Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) N° 1655/2000 concerning the Financial Instrument for the Environment (LIFE)
Date: 2003-11-05
Institutions: European Commission
Subjects: EU aid, EU financial instrument, environmental protection

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 5.11.2003
COM(2003) 667 final

2003/0260 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulation (EC) N° 1655/2000 concerning the Financial Instrument for the
Environment (LIFE)

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

INTRODUCTION

In  May  1992  Council  Regulation  (EEC)  No 1973/92  establishing  a  financial  instrument  for
the environment (LIFE)1 was adopted to contribute to the implementation and development of
Community environment policy and of environmental legislation.

Subsequently  Council  Regulation  (EEC)  No  1973/92  was  substantially  amended  by
Regulation  (EC)  No 1404/962  (Life  II)  and  replaced  by  Regulation  (EC)  No  1655/20003
(Life III).

The successive modifications of the Life instrument reflect the constant adaptation to the new
policy  objectives  set in  the  Environment  Action  Programmes  applicable  at  the  time  of  each
phase.  The  scope  of  Life  III,  in  particular,  reflected  the  priorities  set  in  the  5th  Action
Programme. Its general objective was to contribute to the implementation,  development  and
enhancement of Community environmental policy and legislation. It should also contribute to
the  integration  of  the  environment  into  other  EU  policies  and  lead  to  new  solutions  for  EU
environmental problems under examination. The 6th Environment Action Programme adopted
in 2002 confirms the validity of those objectives and the role Life is to play in support of the
Programme.

Life III expires on 31 December 2004.  In  order to  verify the  efficiency and  effectiveness of
Life  III  in  achieving  its  objectives,  the  Regulation  foresees  in  its  Article  12  that,  by  30
September  2003,  an  evaluation  is  carried  out  on  its  implementation  and  if  appropriate  a
proposal is made for its continuation.

In compliance with Article 12 the Commission is submitting to the European Parliament and
the Council:

-

A Report on the progress made under Regulation (EC) No 1655/2000.

A Proposal extending the existing Regulation with a view to continuing the third phase

-
until 31 December 2006.

1.1.

The development of Community financing for environment

The  Community's  financial  contribution  in  the  field  of  the  environment  started  in  the  early
1990s. Life III builds on the experience gained during the two previous phases of Life as well
as its predecessors.

The 6th Environment Action Programme  adopted in 2002  fixes priority themes  and  foresees
tangible  goals  in  various  environmental  sectors.  It  also  underlines  the  value  of  Life  as  an
instrument to support the implementation of the Programme.

1

2

3

OJ L 206, 22.7.1992, p. 1.
OJ L 181, 20.7.1996, p. 1.
OJ L 192, 28.7.2000, p. 1.

2

                                                
1.2.

The specific features of Life

Life  is  the  only  instrument  entirely  devoted  to  supporting  and  developing  Community
environmental policy. Life finances projects, which test the feasibility of new processes and
methods  and  thus  contributes  to  the  “Lisbon  Strategy”  to  make  the  EU  the  most  dynamic
knowledge-based  economy  of  the  world.  LIFE  is  complementary  to  other  Community
programmes which are also supporting Community environmental policy, such as Research,
Structural fund and Rural Development programmes. In addition, LIFE will contribute to the
EU Environment Technology Action Plan. The number and diversity of the projects submitted
in recent years show that this instrument responds to a need expressed by nature conservation
managers, socio-economic operators as well as local authorities. Life is a flexible instrument
and presents fewer constraints in terms of eligible geographical areas, identity of the recipient
or multinational partnership than other Community instruments.

2.

LIFE III

2.1.

Facts and figures

Since  1992,  almost  10,000  proposals  for  projects  have  been  received  under  Life,  of  which
more  than  one  third  were  eligible.  A  total  of  2.192  proposals  (of  which  623  under  Life  III)
were co-financed for the total amount of some 1.226 million Euro (of which  579  M€  under
Life III). Approximately 850 projects are currently in progress.

The  Life  III  Programme  is  based  on  a  three  pillar  approach:  Life-Nature,  Life-Environment
and Life-Third Countries.

-  The  Life-Nature  component  -  although  relatively  small  -  has  been  the  only  EU  financial
instrument  that  has  been  directed  specifically  to  nature  conservation.  Life-Nature  projects
target either birds on Natura 2000 sites (18%), or habitats within Natura 2000 sites (74%) or
species outside Natura 2000 sites (8%)4. By the end of 2001, ten per cent of the almost 18,000
proposed Natura 2000 sites had been the  subject of  a Life-Nature project. Coverage  by Life
projects  has  been  relatively  large  and  sufficiently  significant  to  contribute  to  stemming  the
decline in bio-diversity throughout the European Union.

-  The  main  characteristic  of  Life-Environment  projects  is  its  potential  for  demonstration  of
new methods, techniques and schemes paving the way for the implementation of existing EU
policies  in  the  different  environmental  fields  or  for  the  future  development  of  policy.  The
breakdown by topic of the projects financed under Life-Environment between 2002 and 2003
reveals  a  uniform  allocation  of  resources  amongst  the  broad  project  topics  “urban  &
planning”,  “water”,  “clean  technologies”,  “waste”  and  “products”.  The  two  topics  with  the
highest  share  of  funding  are  waste  and  products.  They  account  for  23%  and  22%  of  the
expenditure respectively.

