COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and the Council establishing the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014
Date: 2018-06-06
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: EU financial instrument, EU programme, energy grid, investment, project of common interest, structural policy, sustainable development, trans-European network, transmission network, transport network

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.6.2018  SWD(2018) 312 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and the Council establishing the Connecting Europe Facility and repealing Regulations (EU)  No 1316/2013 and (EU) No 283/2014 {COM(2018) 438 final} - {SEC(2018) 292 final} - {SWD(2018) 313 final}  
 
 
Table of contents 

1 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................................... 3 

1.1  Scope and context .............................................................................................. 3 
1.2  Lessons learned from previous programmes ..................................................... 7 
1.3  Results from the consultation activities ........................................................... 10 

2 

THE OBJECTIVES ............................................................................................................................ 11 

2.1  Challenges for the programmes of the next MFF ............................................ 11 
2.2  Objectives of the programmes for the next MFF ............................................ 25 

3 

PROGRAMME STRUCTURE AND PRIORITIES ........................................................................... 27 

3.1  The core priorities remain focused on the trans-European networks .............. 28 
3.2  The  scope  of  intervention  in  the  digital  sector  is  redefined  in 
complementarity  with  the  new  Digital  Europe  Programme  and  with 
the centralisation of all financial instruments under InvestEU ....................... 30 

3.3  The scope of intervention in the energy sector is extended to targeted 
cross-border  cooperation  in  the  field  of  renewable  energy  under 
specific circumstances ..................................................................................... 31 

4 

DELIVERY MECHANISMS OF THE INTENDED FUNDING ...................................................... 33 

4.1  Changes  in  the  programme  delivery  according  to  the  Commission's 

global simplification measures ........................................................................ 33 
4.2  Direct management of CEF and its benefits .................................................... 34 
4.3  Proposed  changes  in  the  programme  management  by  the  parent  DGs 

and the Agency ................................................................................................ 35 

5 

HOW WILL PERFORMANCE BE MONITORED AND EVALUATED?....................................... 42 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................................ 45 

ANNEX 2: STAKEHOLDER CONSULTATION ....................................................................................... 47 

ANNEX  3:  COMPREHENSIVE  ASSESSMENT  OF  THE  EXTENSION  OF  SCOPE  OF  THE 
ENERGY  WINDOW  TOWARDS  TARGETED  CROSS-BORDER  COOPERATION  IN 
RENEWABLES .................................................................................................................................. 64 

ANNEX 4: FURTHER BACKGROUND REGARDING THE SCOPE OF CEF DIGITAL ...................... 83 

1 

 
 
 
Glossary 

Term or acronym 

Meaning or definition 

Connecting Europe Facility 

European Energy Programme for Recovery (EEPR) 

European Fund for Strategic Investments 

European Investment Bank 

European Bank for Reconstruction and Development 

European Rail Traffic Management System 

European Structural and Investment Funds 

Trans-European Telecommunications Networks  

Innovation and Networks Executive Agency 

Multiannual Financial Framework 

Projects of Common Interest 

Renewables 

Single European Sky ATM Research 

Trans-European Networks 

Trans-European Energy Networks  

Trans-European Transport Network 

CEF 

EEPR 

EFSI 

EIB 

ERDF 

ERTMS 

ESIF 

eTEN 

INEA 

MFF 

PCIs 

RES  

SESAR 

TEN 

TEN-E 

TEN-T 

2 

 
 
 
1  INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

"State-of-the-art  connectivity  of  digital,  energy  and  transport  infrastructure  is  key  to 
Europe’s territorial, social, and economic cohesion."1 

1.1  Scope and context 

The  Connecting  Europe  Facility2  (CEF)  is  a  common,  centrally-managed  funding 
programme  for  transport,  energy  and  telecommunications  infrastructures,  with  an 
available  budget  of  EUR 30.4  billion  for  the  years  2014  to  2020.  It  was  established  as 
part of the Europe 2020 strategy for smart, sustainable and inclusive growth and the EU’s 
‘20-20-20’ objectives in the area of energy and climate policy. 

On 2 May 2018, the European Commission adopted its proposals for a new Multiannual 
Financial  Framework  (MFF)  for  2021-2027.  Under  these  proposals,  the  Connecting 
Europe Facility programme will have a budget of EUR 42,265,000,000 over this period. 
This impact assessment report reflects the decisions of the MFF proposals and focuses on 
the changes and policy choices which are specific to this instrument.  

Based  on  the  respective  sectoral  guidelines3,  CEF  supports  the  development  of  trans-
European  networks  (TEN)4,  with  the  objective  of  improving  cohesion  in  the  internal 
market and the EU’s competitiveness in the global market. The general objective of CEF 
is to foster implementation of projects contributing to the completion of the TEN. This is 
reflected  in  the  priorities  laid  down  in  the  guidelines  for  the  sectors  of  transport  and 
energy. CEF addresses market failures, focuses on projects of high European added value 
and helps leverage further investment from the private sector. 

