Report pursuant to Article 7(3) of Regulation (EC) No 1404/96 (LIFE)
Date: 1997-12-12
Institutions: European Commission
Subjects: EU environmental policy, EU financial instrument, activity report, budget policy, environmental protection

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  12.12.1997 
COM(97) 633  final 

REPORT PURSUANT TO ARTICLE 7(3) OF 

REGULATION (EC) No 1404/96 

LIFE 

(Presented by the Commission) 

SUMMARY 

..... 

CONTENTS 

1. INTRODUCTION 

1.1 Context of the report 

1.2 Description of LIFE 

2. LIFE - NATURE 

2.1 Projects received  and co-financed 

2.2 Financial management 

2.3 Geographical  distribution of projects 

2.4 Types of projects  co-financed  and comments 

3. LIFE-ENVIRONMENT 

3.1 Projects received  and co-financed 

3.2 Financial management 

3.3 Geographical  distribution  of projects 

3.4 Types of projects co-financed 

4. LIFE - THIRD COUNTRIES 

4.1 Projects  received  and co-financed 

4.2 Financial management 

4.3 Geographical distribution of projects 

4.4 Types of projects  co-financed  and comments 

5. GENERAL  CONCLUSIONS 

3 

4 

4 

5 

6 

6 

8 

8 

9 

10 

10 

11 

12 

13 

14 

14 

15 

16 

16 

17 

SUMMARY 

This report has been prepared  pursuant  to  Article 7(3) of the Regulation  governing LIFE, 
the financial instrument  for  the  environment  -  Council  Regulation1 (EEC)  No  1973/92  of 
21 May  1992 modified  by Council Regulation2(EC) No  1404/96  of  15 July  1996.  It  also 
fits in with SEM 2000 (the Sound and Efficient  Management initiative).  Articles 7(3) and 
14 of the LIFE Regulation  require two  reports:  one to  evaluate the reference  amount  for 
LIFE  II  and  one  to  make  proposals  for  any  adjustments  to  be  made  with  a  view  to 
continuing the action beyond  the  second  phase.  The Commission  has decided  to  make  a 
stage-by-stage  evaluation.  This  first  report  pursuant  to  Article 7(3)  covers  the  period 
which  has  elapsed  since  LIFE  was  first  implemented.  It  outlines  the  next  stages  in  the 
process for evaluating implementation of the Regulation, and considers the relevance of its 
objectives and whether they have been achieved, and whether the ideas behind the scheme 
remain valid.  The second report will make proposals for  any adjustments  to be made with 
a view to continuing the scheme.  It will also help to identify  future  actions. 

This  report  looks  at  implementation  of  the  three  aspects  of  LIFE:  nature  conservation 
(LIFE-Nature),  demonstration  projects 
local  authorities 
(LIFE-Environment),  and  cooperation  with  third  countries  bordering  the  Mediterranean 
and  the  Baltic  Sea,  other  than  the  countries  of  Central  and  Eastern  Europe  which  have 
signed association agreements with the European Union (LIFE-Third countries). 

industries  and 

involving 

Since  1996 the Commission has been receiving some 900 projects  each year.  One third  of 
these  projects  are  eligible  but  only  half  of  them  can  be  co-financed  with  the financial 
resources  currently  available,  which  means  that  LIFE  would  actually  be  able  to  put  to 
good  use  greater  resources  up  to  and  even  beyond  the  current  reference  amount  of 
ECU 450 million  for  the  period  from  1996  to  1999.  However,  at  a  time  of  rigorous 
budget  policy,  the  Commission  considers  it  necessary  to  propose  to  the  budgetary 
authority  a preliminary  draft  budget  requiring  no  increase  in appropriations.  As a  result, 
the  amount  requested  for  LIFE  will  make  it  impossible  to  attain  the  reference  amount 
originally planned for the period  as a whole. 

1  OFFICIAL JOURNAL NO. L 206 , 22/07/1992 P. 0001 

FINNISH SPECIAL EDITION  ....: T  15 VOLUME  11 P.  108 
SWEDISH SPECIAL EDITION  ....: T  15 VOLUME  11 P.  108 

2  Official journal  NO. L  181 , 20/07/1996 P. 0001 

1. 

INTRODUCTION 

1.1 

Context of the report 

The financial instrument  for  the  environment,  LIFE,  is governed  by  Council 
regulation  Regulation1 (EEC)  No  1973/92  of  21  May  1992  modified  by 
Council  Regulation2  (EC)  No  1404/96  of  15 July  1996  amending  Council 
Regulation  (EEC)  No  1973/92  establishing  a  financial  instrument  for  the 
environment (LIFE). 

Articles 7(3) and  14 of the Regulation stipulate that: 

"On  the  basis  of  a  report  to  be  forwarded  by  the  Commission  before 
30 September  1997 the Council will, before  31 December  1997,  examine  the 
reference  amount  with  a view  possibly  to  revising  it,  in accordance  with  the 
procedures  laid  down  in  the  Treaty,  within  the  framework  of  the financial 
perspective and taking in account applications received" (Article 7(3)). 