- Life-Third Country covers projects in countries bordering the Mediterranean and Baltic seas.
These projects target capacity building in various environmental sectors. They fall largely into
three groups: pollution (23%), bio-diversity (20%) and waste (11%). The most frequent type
of  projects  are  those  covering  general  environmental  management  structure  (23%).  This

4

The figures refer to projects co-financed between 1998 and 2001 inclusive

3

                                                
includes general support to structures responsible for  environmental management. A closely
related category of projects focuses on specific environmental tools, such as Eco-management
and EMAS.

Life  III  strongly  emphasises  the  importance  of  communication  as  a  means  to  improve
Community legislation in the environmental area or of transfer of the results of Life projects
to other policy areas, such as energy, agriculture and transport. In order to meet the statutory
requirements, a new Life Communication Strategy was launched in March 2002. Since then a
very wide range of communication actions has been covered with a substantial improvement
in the dissemination of the Life Programme and its projects.

2.2.

Management

In 2001 the administrative and financial management of Life was restructured and centralised.
This  has  made  its  management  more  transparent  as  well  as  efficient  and  effective.  The  re-
organisation  of  the  financial  management  has  led  to  significant  improvements  in  terms  of
budgetary execution and financial risk management. All key indicators show that the financial
management of Life is sound.

2.3.

Mid-term evaluation

As  foreseen  in  Article  12  a  mid-term  evaluation  has  been  carried  out.  It  is  based  on  an
external  evaluation  launched  by  an  independent  evaluator  and  on  the  data  and  experience
gained by the Commission over the past seven years. The objective of the external evaluation
was  to  assess  the  contribution  of  the  Life-Programme  to  the  implementation,  updating  and
development of environmental policy and legislation.

The  evaluation  concludes  that  there  is  evidence  that  the  Programme  contributes  to  the
implementation  of  policy  and  that  it  is  managed  effectively.  The  evaluation  also  indicates
that:

-  Life-Nature  should  continue  to  have  a  significant  role  in  driving  the  implementation  of
Natura 2000.

- There is only limited evidence that Life-Environment is supporting preparatory actions, but
there is good evidence that it has demonstrated a variety of clean technologies in key areas.

-  Finally,  Life-Third  Country  projects  are  contributing  significantly 
environmental capacity in third countries.

to  developing

On the basis of the external evaluation and internal findings, it is possible to conclude that:

- Life is a useful instrument that should be continued.

-  The  improvements  in  the  organisation  and  management  of  the  Programme  should  be
maintained and continued.

- Life should be fully exploited within the scope of the 6th Environmental Action Programme.

- The dissemination of results should be improved.

4

3.

THE NEW HORIZON

Since  the  entry  into  force  of  Life  III  Community  environment  policy  as  well  as  the  general
political  context  have  progressed  significantly.  The  Gothenburg  Conclusions  on  sustainable
development of 2001 set a long-term strategy dovetailing policies for economically, socially
and  ecologically  sustainable  development.  This  strategy  has  to  be  seen  together  with  the
“Lisbon  Strategy”  aimed  at  making  the  European  Union  the  most  competitive  and  dynamic
knowledge-based economy in the world. The successful conclusion of the World Summit on
Sustainable Development of 2002 in Johannesburg demonstrated the leading role that the EU
plays  in  the  pursuit  of  the  external  dimension  of  sustainable  development.  The  6th
Environment Action Programme fits into  these frameworks  and  highlights  the  role  that  Life
can play to support its implementation in developing a knowledge based approach.

The Commission is currently preparing the post-2006 financial perspectives. The continuation
of the Life-Programme will therefore need to be viewed in this context.

In addition there are major new developments in certain relevant policy areas that should be
taken into account:

- Nature conservation has experienced a significant acceleration, namely in the set-up of the
NATURA  2000  network.  A  working  group  was  set  up  to  analyse  the  financial  needs  for
managing this network with particular reference to Article 8 of the Habitats Directive. In its
final report the group stressed the need for EU financing for the implementation of NATURA
2000  and  supported  the  strengthening  of  Life  to  cover  some  of  these  needs.  Following
designation of sites, there is now a need to support the active management of the network by
national and regional authorities.

- The precise manner in which existing financial instruments will be able to contribute to this
exercise  will  depend  on  the  new  financial  perspectives.  This  argues  in  favour  of  a
continuation of Life support to the set-up and management of the network in order to facilitate
investment programmes under the new financial perspectives.

- The evaluation of Life III has shown that there is a need for Life projects to be more closely
tied  into  policy  implementation.  At  present,  with  the  exception  of  the  NATURA  projects,
insufficient attention is paid to using Life as a means to implement policies.

-  Clean  and  more  resource  efficient  technologies  can  contribute  to  sustainable  development
and a high standard of environmental protection. It can act as a driving force for innovation,
development of new business, job creation and growth. This would greatly contribute to both
the sustainable development strategy and the Lisbon Strategy. Life-Environment projects have
the potential to contribute to this goal. However, there is a need to better focus the fields of
intervention  and  avoid  dispersing  the  limited  resources.  This  can  be  done  through  an
adaptation of the guidelines.

-  With  reference  to  the  Third-Country  component,  recent  experience  in  international
negotiations  and  discussions  (World  Summit  on  Sustainable  Development,  climate  change,
bio-diversity etc) has shown that there is a need to support third countries in developing their
environment policy and management capacities.