As the scope of intervention in the digital component of CEF has changed significantly, 
it  is  necessary  to  repeal  the  sectoral  guidelines  for  telecommunications  and  incorporate 
the provisions defining and prioritising projects of common interest in the area of digital 
connectivity  -  which  would  have  been  the  substance  of  the  revised  digital  guidelines  - 
into the CEF Regulation. This was done in order ensure  a coherent and comprehensive 
view of its scope, of the funding instruments and priorities proposed for the next multi-
annual  financial  framework,  and,  conversely,  to  avoid  overlaps  and  contradictory 
legislation. 

As  outlined  in  the  Communication  on  the  budget  for  Europe  20205,  the  Commission 
considered  that  "while  the  market  can  and  should  deliver  the  bulk  of  the  necessary 
investments,  there  is  a  need  to  address  market  failure  –  to  fill  persistent  gaps,  remove 
bottlenecks and ensure adequate cross-border connections. However, experience shows 
that  national  budgets  will  never  give  sufficiently  high  priority  to  multi-country,  cross-

1  Communication from the Commission "A new, modern Multiannual Financial Framework for a European Union that 

delivers efficiently on its priorities post-2020" COM(2018)98 – 14.2.2018 

2 Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013. 
3 Regulation (EU) No 1315/2013 of the European Parliament and of the Council of 11 December 2013 on Union 
guidelines for the development of the trans-European transport network, Regulation (EU) No 347/2013 of the 
European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure, and 
Regulation(EU) No 283/2014.of the European Parliament and of the Council on guidelines for trans-European 
networks in the area of telecommunications, to be repealed by the new CEF Regulation. 

4 Articles 170-174 of the Treaty on the Functioning of the European Union (TFEU). 
5 Communication from the Commission to the European Parliament, the Council, the European economic and social 
Committee and the Committee of the regions: A Budget for Europe 2020, European Commission, 29 June 2011. 

3 

 
 
 
 
 
                                                            
border  investments  to  equip  the  Single  Market  with  the  infrastructure  it  needs.  This  is 
one  more  example  of  the  added  value  of  the  EU  budget.  It  can  secure  funding  for  the 
pan-European  projects  that  connect  the  centre  and  the  periphery  to  the  benefit  of  all. 
Therefore, the Commission has decided to propose the creation of a Connecting Europe 
Facility to accelerate the infrastructure development that the EU needs.”  

Figure 1: Needs, priorities and CEF support 

Priorities 
defined in 
the 3 
sectorial 
guidelines 

Investments 
needs in 
transport, 
energy, ICT 

EU 
investment 
priorities 

EU co-
financed 
projects 

Market 
and 
national 
financing 
EFSI 

Market 
failures 
CEF ESIF 

A  mid-term evaluation6  of the current programme  was carried out  in  2017. It indicated 
that  CEF  is  overall  on  track  in  its  contribution  to  meeting  the  policy  objectives  of  the 
TENs  and  is  effective  in  supporting  projects  with  high  EU  added  value.  CEF  triggered 
the  development  of  projects  that  Member  States  had  failed  to  enable  with  their  own 
financial means. In some areas however, the effectiveness could still be improved. This 
would  require  a  number  of  improvements  in  the  financing  of  the  TENs  and,  where 
appropriate  the  European  Structural  and  Investment  Funds7  (ESIF),  with  a  view  to 
preparing a successor investment instrument post-2020. The financing framework of the 
TENs must take into account the impact of new initiatives such as the European Fund for 
Strategic Investments (EFSI) as well as the creation of the single guarantee fund “Invest 
EU”.  The  framework  must  also  fully  align  with  the  current  policy  priorities  of  the 
Juncker  Commission  as  well  as  long-term  objectives  such  as  the  Paris  Agreement8 
commitments with more emphasis on digitalization, decarbonisation, (cyber)security and 
green industrial leadership. In this context, an extension of scope to integrate renewables 
into cross-border  cooperation involving at least two Member States is considered as  an 
additional element in the CEF-energy window. This extension is designed to make use of 
the  cost-effective 
the  EU  by  stimulating 
regional/cross-border  cooperation,  sector  integration  and  enabling  the  EU  to  meet  its 

renewable  energy  potential  across 

6 COM(2018)66 
7  Including European Regional and Development Fund (ERDF) and the Cohesion Fund (CF) 
8  In 2015, the adoption of the Paris Agreement by the 21st session of the Conference of the Parties (COP21) to the UN 
Framework Convention on Climate Change committed the EU and its Member States to a reduction in domestic 
greenhouse gas (GHG) emissions of at least 40 % by 2030 and by 80 to 95 % by 2050 compared with 1990 levels. 