"No  later  than  31 December  1998,  the  Commission  shall  submit  a  report  to 
the  European  Parliament  and  to  the  Council  on  the  implementation  of  this 
Regulation and on the use of appropriations  and shall make proposals for  any 
adjustment  to  be  made  with  a  view  to  continuing  the  action  beyond  the 
second phase..." (Article 14). 

These  two  reports  are  prepared  in  the  context  of  the  Sound  and  Efficient 
Management  (SEM  2000)  initiative,  which  calls for  systematic  evaluation  of 
all  Community  programmes  financing  various  activities  so 
the 
implications in terms of resources  are known before  decisions  are taken.  For 
the review of LIFE, since the deadlines for the two reports are relatively close 
together the Commission has decided on a stage-by-stage evaluation. 

that 

This  document  reports  on  the  implementation  of  LIFE  to  date,  outlines  the 
following  evaluation  stages  and  gives  views  on  a  possible  review  of  the 
reference  amount. 

During  discussions  of  the  Commission's  proposal  to  continue  the  LIFE 
scheme with  a second  phase  from  1996 to  1999, the  Council  and  Parliament 
discussed setting a reference  amount. 

Parliament  argued  in  favour  of  a  reference  amount  of  ECU 800 million  for 
the  period  from  1996 to  1999, while the  Council  considered  that  the  current 
. budgetary outlook made it impossible to exceed ECU 450 million. 

However,  in  view  of  the  environmental  requirements  addressed  by  the 
scheme,  the  Council  felt  that  it  should  consider  a  possible  review  of  the 
reference  amount at the end of 1997. 

This report therefore  goes beyond  simply analysing applications received,  and 
evaluates the extra financial  requirements which could arise in  1998 and  1999 

as a result of the interest  shown by Member  States in LIFE and the  legitimate 
expectations of the public or private bodies proposing projects. 

The  report  required  under  Article  14  of  the  Regulation  will  draw  on  the 
results  of  the  detailed  appraisal  ordered  by  the  Commission  from  outside 
experts, who will complete their work in June 1998. 

The  objective  of  this  detailed  appraisal  is  to  evaluate  performance  with 
implementation  of  the  scheme  and  how  efficiently  it  has  been  attaining  its 
objectives,  while  assessing  the  relevance  of  its  objectives  and  whether  the 
ideas  behind  the  scheme  remain  valid. 
It  will  point  the  way  to  any 
adjustments  to  be  made  with  a  view  to  continuing  the  scheme  in  the  next 
stage and should help to identify future  actions more clearly. 

In particular,  it will have to answer the following  questions: 

-  Has the  scheme helped  to develop  or  implement  Community  environment 

policies and legislation and, if so, how? 

-  Has  the  scheme  had  a  knock-on  effect  on  other  Community  policies  or 

instruments? 

-  Has the project  selection  procedure  succeeded  in choosing  projects  fitting 

in well with the criteria in the Regulation? 

-  Have  the  financial  resources  available  been  put  to  appropriate  use  or 

should the conditions for granting them be changed? 

-  What is the potential of the scheme in the medium to long term? 

1.2 

Description  of LIFE 

1.2.1 

The  general  purpose  of  LIFE  is  to  help  develop  and  implement 
Community  environment  policy  and  legislation  (Article  1  of  the 
LIFE  Regulation)  by  co-financing  specific  actions  in  the  eligible 
areas of activity. 

1.2.2 

The eligible areas of activity are: 

nature conservation actions (LIFE-Nature) 

demonstration  actions 
authorities (LIFE-Environment) 

involving 

industries  and 

local 

third 

countries 

the 
cooperation  with 
Mediterranean  and  the  Baltic  Sea,  other  than  the  countries 
of  Central  and  Eastern  Europe  which  have  signed 
association  agreements  with  the  European  Union  (LIFE-
Third countries). 

bordering 

The LIFE Regulation  specifies  that  92% of the  resources  shall  be 
allocated  to  actions  on  Community  territory,  half  of  them  for 

- 5-

1.2.3 

1.2.4 

nature  conservation,  5%  for  third  country  actions  and  3%  for 
accompanying measures. 

Since  1992,  LIFE  has  attracted  close  to  6 500  proposals  for 
projects,  of  which  almost  a  third  were  eligible.  Approximately 
half of  the  eligible  proposals  were  granted  co-financing  totalling 
ECU 542 million.  Some 750 projects are in progress. 

Beginning in  1996, three information packages were prepared for 
LIFE-Nature,  LIFE-Environment  and  LIFE-Third  countries. 
From  past  experience  it  was  possible  to  define  the  scope  of  the 
instrument more precisely.  At the same time, the package and the 
information  meetings  for  potential  proposers  have  helped  to 
improve both the technical and financial quality of the projects. 