-  Although  the  Life  III  management  has  been  restructured,  procedures  should  still  be
simplified in order to further streamline administrative and financial management.

5

- Since 2003 a new financial Regulation has been in place with which all financial instruments
must comply.

- The Court of Justice in a Judgment of January 2003 annulled Article 11(2) of the existing
Regulation  and  requested  the  Council  to  adopt  new  provisions  concerning  the  committee
procedure to which the measures for the implementation of that Regulation are subject.

4.

BRIDGING THE GAP

In  view  of  the  mid-term  evaluation  results  and  recommendations  and  in  line  with  the  new
policy context there is  a  need  to  extend  the  existing  instrument.  This  will  ensure  continuity
until  a  new  approach  is  developed  in  view  of  the  new  post-2006  financial  perspectives.  An
extension of the existing Regulation should avoid a legal gap between the end of the LIFE III
phase  on  31  December  2004  and  the  introduction  of  the  new  financial  perspectives.  The
extension should therefore cover 2  years until 31 December 2006.  In addition the  extension
should include the following modifications to the existing Regulation:

- the Regulation should be fully aligned to the provisions of the new Financial Regulation;

-  considering  that  the  6th  Environment  Action  Program  has  been  adopted  in  2002,  the
guidelines that define the priority areas for Life-Environment demonstration projects will be
revised  to  clearly  link  them  with  the  priorities  set  in  the  Program  and  the  actions  to  be
proposed in the EU Environmental Technology Action Plan. ETAP which is currently under
preparation;

-  the  complementarity  of  Life  with  Research,  Structural  Fund  and  Rural  Development
Programmes needs to be properly reflected in the regulation;

- the committee procedure to which the implementation measures of the Life Regulation are
subject  is  modified  to  take  account  of  the  judgement  issued  by  the  Court  of  Justice  in
January 2003;

- the proposed amount for a two year extension of Life amounts to 317.2 million Euro; this is
coherent  with  the  present  financial  perspectives  and  takes  into  consideration  the  effect  of
enlargement;

-  a  limited  increase  is  proposed  for  accompanying  measures  from  5  to  6%  of  the  budget  to
allow for a further improvement in the dissemination and monitoring activities;

- an ex-post evaluation of the LIFE programme is proposed in 2006;

-  a  special  scheme  is  introduced  to  allow  for  the  continuation  of  monitoring  activities  of
projects still active after 2006.

The geographical scope of LIFE, as defined in Regulation (EC) 1655/2000, is not modified in
the  proposal  for  a  two  years  extension  of  LIFE  III.  However,  in  view  of  Communication
C/2003/0104  “Wider  Europe  –  Neighbourhood:  A  New  Framework  for  Relations  with  our
Eastern  and  Southern  Neighbours”,  which  was  adopted  by  the  Commission  on  11  March
2003, a participation of Ukraine, Moldova and Belarus should be considered afterwards.

6

2003/0260 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulation (EC) N° 1655/2000 concerning the Financial Instrument for the
Environment (LIFE)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular
Article 175(1) thereof,

Having regard to the Proposal from the Commission5,

Having regard to the Opinion of the European Economic and Social Committee6,

Having regard to the Opinion of the Committee of the Regions7,

Acting in accordance with the procedure laid down in Article 251 of the Treaty8

Whereas

(1)

(2)

(3)

5

6

7

8

9

10

The financial instrument for the environment, LIFE, as established by Regulation (EC)
No 1655/2000 of the European Parliament and of the Council9, is being implemented
in phases of which the third phase will end on 31 December 2004.

Given  the  positive  contribution  of  LIFE  to  the  attainment  of  the  objectives  of
Community policy of the environment and with a view to further contributing to the
implementation, updating and development of Community environment policy and of
environment legislation, in particular as regards the integration of the environment into
other policies, and to sustainable development, the duration of the third phase should
be extended until 31 December 2006.

A  Sixth  Environmental  Action  Programme  was  adopted  in  2002  by  Decision  No
1600/2002/EC  of  the  European  Parliament  and  of  the  Council10.  It  is  necessary  to
adapt Regulation (EC) No 1655/2000 to the objectives and priorities laid down in that
Programme.

OJ C
OJ C
Opinion delivered on.

OJ L 192, 28.7.2000, p.1.
OJ L 242, 10.9.2002, p.1.

7

                                                
(4)

(5)

(6)

(7)

(8)

There is a need to bridge the gap between the expiry of the third phase of LIFE and the
new,  post-2006  financial  perspectives,  for  a  period  of  two  years  ending  on  31
December 2006;

LIFE  should  be  reinforced  as  a  specific  financial  instrument,  complementary  to  the
Community Research Programmes and to the Structural Fund and Rural Development
Programmes.

Communication  C/2003/0131  “Developing  an  action  plan  for  environmental
technology” was adopted by the Commission on 25 March 2003. This Communication
will be followed by an Environmental Technology Action Plan, which should serve as
a reference for the guidelines for LIFE Environment.

From 2004 ten new Member States will  join the  European Union and this should be
reflected accordingly in the budget allocation to LIFE.

The  exploitation  and  dissemination  of  results  should  be  improved  and  the  budget
allocation for that purpose should be increased.

(9)

Projects still active at the end of 2006 should continue to be monitored and audited.