4 

 
 
 
 
                                                            
 
 
 
collective 2030 target. The scope of intervention of CEF Digital is changed in the same 
context,  in  order  to  ensure  a  closer  alignment  with  the  Union's  strategic  connectivity 
objectives, and a stronger focus on the core overall objective of the programme, allowing 
it  to  deliver  on  the  infrastructure  necessary  for  the  digital  transformation  of  the 
economy9. 

Moreover, in alignment with the cross cutting objectives of the new MFF, there is a need 
to  explore  ways  to  incorporate  in  the  future  programme  simplification,  flexibility, 
synergies  and  coherence  with  other  EU  programmes.  Of  paramount  importance  is  the 
need to reflect upon the considerations put forward in the Commission's reflection paper 
on  the  EU's  finances10  which  highlights  CEF  as  a  directly-managed  EU  programme 
supporting major  EU infrastructures with  high EU added  value,  contributing in  making 
the EU visible and recognisable in the daily lives of its citizens. The paper also invites 
reflection on improvements to strengthen the performance and impact of the programme, 
in particular by avoiding overlaps, combining instruments and ensuring complementarity 
and simplification. In this spirit, the design of the successor CEF programme has to well 
address any potential overlaps and maximise synergies with the different EU instruments 
and programmes such as EFSI/InvestEU, the European Structural and Investment Funds 
(ESIF), Horizon Europe and the envisaged Digital Europe Programme. 

The  European  Commission  jointly  with  the  Estonian  Presidency  contributed  to  this 
reflection  process  by  holding  in  the  margins  of  the  Informal  Council  in  Tallinn  in 
November  2017  a  joint  session  of  transport  and  energy  ministers,  looking  into  the 
achievements  and  the  future  of  CEF  as  well  as  its  priorities  post-2020.  The  session 
highlighted the need to build in the next MFF on the success of CEF as the key tool for 
promoting infrastructure development and a deeper integration of the EU. The outcome 
of  discussions  were  reflected  in  formal  Council  Conclusions  on  TEN-T  and  CEF  11 
adopted by unanimity in December 2017, which emphasised the efficient management of 
the CEF budget and called for the reinforcement of CEF as the strategic EU investment 
instrument for the realisation of the TENs. 

While completion of electricity network infrastructure remains the priority to achieve the 
development of renewables, integrating cross-border cooperation on renewables reflects 
the more Europeanized approach adopted as part of the Clean Energy for all Europeans 
Package  with  a  collective  responsibility  to  reach  at least  27 %  renewables  in  2030, the 
changed  policy  context  and  the  amendments  from  both  legislators  calling  on  the 
Commission  to  enable  and  support  regional  cooperation  in  the  currently  negotiated 
review  of  the  Renewables  Directive  (for  more  details  cf.  chapter  3.3.  Annex  3).  It  will 
also  contribute  to  making  better  use  of  synergies,  align  with  the  development  of  the 
meshed  grid  under  current  energy  priority  corridors  and  facilitate  sector  coupling  e.g. 
between power and mobility.  

A  first  class  digital  infrastructure  is  also  a  clear  political  priority,  not  only  for  the 
Commission  but  also  for  many  Member  States.  In  the  wake  of  the  Tallinn  Digital 
Summit  of  29  September  2017,  the  European  Council  has,  in  its  conclusions  of  the 
October 2017 meeting, formally declared that “to successfully build a Digital Europe, the 

9 These changes, as well as the ones resulting from the realignment of the instruments in the context of the coherence 

of the overall MFF package, are discussed in detail below as well as in Annex 4.  

10 COM(2017) 358 of 28 June 2017 
11 http://data.consilium.europa.eu/doc/document/ST-15053-2017-INIT/en/pdf  

5 

 
 
 
 
  
                                                            
EU needs in particular […] a first rate infrastructure and communications network: this 
requires cooperation at the EU level, inter alia with the aim of achieving world-class very 
high-speed fixed and mobile networks (5G) all across the EU […]” (EUCO 14/17). 