1.2.5 

Applications  are evaluated according to the specific  nature of the 
area of activities. 

In  the  case  of. LIFE-Nature,  with  the  help  of  outside  scientific 
consultants,  the  Commission  makes  an  initial  selection  of 
applications  officially  acceptable  and  eligible  according  to  the 
criteria in the Regulation.  Then, in the Habitat Committee,  it puts 
forward  a  list  of  the  best  projects  at  Community  level  for  the 
opinion of the Member States. 

In the case of LIFE-Environment,  a parallel  evaluation procedure 
is  conducted  in  the  Member  States  and  by  the  Commission. 
Bilateral  discussions  are  held  to  agree  on  a  shortlist  of  projects 
which are then examined by panels of independent experts. On the 
basis  of  this  three-fold  evaluation  procedure,  the  Commission 
submits  a list  of projects  to  be funded  to  the LIFE Management 
Committee, consisting of representatives from the Member States, 
for its opinion. 

In the  case  of LIFE-Third  countries,  the  evaluation  procedure  is 
similar to that for LIFE-Environment  except  that the independent 
experts evaluate  all the  proposals  considered  officially  eligible by 
the Commission. 

2.  LIFE -  NATURE 

2.1 

Projects received and  co-financed 

Between  1992 and 1997, the Commission received  1 308 applications for co-
financing  under LIFE-Nature for a total  of ECU  1  328 million.  The  financial 
resources  available  made  it  possible  to  co-finance  299  projects  totalling 
ECU 239.5 million. The table below gives a year-by-year breakdown. 

Table N° 1 

LIFE  I 

LIFE  II 

92 

93 

94 

95 

96 

97 

(EUR 12) 

(EUR 12) 

(EUR 12) 

(EUR  15) 

(EUR  15) 

(EUR 15) 

1. Number of projects received 

2. Contribution requested (in 
ECU million) 
3. Number of projects eligible 

4. Eligible contribution (in ECU 
million) 

5. Number of projects financed 

6. Financial contribution granted 
(in ECU million) 

86 

227 

-. 

-. 

35 

36.9 

198 

294 

80 

1863 

22 

296 

270 

116 

153 

47 

313 

235 

139 

139 

72 

241 

174 

123 

93 

63 

174 

128 

97 

76 

60 

20.6 

47.7 

48.5 

43.4 

42.4 

(The amounts have been rounded off to millions of ECU and account only for 
the proportion co-financed by the Community, generally between 50 and 75% 
of the total cost.) 

Some  information  on the context in which decisions  are taken is required in 
order to interpret these  figures: 

•  Some  projects  are  the  second  phase  of  a  project  already  in  progress. 
Others  involve  several  beneficiaries  operating  in  various  regions  or 
Member States. 

•  In  1995,  the  new  information  package  was  tailored  to  types  of  action 
specific  to nature projects, with applicants being asked to  target  and plan 
their proposed actions more precisely.  In the short term (1995-1996), tliis 
need  for  greater  precision  meant  that  more  projects  were  then  ruled 
unacceptable or ineligible.  However,  1997  saw a marked improvement in 
the average quality of applications. 

•  In  1996, LIFE II introduced much closer linkage with the implementation 
of  the Natura  2000  network  of  sites.  Prior  entry  on  the  national  Natura 
20004  list  became  compulsory  in  1996  for  projects  connected  with these 

3 

Including ECU 61 million for one single project. 

4 Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna 

and flora 

Official journal NO. L 206 , 22/07/1992 P. 0007 - 0050 
Finnish special edition/ 
Swedish special edition...: Chapter 15 Volume IIP.  114 

....: Chapter 15 Volume IIP.  114 

The aim of this Directive shall be to contribute towards ensuring bio-diversity through the conservation of 
natural habitats and of wild fauna and flora in the European territory of the Member States to which 
the  Treaty  applies(Article  2.1).  A  coherent  European  ecological  network  of  special  areas  of 
conservation shall be set up under the title Natura 2000. This network, composed of sites hosting the 
natural habitat types listed in Annex I and habitats of the species listed in Annex II of the regulation, 

this 

Because  of 

linkage  between  LIFE-Nature  and 

sites. 
the 
implementation  of  Community  legislation,  many  applications  were  ruled 
ineligible  in  1996  and  1997. 
It  also  meant  that  potential  applicants 
refrained  from  submitting  applications  concerning  sites  not  yet  proposed 
to the Member States. 

•  In  1997,  projects  had  to  be  sent  to  the  Commission  before  the  end  of 
January,  scarcely  three  months  after  the  end  of  the  1996  selection 
procedure,  which  had  been  delayed  because  of  the  late  adoption  of  the 
LIFE  II Regulation.  This telescoping  of the two  rounds  had  the  effect  of 
reducing the number of projects  submitted. 