(10)

(11)

(12)

(13)

In  its  judgment  of  21  January  200311  the  Court  of  Justice  of  the  European
Communities  annulled  Article  11(2)  of  Regulation  (EC)  No  1655/2000.  The  Court
declared that "the effects of Article 11(2) of Regulation (EC) No 1655/2000 are to be
fully maintained until the Parliament and the Council adopt new provisions concerning
the  committee  procedure  to  which  the  measures  for  the  implementation  of  that
Regulation are subject".

In  accordance  with  Article  233  of  the  Treaty,  the  institutions  whose  act  has  been
declared  void  are  required  to  take  the  necessary  measures  to  comply  with  the
judgement of the Court of Justice.

The  measures  that  the  Commission  is  empowered  to  adopt  under  the  implementing
powers conferred on it by the present Regulation are management measures relating to
the implementation of a programme with substantial budgetary implications within the
meaning  of  Article  2(a)  of  Council  Decision  1999/468/EC  of  28 June 1999  laying
down  the  procedures  for  the  exercise  of  implementing  powers  conferred  on  the
Commission12.  Those  measures  should  therefore  be  adopted  in  accordance  with  the
management procedure provided for in Article 4 of that Decision.

This  act  establishes  a  financial  framework  for  the  entire  duration  of  the  programme
which is to be the principal point of reference for the budgetary authority, within the
meaning of point 33 of the Inter-institutional Agreement of 6 May 1999 between the
European  Parliament,  the  Council  and  the  Commission  on  budgetary  discipline  and
improvement of the budgetary procedure.

11

12

Commission v the European Parliament and Council, Case C-378/00, (2003) ECR p. I-937.
OJ L 184, 17.7.1999, p. 23.

8

                                                
HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) N° 1655/2000 is amended as follows:

(1) Article 3 is amended as follows:

(a) In paragraph 3 point (a) is replaced by the following:

“(a) 50  % for nature  conservation  projects,  100%  of  eligible  costs  excluding  overheads  and
durable goods for accompanying measures pursuant to paragraph 2(b)(i) and (ii) and 100 % of
costs for accompanying measures pursuant to paragraph 2(b)(iii);”

(b) In paragraph 7 the second subparagraph is replaced by the following:

“In accordance with Article 116 of the Regulation 1605/2002 of the Council, a decision shall
be  adopted  by  the  Commission  on  the  projects  which  have  been  accepted  and  grant
agreements  shall  be  concluded  with  the  beneficiaries  laying  down  the  amount  of  financial
assistance, the financial procedures and controls, and the specific technical conditions of the
project approved.”

(c) Paragraph 8 is replaced by the following:

“8. At the Commission's initiative:

(a) accompanying measures to  be  financed pursuant to paragraph 2(b)(i) and (ii)  shall, after
consultation of the committee mentioned in Article 21 of Directive 92/43/EEC, be the subject
of calls for proposal. Member States may submit proposals on accompanying measures to the
Commission.

(b) accompanying measures to be financed pursuant to paragraph 2(b)(iii) shall be the subject
of  calls  for  tender.  All  calls  for  tender  shall  be  published  in  the  Official  Journal  of  the
European Union where the specific criteria to be met will be set out.”

(2) Article 4 is amended as follows:

(a) In paragraph 3 the last subparagraph is replaced by the following:

“The  rate  of  Community  financial  support  shall  be  100%  of  eligible  costs  excluding
overheads  and  durable  goods  for  accompanying  measures  pursuant  to  paragraph  2(c)(i)  and
100 % of costs for accompanying measures pursuant to paragraph 2(c)(ii).”

(b) Paragraph 4 is replaced by the following:

“4. As far  as  demonstration  projects  referred  to  in  paragraph  2(a)  are  concerned,  guidelines
shall  be  established  by  the  Commission,  in  accordance  with  the  procedure  referred  to  in
Article 11(2), and published in the Official Journal of the European Union.

These  guidelines  shall  indicate  the  priority  areas  and  objectives  for  demonstration  projects
with an explicit reference to the priorities set out in Decision No 1600/2002/EC.

9

The  guidelines  shall  ensure  that  LIFE-Environment  is  complementary  to  the  Community
Research Programmes and to the Structural Funds and Rural Development Programmes.”

(c) Paragraph 8 is replaced by the following:

“8. At the Commission's initiative:

(a)  Projects  to  be  financed  pursuant  to  paragraph  2(b)  and  accompanying  measures  to  be
financed pursuant to paragraph 2(c)(i) shall, after consultation of the committee mentioned in
Article 11(1), be the subject of  calls  for proposal.  Member States may  submit proposals for
projects to be financed pursuant to paragraph 2(b) to the Commission;

(b) accompanying measures to be financed pursuant to paragraph 2(c)(ii) shall be the subject
of  calls  for  tender.  All  calls  for  tender  shall  be  published  in  the  Official  Journal  of  the
European Union where the specific criteria to be met will be set out.”

(d) Paragraph 11 is replaced by the following:

“11. In accordance with Article 116 of the Regulation 1605/2002 of the Council, a decision
shall  be  adopted  by  the  Commission  on  the  projects  which  have  been  accepted  and  grant
agreements  shall  be  concluded  with  the  beneficiaries  laying  down  the  amount  of  financial
assistance, the financial procedures and controls, and the specific technical conditions of the
project approved.”