In  its  report  on  the  next  MFF:  "Preparing  the  Parliament’s  position  on  the  MFF  post-
2020"12, the European Parliament: 

"supports reinforcing the Connecting Europe Facility […]; 

that 

is  should  prioritise  greater 

[…]  Stresses  that  an  updated  and  more  effective  CEF  programme  should  cover 
all modes of transport, including road and rail infrastructure, as well as inland 
waterways;  considers 
links  between 
comprehensive networks and modes of transport that contribute to reducing CO2 
emissions,  and  focus  on  interconnections  and  the  completion  of  the  network  in 
peripheral areas; reiterates the importance of enhancing interoperability through 
the  European  Railway  Traffic  Management  System  and  enabling  the  full  use  of 
the  Single  European  Sky  initiative;  calls  for  the  completion  of  the  European 
digital air traffic management system; 

[…]  stresses  that  CEF  Telecom  should  continue  to  support  Digital  Service 
their 
Infrastructures  and  high-speed  broadband  networks  by  enabling 
accessibility,  including  in  remote  regions  and  rural  areas,  and  by  improving 
digital literacy, interconnectivity and interoperability; 

[…] calls […] for continuous support for investments ensuring the diversification 
of  energy  sources  and  routes, 
increasing  energy  security  and  energy 
independence, and enhancing energy efficiency and the use of renewable energy, 
including by CEF Energy;" 

With regards to complementarity with related programmes to CEF, the Parliament called 
for  the  Commission  to  implement  and  further  facilitate  greater  synergies  and 
complementarities  between  the  different  EU  funds,  including  cohesion  policy,  FP9  and 
EFSI.  The  Parliament  also  asked  for  a  thorough  climate  mainstreaming  and  underlined 
that  the  EU  should  not  finance  projects  and  investments  that  are  contrary  to  the 
achievement of EU climate goals.  

On the basis of the CEF mid-term evaluation and stakeholder consultation including the 
Open  Public  Consultation  on  EU  funds  in  the  area  of  strategic  infrastructure,  the 
envisaged scope of this impact assessment relates to identifying the main challenges to be 
addressed by the future CEF programme 2021-2027 with a focus on the key issue-areas 
requiring  improvement  compared  to  the  current  CEF  programme.  Stemming  from  this 
impact  assessment  will  be  the  overall  general  and  specific  objectives  of  the  future 
programme  and  a  programme  structure  and  associated  delivery  mechanisms  that 
reinforce  CEF  for  the  purpose  of  the  achievement  of  the  EU  policy  objectives  in  the 
sectors concerned. 

This impact assessment satisfies the requirements of the Financial Regulation in respect 
of preparing an ex-ante evaluation.  

12 European Parliament resolution of 14 March 2018 on the next MFF: Preparing the Parliament’s position on the MFF 

post-2020 (2017/2052(INI)) 

6 

 
 
 
  
 
                                                            
1.2  Lessons learned from previous programmes 

Mid-Term Evaluation of CEF 

In  accordance  with  the  CEF  Regulation13,  the  Commission,  in  cooperation  with  the 
Member States and the beneficiaries concerned, was required to present a report on the 
mid-term  evaluation  of  the  CEF  to  the  European  Parliament  and  the  Council.  This 
report14 and its accompanying Commission staff working document (SWD) was adopted 
by  the  Commission  on  13  February  2018.  The  evaluation  assessed  the  programme’s 
overall performance in light of its general and sectoral objectives, as well as compared to 
what  has  been  achieved  as  a  result  of  national  or  EU  action.  In  line  with  the 
Commission’s Better Regulation Guidelines, the evaluation was carried out according to 
five criteria: effectiveness, efficiency, relevance, coherence and EU added value.  

Table 1: Summary financial information as of March 2018 (EUR million)15 

CEF Budget 

CEF Funding (Grants)16  

Sector 

Total CEF 
Budget  
(Financial 
programming 
Draft Budget 
2019) 

out of 
which total 
CEF 
Budget 
allocated to 
grants 

Total reserved by 
an annual work 
programme or an 
amended multi-
annual work 
programme  
(% of CEF 
budget allocated 
to grant) 

out of which 
total Actual 
CEF Funding 
for the awarded 
grants  
(% of CEF 
budget allocated 
to grant)17 

Total effective 
budgetary 
commitment for 
grants  
(% Actual CEF 
funding) 

Total effective 
payment for 
grants  
(% Actual 
CEF funding) 

Transport 

24.138 

23.549 

23,540 (100%) 

22,293 (95%) 

8,877 (40%) 

3,608 (16%) 

Energy 

4.752 

4.574 

3,406 (74%) 

2,461 (58%) 

1,201 (49%) 

259 (11%) 

Telecom 

1.043 

579 

325 (56%) 

176 (30%) 

155 (88%) 

71 (40%) 

Synergy 

4018 

22 (55%) 

22 (100%) 

8 (40%) 

Total 

29.933 

28.724 

27,311 (95%) 

24,952 (87%) 

10,255 (41%) 

3,946 (16%) 

The  grants  selected  under  the  Multi-annual  Work  Programmes  for  CEF  Transport  and 
CEF  Energy  are  managed  through  annual  instalments  over  the  period  2014-2020.  The 
legal commitment is broken down into one or several budgetary commitments depending 
on the progress of the action. The total budgetary commitment is therefore lower than the 

13 Article 27 of Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013. 
14 COM(2018)65 
15The synergy call funding came from both the Transport and Energy budgets. 
16Not taking into account the credits allocated to PSAs, Financial Instruments and procurements (including IT costs for 
TENtec). In addition, the total CEF Budget for grant has been supplemented with internal assigned revenues for EUR 
255 million (mostly allocated to the CEF Transport). 