•  The average contribution per project  in  1996 and  1997 was in the order of 
ECU  700  000,  with  contributions  usually  ranging  from  ECU  100  000  to 
ECU 2 000 000. 

2.2 

Financial  management 

During  the  period  from  1992 to  1997,  100% of the  appropriations  allocated 
were  committed.  This high utilisation rate is due to the careful  monitoring  of 
projects by the Commission. 

Only  a  third  of  the  projects  were  co-financed  for  the  amount  originally 
requested  by the  applicant.  Instead  the  Commission  examines  each  proposal 
shortlisted  to  see which  measures  could  be co-financed  by  other  Community 
funds  (EAGGF,  ERDF,  Cohesion  Fund,  etc.)  or  are  not  essential  to  the 
success of nature conservation  work. 

The  principal  problems  encountered  with  implementation  of the budget  have 
been  delays  in implementation  of the project  by the  recipients  and,  to  a very 
small  extent,  submission  of  ineligible  expenditure  on  completion  of  the 
project.  Less than  1% of the commitments have been cancelled. 

2.3 

Geographical  distribution  of  projects 

LIFE-Nature  is  a  Community  instrument  with  no  provision  for  fixed 
percentage  shares for each Member State. 

It  therefore  makes  little  sense  to  have  an  annual  breakdown  of  funds  by 
Member  State.  However,  an analysis over  a longer  period  is more revealing. 
Certain  conclusions can be drawn for the period  1992-1997: 

•  LIFE-Nature  primarily  benefited  those  regions  and  Member  States 
the  greatest  number  of  natural  habitats  and  species  of 

with 
Community  interest.  This is what was intended. 

shall enable the natural  habitat types and the species' habitats concerned to be maintained  or, where 
appropriate, restored at a favourable conservation status in their natural range. 

•  Although  not  its  primary  purpose,  LIFE-Nature  helped 

towards 
Community  cohesion.  Because  of their  natural  riches, the  four  Member 
States  eligible for  Cohesion  Fund  resources  benefited  from  a  level  of  co-
financing far above the Community average. 

2.4 

Types of projects co-financed  and  comments 

As the  scheme has progressed,  the type  of projects  co-financed  has  changed. 
Since  the  adoption  of  LIFE  II,  there  has  been  more  emphasis  oh  land-
related  actions.  Generally,  LIFE-Nature  has  made  it  possible  to  control 
and manage numerous areas needed to protect habitats and species. 

•  LIFE-Nature  co-financed  many  local  and  national  inventories  (in 
Greece,  Spain,  Ireland  and  Portugal)  by  way  of  preparation  for  Natura 
2000.  This type of action no longer has priority under LIFE II. 

•  There  were  very  many  bird  protection  projects.  LIFE-Nature  co-
financed  specific  action to conserve  18 of the 23 species of bird threatened 
worldwide  which  are found  in Europe  and  contributed  to  the  designation 
of dozens of new special protection  areas under the Birds Directive. 

•  Several  projects  helped  to  stabilise  or  increase  the  population  of 
severely  endangered  species  (Hierro  giant  lizard,  bearded  vulture,  monk 
seals, etc.). 

•  Wetlands  have  been  well  represented,  and  feature  in more  than  a third 
of  the  projects.  This  priority  reflects  Member  States'  commitment  to 
fulfilling  their  obligations  under  the  Ramsar  Convention  and  the  recent 
communication  on wetlands. 

•  Many  of  the  projects  concern  agricultural  areas,  and  in  many  cases 
follow  on  from  agricultural  and  environmental  measures  taken  under 
Regulation  (EEC)  No 2078/92.  LIFE  has  made  it  possible  to  mobilise 
Community structural appropriations (e.g. for the protection  of biotopes in 
Greece). 

•  Similarly,  many  projects  have  contributed  to  preparation  and 
implementation  of the Natura 2000 network in Europe by helping to: 

-  prepare  inventories  of  the  natural  heritage  in  several  Member  States  and 

regions; 

-  prepare plans for managing future  sites in Germany, France and the United 

Kingdom using local help; 

- 

identify  management  methods  and  the  associated  costs  for  maintaining  or 
restoring sites, e.g.  moorland; 

- 

training staff in ecological  site management. 

•  Most  of  the  beneficiaries  of  co-financing  are  national,  regional  or  local 
public  bodies,  depending  on  how  the  Member  State  is  organised.  This 
emphasis  on  public  bodies  reflects  the  interest  shown  by  national 

- 9-

instrument  for 

in  this  Community 

authorities 
implementing  nature 
directives.  NGOs  are the  second  direct  beneficiaries  of LIFE-Nature  and 
in many cases are also associated  with projects  submitted by public bodies, 
either directly or because they have been made responsible for  some of the 
proposed  actions. 