(3) In Article 5 paragraph 9 is replaced by the following:

“At the Commission's initiative, accompanying measures to be financed under paragraph 2(b)
shall be the subject of calls for tender published in the Official Journal of the European Union
and setting out the specific criteria to be met.”

(4) Article 8 is amended as follows:

(a) In paragraph 1 the following subparagraph is added:

“The third phase is extended by two years until 31 December 2006. The financial framework
for the implementation of the extended phase in the period 2005/2006 is hereby set at  EUR
317.2 million. In the case LIFE were to be discontinued after this phase and in order to ensure
the  monitoring  and  auditing  of  projects  still  active  at  the  end  of  2006,  appropriations  for
projects and for accompanying measures shall continue until 31 December 2010.”

(b) In paragraph 3 the second subparagraph is replaced by the following:

“For the period 1 January 2005 to 31 December 2006, the accompanying measures shall be
limited to 6 % of the available appropriations.”

(5) Article 11(2) is replaced by the following:

“2.  Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision  1999/468/EC
shall 
thereof.
the 
The period referred to in Article 4(3) of Decision 1999/468/EC shall be set at three months.”

of  Article 

provisions 

having 

regard 

apply, 

to 

8 

10

(6) Article 12 is replaced by the following:

“Not later than 30 September 2006, the Commission shall submit to the European Parliament
and  the  Council  a  report  on  the  implementation  of  this  Regulation,  its  contribution  to  the
development of Community environmental policy, and the use made of the appropriations.”

Article 2

This Regulation shall enter into force on the third day following that of its publication in the
Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at

For the European Parliament
The President

For the Council
The President

11

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Environment

Activit(y/ies): Programme and Projects

TITLE OF ACTION: LIFE FINANCIAL INSTRUMENT FOR THE ENVIRONMENT

1.

BUDGET LINE(S) + HEADING(S)

ABB

Old Budget
Line

07010402

B4-3200A

07010403

B4-3201A

07010405

B7-810A

070202

B7-810

070303

B4-3200

070304

B4-3201

Budget line heading

LIFE (Financial Instrument for the Environment — 2005 to
2010) — Projects on Community territory — Part I (nature
protection) — Expenditure on administrative management
LIFE (Financial Instrument for the Environment — 2005 to
2010) — Projects on Community territory — Part II
(Environmental protection) — Expenditure on administrative
management
LIFE (European Financial Instrument for the Environment —
2005 to 2010 ) — Operations outside Community territory —
Expenditure on administrative management
LIFE (European Financial Instrument for the Environment —
2005 to 2006) — Operations outside Community territory
LIFE (Financial Instrument for the Environment — 2005 to
2006) — Projects on Community territory — Part I (nature
protection)
LIFE III (Financial Instrument for the Environment — 2005 to
2006) — Projects on Community territory — Part II
(environmental protection)

2.

OVERALL FIGURES

2.1.

Total allocation for action (Part B):

284,882 € million for commitment

2.2.

Period of application: 2005-2006

2005-2006

2.3.

Overall multiannual estimate of expenditure:

(a)

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1)

(financial

12

€ million (to three decimal places)

Year
2005

2006

2007

2008

2009

2010

Total

Commitments

142,504

142,378

0

0

0

0

284,882

Payments

57,002

56,951

42,751

42,713

42,751

42,713

284,882

(b)

Technical and administrative assistance and support expenditure (see point 6.1.2)

Commitments

7,496

7,622

6,029

4,648

3,218

3,270

Payments

7,496

7,622

6,029

4,648

3,218

3,270

32,283

32,283

Subtotal a+b

Commitments

150,000

150,000

6,029

4,648

3,218

3,270

317,165

Payments

64,498

64,573

48,780

47,361

45,96
9

45,983

317,165

(c)

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure
(see points 7.2 and 7.3)

Commitments/Payments

3,373

3,428

3,057

2,362

1,280

1,301

14,801

Subtotal a+b+c

Commitments

153,373

153,428

9,086

7,010

4,498

4,571

331,966

Payments

67,871

68,001

51,837

49,723

47,249

47,284

331,966

2.4

Compatibility with financial programming and financial perspective

[X] Proposal is compatible with existing financial programming.

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial
perspective.

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional
Agreement.

2.5.

Financial impact on revenue:

Proposal  has  no  financial  implications  (involves  technical  aspects  regarding
implementation of a measure)

[ ]

OR

[ ]

Proposal has financial impact – the effect on revenue is as follows:

13

 
Prior to
action
[Year n-1]

(€ million to one decimal place)

Situation following action

2005 2006 [n+2] [n+3] [n+4] [n+5]

Budget
line

Revenue

Revenue 

a) 
absolute terms

in

b) Change in revenue  (cid:1)

Any  revenue  from  contributions  of  candidate  countries  for  participation  in  the
Community  programmes,  entered  in  Item  6 0 9 1  of  the  statement  of  revenue,  may
give rise to the provision of additional appropriations.

3.

BUDGET CHARACTERISTICS

Type of expenditure

New

EFTA
contribution

Contributions
form applicant
countries

Heading in
financial
perspective

DNO

CD

NO

NO

YES

3 Internal Politics

4.

LEGAL BASIS

Article 175 of the Treaty

5.

DESCRIPTION AND GROUNDS

5.1.