17 Taking into account funding reductions due to amendments, closures and terminations   
18 The indicative amount for the multi-sectorial call for proposal (energy and transport) was EUR 40 million but the 

effective demand was limited and only EUR 22 million was awarded in grants 

7 

 
 
 
 
 
 
 
 
 
                                                            
total amount allocated via grant agreements (i.e. the total of the budgetary commitment 
represents  41%  of  the  total  amount  of  the  grants  allocated).  So  far,  16%  of  the  total 
amount allocated to the selected grants has been paid through pre-financings and interim 
payment accounts. This information is broken down per sector in the above table. 

Overall, the conclusions of the Mid-Term Evaluation of CEF were as follows: 

"The  evaluation  illustrated  that  after  the  first  three  and  a  half  years  of  CEF 
implementation,  the  programme  is  on  track,  although  it  is  much  too  early  to  measure 
results given that the programme implementation is still at an early stage. Moreover, the 
performance  framework  provided  in  the  Regulation  has  proven  lacking well  defined  or 
robust indicators. With this reservation in mind, the evaluation showed that: 

  CEF  is  an  effective  and  targeted  instrument  for  investment  in  trans-European 
infrastructure  (TEN)  in  transport,  energy  and  the  digital  sector.  Since  2014,  it  has 
invested  EUR 25  billion,  which  has  resulted  in  approximately  EUR 50  billion  of 
overall  infrastructure  investment  in  the  EU.  CEF  contributes  to  the  Commission’s 
priorities  on  jobs,  growth  and  investment,  the  internal  market,  Energy  Union  and 
climate,  and  the  Digital  Single  Market.  In  so  doing,  it  is  strengthening  the 
competitiveness of the EU economy. 

  CEF  brings  high  European  added  value  for  all  Member  States  by  supporting 
connectivity  projects  with  a  cross-border  dimension.  Most  funding  is  awarded  to 
projects  bridging  missing  links  and  removing  bottlenecks,  with  the  aim  of  ensuring 
the  proper  functioning  of  the  EU  internal  market  and  territorial  cohesion  among 
Member  States  in  the  transport,  energy  and  digital  sectors.  Projects  in  energy  also 
provide  security  of  supply  and  are  key  for  the  cost-effective  decarbonisation  of  the 
economy.  CEF  is  also  instrumental  in  the  deployment  of  EU-wide  new  systems  in 
traffic management and safety (e.g. SESAR for aviation, ERTMS for railways), high-
performance  electricity  lines  and  smart  grids  essential  for  the  rapid  intake  of 
renewable  non-carbon  energy  sources,  and  in  the  roll-out  of  broadband  and 
interconnected  Digital  Services  (such  as  Open  Data,  e-Health,  e-Procurement, 
eIdentification and eSignature).  

  The direct management of CEF grants has proved very efficient, with a strong project 
pipeline  and  a  competitive  selection  process,  a  focus  on  EU  policy  objectives, 
coordinated  implementation  and  the  full  involvement  of  Member  States.  The  INEA 
executive agency has a very good track record on the financial management of CEF 
and  on  optimising  the  budget,  particularly  thanks  to  its  flexibility  in  quickly  re-
directing money unspent by certain actions to financing new ones. 

  For  the  first  time,  a  share  of  the  cohesion  budget  (EUR 11.3  billion  for  transport) 
was  executed  under  direct  management  within  the  CEF  framework.  100 %  of  the 
envelope  was  allocated  during  the  first  half  of  the  programme  period,  almost 
exclusively  on  sustainable  transport  modes.  Targeted  technical  assistance,  lower 
administrative  costs for  Member  States,  clear  funding  priorities  and  a  solid  project 
pipeline stemming from the continuity of projects and studies formerly supported by 
the TEN-T Programme or by the Cohesion Policy instruments contributed to the fast 
allocation of funds.  

8 

 
 
 
 
 
 
 
  CEF  has  continued  to  use  and  develop  innovative  financial  instruments.  However, 
their deployment has been limited due to the new possibilities offered by EFSI19. The 
use of the CEF financial instruments is expected to take up during the second half of 
the  programme  when  complementarity  between 
financial 
instruments  and  EFSI  will  have  been  ensured.  The  Connecting  Europe  Broadband 
Fund,  building  on  contributions  from  CEF  and  EFSI,  is  expected  to  become 
operational  in  2018  and  fund  the  rollout  of  very  high  capacity  networks  in 
underserved areas, with an important leverage effect.  

the  CEF  specific 

  Moreover,  a  very  positive  first  experience  of  blending20  grants  with  financial 
instruments  was  carried  out  in  2017  in  transport,  with  EUR  2.2  billion  funding 
requested for a call with an indicative budget of EUR 1 billion, enabling the use of 
grants to maximise the leverage of private or public funds.  