LIFE-Nature is the only Community financial instrument  specifically  intended 
for nature conservation.  Between  1992 and  1997 demand was therefore  very 
high for urgent action which promised no economic benefits  in the short term 
but  could  lead  to  more  sustained  activities  in  the  context  of  other  funding 
mechanisms. 

By the end of  1997 several thousand  new sites should be on the national lists 
proposed  by Member States under the Habitats Directive.  This  should  result 
in  a  marked  increase  in  the  number  of  LIFE-Nature  proposals  in  1998  and 
1999. 

LIFE-Nature  alone  cannot  claim  to  be  the  appropriate  instrument  for 
financing the whole  of Natura 2000.  It  is designed  solely  as a catalyst.  The 
only  way  of making  a  significant  contribution  to  this  Community  network  is 
to make complementary use of other funding  mechanisms. 

LIFE-Nature  has  made  it  possible  for  local  operators  who  often  have  very 
different  interests  to  begin  to work  together  on  specific  projects  and to  raise 
public awareness, an important factor,  though often  hard to  quantify. 

3.  LIFE  -  ENVIRONMENT 

3.1 

Projects  received  and  co-financed 

Outside  the  nature  conservation  sector,  between  1992  and  1997  the 
Commission received 4 815 proposals.  Between  1993 and  1997, applications 
were received for financial support totalling ECU 5 600 million from LIFE. 

During  the  same  period,  because  of financial constraints,  LIFE  was  able  to 
co-finance  680 projects (14%) totalling some ECU 272 million (5%). 

The table below gives a year-by-year breakdown: 

- 1 0-

Table N° 2 

LIFE  I 

LIFE  II 

92 

93 

94 

95 

96 

97 

(EUR  12) 

(EUR  12) 

(EUR  12) 

(EUR  15) 

(EUR  15) 

(EUR  15) 

1. Number of projects received 

300 

1447 

1224 

729 

2. Contribution requested (in 
ECU million) 
3. Number of projects eligible 

4.  Number  of  projects  short 
listed 

5.  Contribution  requested  for 
short-listed  projects  (in  ECU 
million) 

6. Number of projects  financed 

7. Financial contribution granted 
(in ECU million) 
Difference between projects 
short-listed and financed (in 
ECU million) 

-

2 012 

about.  185 

~ 

70 

39.6 

601 

306 

79 

99 

44.7 

33.8 

653 

721 

258 

84 

160 

53.1 

30.6 

2 214 

431 

264 

84 

135 

48.1 

36.0 

601 

393 

283 

177 

90 

104 

43.3 

47.2 

514 

328 

244 

194 

81 

112 

43.6 

37.4 

(The amounts have been rounded off to millions of ECU and account  only for 
the proportion  co-financed  by the Community, generally between 30 and 50% 
of the total cost.) 

•  Between  1992 and  1995 many projects  submitted  did not  come within the 
scope  of  the  scheme  (structural  projects,  high-cost  projects,  study 
projects, etc.).  However,  after  1996, results were much more consistent. 

•  By  improving  the  legal  framework  (selection  criteria)  and  information 
given  to  potential  applicants,  with  the  help  of  the  Member  States,  it  was 
possible  to  reduce 
the  number  of  projects  which  were  officially 
unacceptable  or  ineligible  under  the  scheme.  Because  of  the  increasing 
quality  of  proposals,  both  from  industry  and  from  local  communities,  it 
was possible to short-list a large number of projects worth financing. 

•  The  average  contribution  in  1996  and  1997  was  in  the  order  of 
ECU 400 000,  with  contributions  usually  in  the  ECU  100  000  to 
ECU  1 000 000 range. 

3.2 

Financial  management 

The  percentage  utilisation  rate  of  appropriations  for  commitment  for  LIFE-
Environment  is  high  (99.93%)  because  each  year  the  draft  budget  is 
negotiated  with  future  beneficiaries  so  as  to  prevent  any  over-evaluation  of 
projects. 

innovatory  nature,  the  projects  financed  by  LIFE-
Because  of  their 
Environment  pose  certain  technical  and financial risks.  Scaling  up  industrial 
projects  from  the  laboratory  to  pilot  project  scale  sometimes  leads  to  a 

-11  -

technological  dead-end;  similarly,  forming  local  partnerships  between  local 
authorities,  associations and businesses can take longer or prove harder than 
expected. 

>  These risks give rise to: 

-  delays  in implementation  of  the  projects,  ranging from a  few  months  in 
three quarters of the cases to over a year for a quarter of the projects; to 
avoid such delays, since  1996 the Commission has been asking applicants 
for  more  detailed  forward  planning,  defining  the  timing  and  budget  for 
each task; 

- 

incomplete  or  deficient 
the 
Commission to reduce its contribution or recoup all or part of the advance 
paid; to date, funds have been recouped from 25 projects; since 1997 these 
amounts are re-used for new projects as far as possible; 

implementation  of  projects, 

forcing 

-  ten  or  so  projects  were  cancelled  by  the  beneficiaries  themselves  before 
work  started,  due  to  changes  in  economic  circumstances  between 
submission of the proposal and the Commission's decision; 

-  finally,  fraud  was  suspected  in three projects; the relevant files have been 

passed to the Fraud Prevention Unit (UCLAF). 