Need for Community intervention

5.1.1. Objectives pursued

The financial instrument Life should contribute to the development  of  Community  policy in
the field of the environment, in particular in integrating the environment in the other policies
and the implementation and updating of environmental legislation. It should enhance cohesion
in the behaviour of the Member States  with  regard to environmental problems and  ensure  a
better balance between environmental policy and other Community policies.

5.1.2. Measures taken in connection with ex ante evaluation

Considering that the proposal refers to an extension of an existing financial programme no ex-
ante evaluation is foreseen.

5.1.3. Measures taken following ex post evaluation

As  foreseen  in  Article  12  a  mid-term  evaluation  has  been  carried  out.  It  is  based  on  an
external  evaluation  launched  by  an  independent  evaluator  and  on  the  data  and  experience
gained by the Commission over the past seven years. The objective of the external evaluation

14

was  to  assess  the  contribution  of  the  Life-Programme  to  the  implementation,  updating  and
development of environmental policy and legislation.

The  evaluation  concludes  that  there  is  evidence  that  the  Programme  contributes  to  the
implementation  of  policy  and  that  it  is  managed  effectively.  The  evaluation  also  indicates
that:

-  Life-Nature  should  continue  to  have  a  significant  role  in  driving  the  implementation  of
Natura 2000.

- There is only limited evidence that Life-Environment is supporting preparatory actions, but
there is good evidence that it has demonstrated a variety of clean technologies in key areas.

-  Finally,  Life-Third  Country  projects  are  contributing  significantly 
environmental capacity in third countries.

to  developing

On the basis of the external evaluation and internal findings, it is possible to conclude that:

- Life is a useful instrument that should be continued.

-  The  improvements  in  the  organisation  and  management  of  the  Programme  should  be
maintained and continued.

- Life should be fully exploited within the scope of the 6th Environmental Action Programme.

- The dissemination of results should be improved.

- The following modifications are thus proposed to the existing regulation:

the  Regulation  should  be  fully  aligned  to  the  provisions  of  the  new  Financial

-
Regulation;

considering  that  the  6th  Environment  Action  Program  has  been  adopted  in  2002,  the
-
guidelines that define the priority areas for Life-Environment demonstration projects will be
revised to clearly link them with the priorities set in the Program and the actions proposed in
the EU Environmental action programme ETAP which is currently under preparation;

the  complementarity  of  Life  with  Research,  Structural  Fund  and  Rural  Development

-
Programmes needs to be properly reflected in the regulation;

-
the committee procedure to which the implementation measures of the Life Regulation
are  subject  is  modified  to  take  account  of  the  judgement  issued  by  the  Court  of  Justice  in
January 2003;

-
the proposed amount for a two year extension of Life amounts to 317.2 million Euro;
this is coherent with the present financial perspectives and takes into consideration the effect
of enlargement;

a limited increase is proposed for accompanying measures from 5 to 6% of the budget

-
to allow for a further improvement in the dissemination and monitoring activities;

a special scheme is introduced to allow for the continuation of monitoring activities of

-
projects still active after 2006.

15

5.2.

Action envisaged and budget intervention arrangements

5.2.1.

LIFE Nature

Foreseen activities are nature conservation projects which contribute to the implementation of
Council  Directive  79/409/EEC  of  2/4/79  on  the  conservation  of  wild  birds  and  Council
Directive 92/43/EEC of 21/5/92 on the conservation of natural habitats and of wild flora and
fauna and in particular the establishment of the European network Natura 2000, aiming at on-
site  management  of  the  most  valuable  fauna  and  flora  species  and  habitats  of  the  Union.
Projects  will  contribute  to  maintaining  or  restoring  natural  habitats  and/or  populations  to  a
favourable conservation status.

Subsidies to projects are granted at  the rate  of 50% of  the total cost of the project. Projects
concerning  priority  natural  habitats  and  priority  species  as  per  Directive  92/43/EEC,  or
specific species of birds considered as priority for LIFE funding according to the committee
(set up pursuant to article 16 of the Directive 79/409/EEC) may be funded at a higher rate up
to a maximum of 75% of the total project cost.

Calls  for  proposals  are  launched  and  proponents  submit  projects  via  the  relevant  national
Competent  Authority  to  the  Commission.  After  successful  evaluation  and  selection,  and  on
approval of the Habitats Committee (set up pursuant article 20 of the Directive 92/43/EEC),
grant agreements are established following a Commission decision.

The activities undertaken under the title of LIFE Nature target essentially public bodies, local
groups,  NGO’s  or  associations  grouping  several  categories  of  partners,  managing  and/or
restoring natural areas.

5.2.2.

LIFE Environment

The  activities  foreseen  under  the  LIFE  Regulation  are  to  co-finance  projects  of  a
demonstration nature which:

-  Integrate  environmental  considerations  and  sustainable  development 
development and planning, including the urban and coastal areas.

in 

land-use

- Promote the sustainable management of groundwater and surface water.

- Minimise the environmental impact of economic activity, notable through the development
of clean technologies and by placing the emphasis on prevention, including the reduction of
emission of gases having a greenhouse effect.

- Prevent, reuse, recover and recycle wastes of all kinds and ensure the sound management of
waste streams.