  CEF spending in transport and energy is a major contributor to the EU’s target of at 
least 20 % of the total EU budget to be dedicated to climate action-related spending. 
In  the  area  of  energy  more  than  50%  of  the  CEF  energy  budget21  was  allocated to 
electricity  transmission  and  smart  grids  therefore  contributing  to  the  energy 
transition. 

  In  the  Telecom  sector,  the  dual  focus  of  CEF  on  digital  cross  border  services  of 
public interest and communication and computing infrastructure has shown that the 
programme has an important impact on achieving the EU digital single market goals, 
enabling  citizens  and  businesses  to  access  high  quality  digital  services  across 
Europe.  It  has  helped  develop  and  implement  common  policies  to  address  societal 
challenges  including  the  digital  transformation  of  healthcare,  cybersecurity  and 
digitisation  of  governments.  However,  due  to  the  limited  resources  CEF  Telecom 
could  only  support  the  very  first  steps  towards  a  full  cross  border  digital 
infrastructure  in  areas  of  public  interest.  Given  the  limited  envelope  allocated  for 
broadband  under  CEF  vis-à-vis  the  size  of  the  investment  gap,  it  was  necessary  to 
implement  it  in  an  innovative  way  and  to  aim  at  maximising  leverage  in  order  to 
ensure  effectiveness.  However,  due  to  the  complex  set  up  of  the  dedicated  financial 
instruments, the investments on the ground will only materialise at a late stage in the 
implementation of the programme.  

  CEF has also tested cross-sectoral synergies, but has been limited by constraints in 
the current legal/budgetary framework. The sectoral policy guidelines and the CEF 
instrument would need to be made more flexible to facilitate synergies and be more 
responsive  to  new  technological  developments  and  priorities  such  as  digitalisation, 
while accelerating decarbonisation and addressing common societal challenges such 
as cybersecurity. 

  The  completion  of  the  TENs  defined  in  the  EU  policy  priorities  will  still  require 
massive investments, part of which will depend on continued EU support. The size of 
CEF  currently  makes  it  possible  to  address  only  some  of  the  identified  market 

19 In particular projects initially in the pipeline for CEF Debt Instrument got ultimately financed under EFSI guarantee 
20 Commission Implementing Decision C(2017) 164 ‘EU grants from the Connecting Europe Facility – Transport 
Sector (General envelope) combined with financing from the European Fund for Strategic Investments, or the 
European Investment Bank, or National Promotional Banks, or private sector investors’ 

21 EUR 1.25bn out of the EUR 2.46bn awarded in grants in the CEF energy calls between 2014 and 2017 

9 

 
 
 
 
 
 
                                                            
failures  in  all  three  sectors.  Therefore,  potential  exists  for  unlocking  further  public 
and  private  investment  if  additional  EU  budget  was  made  available  to  address 
market failures."  

In  addition,  concerning  the  delivery,  some  additional  points  of  improvement  were 
identified regarding the reduction of administrative requirements for small grants, and a 
certain lack of flexibility over time as regards the priorities and scope of intervention, for 
instance to accommodate new policy priorities or to reflect technological evolutions. 

Furthermore, various lessons learnt, which - due to the timing of the operational launch 
of  the  instruments  -  could  not  be  incorporated  in  the  Mid-Term  Evaluation.  They  have 
nevertheless been reflected in the proposals for the new CEF Digital, in particular in the 
change of scope and in the implementation mechanisms. The lack of adequate funding, as 
well as the limitation to financial instruments at the onset of the implementation of the 
current  CEF,  where  clear  impediments  to  CEF  having  a  strong  impact  in  the  area  of 
broadband. Most importantly, the experience of setting up the financial instrument in the 
field of broadband, as well as the monitoring of the broadband investments supported by 
other  EU  programmes,  clearly  underlined  that  there  are  gaps  and  missing  links  in  the 
types  of  projects  supported,  which  constitute  barriers  to  the  completion  of  the  Digital 
Single Market. These gaps and missing links, as well as the proposed refocus, are further 
described in section 2.1 below. Finally, new strategic objectives in the digital area have 
been defined in the Gigabit Society Strategy Communication, which have to be reflected 
in the new scope of CEF Digital, now focusing only on infrastructure. 