Since  1993  the  Commission  has  taken  measures  to  prevent  such risks: 
individual  decisions,  technical  monitoring  by  outside  teams  and  bank 
guarantees required from beneficiaries in the private sector. Moreover, before 
the final payment a technical appraisal is conducted  of the results attained by 
each project and spending on the project is audited by independent  approved 
auditors, whether the beneficiaries are from the private or public sector. 

3.3  Geographical distribution of projects 

LIFE-Environment  makes  no  provision  on  the  share-out  of  the  amount 
available between Member States.  The evaluation  procedure  is  designed  to 
select  proposals on merit only, under each particular subject heading (waste, 
water,  air,  etc.).  This  merit-based  evaluation  system  takes  account  of  the 
state  of  the  environment  in  each  Member  State  to  avoid  putting  at  a 
disadvantage less innovatory projects which may nevertheless set an example 
and have considerable local impact. 

•  During  the  first  phase,  the  main  beneficiaries  of  LIFE  were  Germany, 
France, Italy and the United Kingdom (each receiving approximately  14%) 
followed by Spain, Greece and the Netherlands (each with some 7%). 

•  There is no point giving a geographical breakdown for the first two years 
of the second phase since it would give no indication of the breakdown at 
the end of the second phase. The gap of just six months between the  1996 
and 1997 rounds created cyclical problems for some Member States. Also, 

12-

participation  in  the  scheme  by  the  new  Member  States  must  gradually 
settle down. 

3.4 

Types of projects co-financed 

The four main types of project covered by LIFE during the period from 1992 
to  1995 were: 

•  waste management  and  clean-up  of contaminated  sites  (36% and  8% of 

funding respectively); 

•  promotion of clean technologies ( 14% of funding); 

•  methods  of  detecting  pollution  and  monitoring  networks  (17%  of 

funding); 

• 

land-use planning and urban problems (21% of funding). 

The  remaining  4%  of  funds  were  allocated  for  administrative  cooperation 
schemes and environmental awareness campaigns. 

Overall,  the  level  of  funding  by  LIFE  in  1996  for  industry  and  local 
authorities  remained  similar  (ECU 18.2 million  and  ECU 19.7 million 
respectively).  On  the  other  hand,  the  proportions  varied  considerably  by 
Member State.  The highest level of funding  for industry (clean technologies 
and  recycling)  was  in Belgium,  Germany,  France,  Italy  and  Greece,  while 
funding  for  local  authorities  was  highest  in  Spain,  Denmark,  Sweden  and 
Finland. 

In the first group of countries, the majority  of LIFE beneficiaries  tend to be 
private  bodies  while  in  other  countries  beneficiaries  are  primarily  public 
bodies  responsible  for  land  use  management  schemes  involving  local 
socio-economic operators. 

Sector-by-sector analysis reveals certain trends: 

•  Industry:  LIFE has already contributed to promoting clean technologies in 

some industries with a particularly high level of pollution, notably: 

- 

- 

tanneries  (reducing  pollution  of  water  by  chromium  and  of  air  by 
solvents) 

the  paper  industry  (introducing  a  closed-circuit  water  system, 
recovering fibres, using ozone in the recycling of waste paper) 

-  surface  treatment  (solvent- and acid-free  cleaning using high-pressure 

jetsofwaterorice) 

- 

textiles industry (reduction of inked waste in textile printing). 

•  Apart  from  clean  technologies,  LIFE  has  encouraged  recycling  in  the 
following  sectors:  plastics,  household  appliances  (dismantling  used 

- 1 3-

refrigerators  without  emission  of  pollutants),  ceramics  and  metallurgy 
(recycling of foundry  moulding sand). 

the  main  problems  are  the  management  of  water 
Local  authorities: 
(improving  monitoring  systems,  detecting  micropollutants),  waste  and  air 
quality,  although  there  have  been  a  large  number  of  projects  on  the 
management  of  urban  areas  (traffic  management  systems,  non-polluting 
means  of  transport)  and  suburban  areas  (taking  account  of  agriculture 
when organising suburban land use). 

In  1996 most of the preparatory measures concerned  rational  management 
of coastal zones, as provided for in the demonstration  programme  decided 
by  the  Council.  In  1997  few  proposals  for  preparatory  measures  were 
submitted. 

Because  of  corresponding  activities  under  other  Community  programmes 
or schemes, particularly Leader II, LIFE-Environment  supported  very  few 
projects in rural areas, apart from in France and Spain. 