-  To  reduce  the  environmental  impact  of  products  through  an  integrated  approach  to
production,  distribution,  consumption  and  end-of-lifetime  handling, 
the
development of environmentally-friendly products.

including 

Demonstration  projects  must  set  out  to  test  an  innovative  solution  to  an  environmental
problem and lead to concrete, practical results. They must be implemented at a scale, which
allows evaluation of the technical and economical viability of large-scale introduction of this
solution.  However,  investments  in  major  infrastructure  are  non  funded.  These  actions  are
aimed  at  bridging  the  gap  between  research,  and  development  results,  and  their  widespread

16

implementation.  To  this  end,  demonstration  projects  based  on  the  results  of  successful
projects  supported  in  the  framework  of  past  or  ongoing  RTD  programmes  in  the  field  of
environment are particularly encouraged. 

Preparatory  projects  must  contribute  to  the  development  of  new  Community  environmental
actions and instruments, and/or to the up dating of environmental legislation and policies.

Calls  for  proposals  are  launched  and  proponents  submit  projects  via  the  relevant  national
Competent  Authority  to  the  Commission.  After  successful  evaluation  and  selection,  and  on
approval of the  LIFE Committee,  grant agreements are  established  following  a Commission
decision.

The  maximum  rate  of  Community  financial  support  is  50%  to  the  eligible  project  costs.
Where projects are « expected to generate significant income » the maximum rate of funding
is 30% of the eligible project costs.

Preparatory projects relate to projects where the Commission defines the actions to be taken,
based  on  the  type  of  assistance  required,  e.g.  a  particular  technical  analysis  or  specific
information or testing to further the objectives in the environment sector and development of
policies. Such actions will be the object as and when necessary of a call for manifestation of
interest.

The  target  population  are  industry,  commercial  companies  and  local  authorities.  The
participation of small and medium sized enterprises is particularly encouraged.

5.2.3.

LIFE Third Countries

LIFE  Third  Countries  supports  the  establishment  of  capacities  and  administrative  structures
needed  in  the  environmental  sector.  In  so  doing,  contributes  to  the  development  and
strengthening of national environmental policies and action programmes aimed at increasing
environmental  protection  in  third  countries  bordering  on  the  Mediterranean  and  the  Baltic
Sea,  other  than  the  10  Acceding  States  and  the  Candidate  Countries  who  have  signed
association agreements with the European Union.

The  European  Union  and  bordering  countries  acting  together  to  address  environmental
problems will be far more effective than individual national actions; many such issues being
of  a  trans-national  nature  by  virtue.  Support  to  actions  promoting  co-operation  and  co-
ordination between several countries (EU and bordering countries) are particularly targeted by
the new programme. In the future this will be taken into account by including the countries of
Central and Eastern Europe not signatory to accession agreements with the EU.

Calls  for  proposals  are  launched  and  proponents  submit  projects  via  the  relevant  national
Competent  Authority  to  the  Commission.  After  successful  evaluation  and  selection,  and  on
approval of the LIFE Committee,  grant agreements are  established  following  a Commission
decision.

The maximum rate of Community financial support is 70% to the eligible project costs.

5.3.

Methods of implementation

The program will be managed directly by the Commission. Technical Assistance Offices will
support the Commission providing technical and financial expertise covering the whole life-
cycle of projects. The use of TAO increases the efficiency of the overall scheme thanks to the

17

territorial  proximity  to  projects  and  the  availability  of  technical/scientific  expertise.  Overall
administrative cost is estimated to be lower using TAO as compared to full internalisation of
the corresponding activities.

6.

FINANCIAL IMPACT

6.1.

Total financial impact on Part B - (over the entire programming period)

6.1.1.

Financial intervention

Commitments (in € million to three decimal places)

Breakdown

2005

2006

2007

2008

2009

2010

Total

Nature (070303)

67,923

67,866

0,000

0,000

0,000

0,000

135,789

Environment (070304)

67,614

67,552

0,000

0,000

0,000

0,000

135,166

Third Countries
(070202)

6,967

6,960

0,000

0,000

0,000

0,000

13,927

TOTAL

142,504

142,378

0,000

0,000

0,000

0,000

284,882

18

6.1.2.

Technical  and  administrative  assistance,  support  expenditure  and  IT
expenditure (commitment appropriations)

2005

2006

2007

2008

2009

2010

Total

1) Technical and
administrative assistance

a) Technical assistance
offices (BAT)

b) Other technical and
administrative assistance

intra muros

extra muros:

Nature MT (07010402)
Environment MT
(07010403)

Th.Countries MT
(07010405)

Nature Audits (07010402)
Environment Audits
(07010403)
Th.Countries Audits
(07010405)

2,852

2,902

2,657

2,028

1,376

1,399 13,214

3,036

3,089

2,829

2,159

1,464

1,490 14,067

0,368

0,374

0,343

0,262

0,177

0,181

1,705

0,075

0,075

0,075

0,075

0,075

0,075

0,450

0,100

0,100

0,100

0,100

0,100

0,100

0,600

0,025

0,025

0,025

0,025

0,025

0,025

0,150

Sub-total

6,456

6,565

6,029

4,649

3,217

3,270 30,186

2) Support Expenditure

a) Studies
b) Indepent Experts for
selection:

Nature (07010402)

Environment (07010403)

Third Countries
c) Information and
publications:

Nature (07010402)

Environment (07010403)

Third Countries
(07010405)
Sub-total

0,400

0,500

0,035

0,050

0,050

0,005

0,407

0,509

0,036

0,050

0,050

0,005

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,000

0,807

0,000

1,009

0,000

0,071

0,000

0,100

0,000

0,100

0,000

0,010

1,040

1,057

0,000

0,000

0,000

0,000

2,097

TOTAL

7,496

7,622

6,029

4,649

3,217

3,270 32,283

19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.2.