1.3  Results from the consultation activities  

OPC for the CEF Mid Term Evaluation and OPC on strategic infrastructure in the next MFF 

Overall, stakeholders reiterated their support for the CEF programme and highlighted the 
key role it plays in contributing to the EU’s objectives in areas such as the completion of 
the TENs, promoting economic growth and jobs across the EU. The transition to a low 
carbon system was named as the most important challenge for the future CEF in both the 
energy  and  transport  areas  by  respectively  94  and  98  %  of  respondents.  Stakeholders 
encouraged additional flexibilities in the new programme to encourage further synergies 
across the three sectors. 

Respondents in the transport sector stressed the importance of CEF in facilitating cross-
border  projects  as  well  as  removing  bottlenecks  and  missing  links.  Stakeholders  called 
for an increased budget in order to accelerate the decarbonisation and digitalisation of the 
transport sector while increasing connectivity across the EU. 

The energy-related responses to a very large extent reaffirmed the important contribution 
of CEF towards the completion of the trans-European energy infrastructure network and 
by extension towards the fulfilment of the Energy Union targets.  

The digital respondents highlight the central role of broadband connectivity as a catalyst 
for the economic and social development across society and sectors. In order to increase 
competitiveness of the EU, they call for increased investments into connectivity and 5G, 
which would help improve economic performance, generate jobs in the EU and promote 
a qualitative leap in the transition to a Digital Society. 

10 

 
 
 
 
 
 
 
Stakeholders at the same time provided useful feedback on the areas that require further 
improvement or development and this is detailed in the consultation report in Annex 2. 

Specific consultations concerning renewable energy 

The extension of scope towards cross-border projects in the field of renewable energy is 
supported  and  justified  by  relevant  findings  of  the  REFIT-evaluation  of  the  RES 
Directive of 201622. and the outcome of the specific expert stakeholder workshop on the 
extension to cross-border renewables cooperation which took place on 5th March 2018 in 
Brussels  where  stakeholders  present  (including  12  Member  State  governments) 
overwhelmingly felt that EU action (including financial support) was necessary in order 
to overcome the Member State's hesitance to engage in cross-border cooperation and/or 
overcoming associated barriers (for more details see annex 3) 

Specific consultations concerning synergies between sectors 

To  reinforce  synergies  between  the  three  sectors  specific  expert  workshops  were 
organised. A workshop on the Internet of Energy was held on 26 February 2018 and on 
30 January 2018 a workshop on Green-ICT. 

2  THE OBJECTIVES 

2.1  Challenges for the programmes of the next MFF  

Key features of the ongoing programme and the Baseline 

CEF is the main funding tool contributing to the objectives set by the Treaty23 as regards 
the establishment of the TENs and which have been identified in the respective sectorial 
guidelines. ESIF, the EIB, including through EFSI, and the  Member States alone, or in 
combination, make considerable contributions to the achievement of the objectives of the 
TENs;  however,  they  tend  to  focus  on  national  and  regional  areas  as  opposed  to  the 
European  dimension.  One  additional  challenge  is  that  TENs  are  complex  structures 
developed in a cross-border context with associated regulatory hurdles to be addressed.  

There  are  many  EU  actions  that  support  the  achievement  of  the  TENs  objectives.  The 
unique  features  of  CEF  however,  such  as  direct  management  (including  of  the  CEF 
Cohesion envelope for transport); the "use it or lose it" principle; clear prioritisation and 
deadlines; focus on cross-border and low-carbon infrastructures; flexibility to re-orientate 
unused  funds;  capacity  to  develop  synergies;  capacity  to  blend  with  private  finance; 
targeted technical assistance and the full involvement of the Member States through the 
respective Committees allow CEF to address these particularly complex challenges. CEF 
is  the  only  instrument  of  this  scale  at  the  EU  level  designed  to  specifically  tackle  the 
market failures due to the cross-border nature.  

As highlighted in the Reflection Paper on the Future of EU Finances,24 CEF is steering 
investments where the EU added-value is highest: on projects with a cross-border impact 
and European-wide interoperable systems and services. Given the persistence of market 

22 SWD(2016) 416 final 
23 Article 170 TFEU 
24 COM(2017) 358 of 28 June 2017 

11 

 
 
 
 
 
                                                            
failures for these types of projects as well as the significant investment needs that remain, 
the  continuity  of  the  instrument  is  very  relevant  and  indispensable  after  2020  for  the 
achievement  of  the  TENs.  In  addition,  thanks  to  its  efficient  modus  operandi  and  its 
capacity to attract private finance, CEF is also a major contributor to the Investment Plan 
for Europe and EU policy objectives of the Juncker Commission.  