4.  LIFE  -  THIRD  COUNTRIES 

Since  1996 LIFE-Third  countries covers non-Community  countries bordering  on the 
Mediterranean  and  the  Baltic  Sea,  other  than  the  countries* of  Central  and  Eastern 
Europe  which  have  signed  association  agreements  with  the  European  Community, 
which  can,  however,  now  participate  in  LIFE-Nature  and  LIFE-Environment  as  a 
pre-accession  measure  based  on  specific  agreements  with  the  countries  in  question. 
The  main  objective  of  LIFE-Third  countries  is  to  support  technical  assistance 
projects,  nature  conservation  projects  and  demonstration  projects  to  promote 
sustainable  development, 
for 
environmental protection in these countries. 

to  promote  awareness  of  the  need 

in  order 

LIFE II is different from LIFE I in two ways: 

• 

• 

the  instrument  no  longer  applies  to  Poland,  Slovenia  and  the  three  Baltic  States 
which  are now  associated  Central  and Eastern  European  countries;  on the  other 
hand,  since  1996 it  includes the West  Bank  and  the  Gaza  Strip  and,  since  1997, 
Bosnia and Herzegovina; 

it  may  cover  demonstration  projects  on  sustainable  development  and  nature 
conservation  in  addition  to  simple  technical  assistance  as  was  the  case  with 
LIFE I. 

4.1 

Projects  received and  co-financed 

Between  1992  and  1997, the  Commission  received  371  applications  for  co-
funding  under LIFE-Third  countries.  Over the  same period  80 projects  were 
If  all  the  projects 
selected  for  funding  totalling  almost  ECU 30  million. 
considered  eligible  by  evaluators  had  been  taken  into  account  more  than 
twice this number of projects could have been  financed. 

14 

The table below gives a year-by-year breakdown. 

Table No 3 

Life I 

Life II 

92 

93 

94 

95 

96 

97 

1. Number of projects 
received 

2. Number of projects eligible 

3. Contribution requested 
(ECU million) 
4. Number of projects 
financed 
5. Financial contribution 
granted (ECU million) 

65 

103 

40 

29 

82 

23 

18.4 

10.2 

10.0 

12 

3.5 

14 

4.8 

16 

5.7 

13 

6.0 

5.3 

121 

28 

9.8 

16 

4.2 

(The amounts have been rounded off to millions of ECU and account  only for 
the  proportion  co-financed  by  the  Community,  generally  between  50  and 
100% of the total cost.) 

In  1995, which  was  the  last  year  of LIFE  I,  the  total  number  of  acceptable 
projects  increased  considerably  because  of  the  information  campaign  on 
LIFE-Third  countries.  On the other hand, the number  of projects  considered 
eligible  by  the  Commission  decreased,  because  much  greater  emphasis  was 
placed on technical quality.  By the end of the year, only  16 out of 29 projects 
had  been  funded,  with  a  Community  contribution  totalling  ECU 5.7  million 
(less than  60% of the total  amount for  eligible projects,  which is a very small 
percentage). 

The  smaller  number  of  projects  accepted  in  1996  is  due to  the  fact  that  the 
new  LIFE  Regulation  was  adopted  late  leaving  a  relatively  short  period  for 
submitting projects.  The number of projects eligible and financed is similar to 
that for  1995. 

4.2 

Financial  management 

The  annual  utilisation  rate  for  the  commitment  appropriations  allocated  to 
LIFE-Third  countries is 100%. 

The principal problem with implementation  of the budget  has been the  delays 
in  implementation  of  the  projects  by  the  beneficiaries.  The  causes  include 
political  instability  in  some  of  the  countries  eligible,  administrative  and 
(licensing,  banking 
specific 
procedural  difficulties 
procedures, etc.) and weaknesses in the local contributions. 

to  each  country 

Since  1995 the Commission has been forced  to  pull out  of two  commitments 
totalling  ECU  638  000.  One  concerned  a  project  in  Croatia,  where  the 
Community  has suspended  its cooperation,  the  other  a scheme in Albania,  at 
the request of the Ministry concerned. 

15 

4.3 

Geographical  distribution of projects 

LIFE-Third  countries  covers  two  geographical  regions:  the  Mediterranean 
(15  countries  and  territories)  and  the Baltic  Sea  (since  1996  only  the  Baltic 
region of Russia, i.e. Kaliningrad and St Petersburg). 

Up  until  1995, approximately  65% of  the  funding  for  LIFE-Third  countries 
went  to  Mediterranean  countries  and  35% to  the  Baltic  region.  As  regards 
LIFE  H,  a  total  of  29  projects  have  been  fijnded,  five  of  them  in  Baltic 
Russia, sharing a total of ECU  1 934 000. 

4.4 

Types of projects co-financed  and comments 

Since  1996  the  types  of  activities  eligible  have  been  defined  more  clearly: 
technical assistance, nature conservation and demonstration activities. 