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire
programming period)

Breakdown

Commitments (in € million to three decimal places)

Type
of outputs
(projects,
files )

Number of
outputs
(total for years
2005-2006)

Average
unit cost

Total cost

(total for years
2005-2007)

1

2

3

4=(2X3)

LIFE NATURE

Nature Conservation

Nature Starters + Coop

LIFE ENVIRONMENT

Projects

Projects

Projects

LIFE THIRD COUNTRIES

Projects

TOTAL COST

135

20

216

44

1,000

0,045

0,626

0,317

134,889

0,900

135,166

13,927

284,882

7.

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1.

Impact on human resources

Staff to be assigned to management of the
action using existing and/or additional
resources

Total

Description of
tasks deriving
from the action

Types of post

Number of permanent
posts

Number of
temporary posts

Officials or
temporary staff
(according to the
Management
Plan 2004)

A
B
C

20,75  (19  D1  +  1,75
B2)

11,17  (11  D1  +  0,17
B2)

11,17  (11  D1  +0,17
B2)

20,75

11,17

11,17

Other human
resources

Total

 43,09

43,09

20

7.2.

Overall financial impact of human resources

Type of human resources

Amount (€)

Method of calculation *

Officials

Temporary staff

Other human resources

3,153

Please see attached budget
breakdown for further details

Total

3,153

The amounts are total expenditure for twelve months.

7.3.

Other administrative expenditure deriving from the action

Budget line (number and heading)

Amount €

Method of calculation

Overall allocation (Title A7)

A0701 – Missions

A07030 – Meetings

0,120

0,050

2 meetings with the 25 MS

2  compulsory  committees  per  year
(Habitat  Committee  and  LIFE
Committee).  Both  are  management
Committees.

A07031 – Compulsory committees 1

0,050

A07032 – Non-compulsory committees 1

A07040 – Conferences

A0705 – Studies and consultations

Other expenditure (specify)

Information systems (A-5001/A-4300)

Other expenditure - Part A (specify)

Total

0,220

The amounts are total expenditure for twelve months.

I.

II.

III.

Annual total (7.2 + 7.3)

Duration of action

Total cost of action (I x II) (see attached budget breakdown)

3,373 €

6 years

14,801 €

The  needs  for  human  resources  and  other  administrative  expenditure  will  be  covered
internally with the annual resources allocated to the DG Environment in the framework of the
annual allocation procedure.

21

9.

FOLLOW-UP AND EVALUATION

9.1.

Follow-up arrangements

Each co-financed project is followed by the Commission service aided by external monitoring
teams from set-up to completion stage. The relevant monitoring team visit on-going projects
at least once per year, the Commission service aims to visit projects at least once during the
project  period.  The  monitoring  teams  provide  reports  on  the  progress  of  the  project  (both
technical and financial aspects) every 6 months, and a final report. Beneficiaries are required
to  report  to  the  Commission  on  the  implementation  of  the  project  (technical  and  financial).
The content and periodicity of the reports are detailed in the grant agreement concluded with
the beneficiary. Each report is evaluated by the competent Commission service assisted by the
monitoring teams.

Final  reports  of  the  beneficiary  are  to  be  provided  within  the  3-month  period  following
completion of the project.

9.2.

Arrangements and schedule for the planned evaluation

An  ex-post  evaluation  about  the  implementation  of  the  regulation,  its  contribution  to  the
development of the Community environmental policy, and the use made of the appropriations
will  take  place  in  2006.  No  later  than  30  September  2006,  the  Commission  will  submit  the
evaluation report to the European Parliament and the Council.

10.

ANTI-FRAUD MEASURES

Potential  beneficiaries  are  required  to  provide  provisional  statements  of  income  and
expenditure related to the project for which funding is requested. Payments are made on the
basis  of  the  terms  and  conditions  relating  to  the  grant  agreement  and  on  the  basis  of
expenditure  and  income  statements  duly  certified  by  the  beneficiary  and  checked  by  the
relevant service of the Commission. On the spot controls are also foreseen. (Beneficiaries are
required  to  keep  all  details  and  justifying  documents  for  a  period  of  5  years  following
completion of the project).

Details of Anti-fraud measures are set out and included in the  LIFE standard  administrative
provisions  (controls  made,  production  of  reports  and  statements,  justifying  documentation
etc.) Provisions for the recuperation of unduly received sums are also included, together with
the terms for charging penalty  interest  on  such sums where applicable.  Bank  guarantees are
required,  except  for  public  authorities,  and  must  cover  40%  (equal  to  the  initial  advance
payment) of the maximum subsidy amount. The bank guarantee must be valid for the duration
of the project plus 6 months.

The  Commission  requires  that  an  auditor,  nominated  by  the  beneficiary,  will  verify  the
financial statement provided to the Commission with the final reports. The auditor will verify
according  to  national  legislation  and  accounting  rules  and  also  verify  that  costs  incurred
respect the LIFE standard administrative provisions.

22