the prices of their products or services will increase. There is, therefore, a need to find fresh incentives (financial or otherwise, particularly in the context of the 3rd CSF) and, possibly, to create a specific financial instrument other than the LIFE programme to strengthen the environmental dimension of SMEs.

Will the Commission say:

1. what incentives there are for this purpose to date;

2. what experience has been gained from applying them and what assessment has been made of that experience;

3. what further measures it will take to attain the above objectives?

Answer given by Mrs Wallström on behalf of the Commission

(7 December 1999)

As far as the Eco-management and audit scheme (EMAS) is concerned, this system is designed to function as a market instrument. It relies on market forces such as supply chain pressure and peer pressure to drive its adoption by organisations. This is by far the most equitable approach to small and medium-sized enterprises (SMEs), since if the adoption of EMAS is required for a particular contract then the conditions are the same for all organisations tendering for that contract, thus creating a level playing field. Experience of EMAS to date has shown that organisations of all sizes can participate. A recent study on EMAS showed that in terms of number of employees some 32 % of those participating in EMAS are SMEs. The smallest participant is in fact a three-man organisation in the United Kingdom. The reported reluctance of SMEs to participate in EMAS may be due to the fact that there is as yet insufficient penetration of EMAS into the market and that the market has yet to deliver sufficient benefits to organisations participating in EMAS. The revision of the regulation is intended to address these issues as well as to provide specific measures for SMEs in terms of access to information and existing support funds. In addition, schemes for support have been launched in different Member States and the Commission intends to publicise these on the EMAS website.

EMAS introduction is being co-financed by action 3.2.6 of measure 3.2 Modernisation of businesses of the Industry operational programme (OP), within the Community Support Framework (CSF) for Greece during the current programming period (1994-1999). The purpose of the said action is to help develop the certification of environmental management systems, in accordance with EMAS and with ISO (International Standards Organisation) standard 14001, in industry and in industrial SMEs. Action 3.2.7 of the same measure provides support for businesses to introduce the ecolabel. The total budget for the measure is 702 408, with a contribution of 193 809 from the European Regional Development Fund.

A series of studies on the introduction of EMAS in certain public sector industrial enterprises is being funded through the Environment OP of the same CSF. The total budget for this action is 354 000. The results, including the number of firms which have obtained certification, will be evaluated upon completion of the programme at the end of 2001.

As the draft Greek CSF for the next programming period (2000-2006) has only just reached the Commission, it is still too early to say what projects might come under it.

The 2000-2006 structural funds can provide incentives to SMEs to register under EMAS (or other measures to go beyond the regulatory minimum). These incentives can be direct or indirect. On the one hand, the structural funds could provide financial support to SMEs implementing EMAS. On the other hand, being registered under EMAS could give SMEs a priority in any other financial support scheme, irrespective of its aim. The communication from the Commission on the structural funds and their coordination with the cohesion fund guidelines for programmes in the period 2000-2006(1) recommended the Member States to follow this path. It is now up to Member States, preparing their 2000-2006 plans and programmes, to make use of the possibilities offered by the structural funds to promote EMAS amongst SMEs.

It is also worth mentioning that, at the initiative of the Parliament, the Growth and environment scheme was established in 1995. This is managed by the European Investment Fund, with budgetary support from the Commission. Under this scheme, loans issued to SMEs by intermediary banks in the Member States for environment-related investment are guaranteed, thus providing the SMEs with cheaper loans.

(1) COM(1999) 344 final.