"Technical  assistance" projects  are the largest group  of applications  received, 
accounting  for  between  50  and  70%.  This  can be  explained  by  the  fact  that 
LIFE-Third  countries  is  targeted  primarily  on  national  administrations 
wishing to define their environment policies and action programmes. 

Most  of  the  "nature"  projects  are  concerned  with  conservation  and/or 
establishment of coastal or wetland habitats. 

The pilot projects, first co-funded  in  1997, cover a very wide range of fields: 
waste management  and  treatment,  use  of bicycles  in towns  and  management 
of coastal areas. 

Between  1992  and  1997  LIFE-Third  countries  has  helped  to  establish 
ECATs,  environmental  centres  for  administration  and  technology  (in  St 
Petersburg, Kaliningrad,  Tirana,  etc.), which combine the know-how  of third 
countries and the Community in developing environmental  policies in Central 
and  Eastern  Europe.  LIFE-Third  countries has also  contributed  successfully 
to  Mediterranean  Action  Plan  activities  by  funding  projects  submitted  by 
some  of  its  regional  centres  (Rempec,  Blue Plan).  Many  projects  involving 
several  countries from the  South  and the East  Mediterranean  have  also  been 
financed  under  the  Mediterranean  Environmental  Technical  Assistance 
Programme. 

The  statistics  are  encouraging  but  LIFE-Third  countries  is  much  more 
important  than  mere  statistics.  The  instrument  plays  an  essential  role  in 
promoting  awareness  of  environmental  protection  in  the  third  countries 
neighbouring  the  European  Union. 
Indeed,  their  response  and  active 
participation  is an obvious  sign of interest.  In  1996, the  scheme was  opened 
up to  the West Bank  and the  Gaza  Strip where  four  projects  were  accepted 
and  one project financed in the very first year.  In  1997 the  programme  was 
extended  to  Bosnia  and  Herzegovina  where  10  projects  were  considered 
acceptable. 

Since it  also  disseminates  and  applies results  of Community  interest  (e.g.  the 
polluter  pays  principle  and  the  precautionary  principle)  and  concentrates 

- 1 6-

primarily  on  technical  assistance,  LIFE-Third  countries  is  an  instrument  for 
bringing  the environmental  principles  and  legislation  of third  countries- closer 
into  line with  those  of the  European  Union  and  for  transferring  Community 
technology and know-how to these regions. 

5.  GENERAL  CONCLUSIONS 

The  Commission  has  launched  the  important  process  of  evaluating  LIFE,  the 
financial instrument  for  the  environment.  The  first  part  of  the  exercise  has  been 
carried  out  by  the  Commission  and  resulted  in this  report.  Evaluation  is  of  crucial 
importance given the increasingly  difficult  budget  situation.  A full  evaluation will  be 
available during the second half of 1998. 

The  Commission,  in  its  preliminary  draft  budget  for  1998,  proposed  an  increase  of 
6.8  MECU,  compared  to  1997,  to  the  annual  budget  for  LIFE.  This  gives  a  total 
budget  of  101.3  MECU.  However,  this  is  below  the  121.8 MECU  originally 
envisaged  for  1998.  Given the budgetary discipline applied, the amounts available to 
LIFE in appropriations for commitment  during the period from 1996 to  1999 will not 
reach the ECU 450  million specified  as a reference  amount in the Regulation. 

LIFE has now reached  a certain level of maturity.  Each year it attracts an average of 
around  900 project  proposals  (see  Table 4  below),  one  third  of  which  could  be 
considered  valid,  in  other  words  formally  eligible  and  worthwhile  (included  on  the 
short list).  Of these 300 or so projects,  allowing Community funding  of  180 MECU, 
only  about  half  are  accepted  for  co-financing. 
In  order  to  finance  all  the  valid 
projects,  the  financial  resources  currently  available  would  have  to  be  more  than 
doubled. 

Table No 4 

Annual averages for LIFE II ( 1996 to  1997) 

Projects  received 

Projects  considered valid 

Cost of valid projects (in ECU million) 

Projects  co-financed 

Community  contribution  (in ECU million) 

867 

321 

180 

184 

91 

This  means  that  LIFE,  the financial instrument  for  the  environment,  would  actually 
be able to use greater  resources up to and even beyond  the current  reference  amount 
of  ECU 450 million  for  the  period  from  1996  to  1999.  However,  in  the  current 
public finance situation in Europe, the Commission  considers it necessary to  submit a 
preliminary  draft  budget  permitting  virtually  no  increase  in total  appropriations  over 
the  previous  year:  As  such,  the  reference  amount  for  LIFE  will  not  be  possible  to 
attain. 

17 

ISSN 0254-1475 

COM(97) 633 final 

DOCUMENTS 

EN 

09 

Catalogue  number  :  CB-CO-97-665-EN-C 

ISBN  92-78-28412-2 

Office  for  Official  Publications of the European  Communities 

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