An  unchanged  policy  (the  Baseline25),  would  see  the  continuation  of  the  current  CEF 
approach in the next financial perspective, carrying on in the post-2020 period with the 
same scope, delivery methods and budget (EUR 30.4 billion26). Investments in the TEN-
T core transport network, the integration of the internal energy market, security of energy 
supply, the transition to low-carbon and climate resilient economy and the digital single 
market  as  currently  possible  would  continue.  However,  without  further  refinement  of 
CEF,  the  main  challenges  identified  in  this  impact  assessment  could  not  be  addressed. 
For  example,  the  possibility  to  address  the  increased  investment  challenge  of  the 
existing27 and new emerging priorities, innovative projects and exploiting synergies and 
sector coupling would be very limited, while overlaps with other EU funds/programmes 
would persist.  

The  baseline  scenario  for  CEF  Digital  would  amount  to  quantitative  and  qualitative 
shortcomings, both risking to jeopardise the completion of the Digital Single Market. In 
terms of budget vis-à-vis the estimated investment gap, assuming that the same level of 
public  funding  is  dedicated  to  broadband  investment  through  all  the  EU  programs, 
including  CEF,  ESIF,  and  InvestEU,  and  taking  into  account  private  investment 
predictions,  it  is  estimated  that  between  50  and  70  million  households  across  the  EU 
would remain unconnected to high-capacity networks. More importantly, in the absence 
of  a  change  of  scope  of  CEF  Digital,  digital  projects  of  strategic  importance  for  EU's 
competitiveness  would  risk  remaining  unrealised,  translating  into  significant  untapped 
potential  in  the  Digital  Single  Market.  Finally,  in  terms  of  the  overall  structure  of  the 
CEF programme, failure to bring CEF digital budget to a more comparable level than that 
of the two other sectors would mean failure to reflect the importance of  digitalising the 
European economy and, in particular, the other two sectors of CEF. 

With  respect  to  the  qualitative  shortcomings  of  CEF  Telecom,  and  to  the  proposed 
change of scope of CEF Digital, a review of the support for broadband by instruments in 
the current programming period revealed that several types of digital projects of strategic 
importance  are  underfunded  or  overlooked.  Seamless  connectivity  networks,  including 
cross-border links and international connectivity networks have clearly been absent under 
the  existing  EU  schemes,  including  ESIF  investments,  since  it  was  decided  that 
INTERREG 2014-2020 would not invest in digital networks and most other Operational 
Programmes  are  based  on  (Member  States')  national  core-to-periphery  models.  The 
deployment  of  5G  corridors,  by  definition  cross-border,  would  be  clearly  hampered  if 

25 This Impact Assessment uses as basis Baseline EU28 including the UK, because due to the nature of the CEF Calls 
procedure there is no possibility to single out particular MS or attribute the average annual envelope between the 
individual MS. 

26 CEF support is attributed through competitive calls. It is therefore not possible to single out an envelope for the UK 
and to define an EU 27 baseline. To date, grants awarded to beneficiaries established in the UK amount to EUR 
430.8 million. Moreover, specifically for CEF-energy, the track record shows that UK related projects tend to be 
commercially viable and therefore do not require subsidies for construction. They benefit from grants for preparatory 
studies which are normally much less budget intensive than construction subsidies 

27 E.g. there will be a step-change in the need for the reinforcement of the electricity transmission grid to be able to 

support the decarbonisation processes 

12 

 
 
 
 
                                                            
broadband  support  would  continue  under  the  same  conditions  as  the  current  ones. 
Moreover,  various  areas  throughout  the  EU  would  remain  uncovered,  unless  grant 
support  is  extended.  The  experience  of  setting  up  the  financial  instrument  dedicated  to 
broadband confirmed the importance of financial instruments in generating leverage for 
broadband investments and dealing with problems of access to finance; however, it also 
underlines the difficulty of steering private investments into market failure areas, due to a 
mismatch between risks and expected returns. While in such cases, a low intensity grant, 
possibly  blended  with  a  financial  instrument,  is  sufficient  to  render  a  deployment 
commercially viable,  it is necessary to  be able to provide such grant  in order to ensure 
that  the  project  is  implemented  and  that  it  generates  a  comprehensive  coverage  of  the 
area in question. In other words, a grant component is needed to ensure a stronger policy 
steer of the intervention. 

The main challenges and problems to be addressed by the future programme 

The findings of the open public consultation on the future CEF programme and the CEF 
mid-term evaluation show that there is scope to build on the momentum created with the 
positive  implementation  of  CEF  in  the  period  2014-20.  Further  aligning  CEF  with  the 
current  political  priorities  of 
in  particular  digitalisation  and 
the  Commission, 
decarbonisation, can actually contribute to a strengthening of CEF delivery as more areas 
for  synergy  may  emerge.  The  incorporation  of  support  for  cross-border  renewables 
planning and deployment can be complementary to the development of the meshed grid 
(=integrated development of electricity transmission  and offshore sources infrastructure 
(in  the  North  Seas  and  the  Baltic  Sea)  which  is  a  complex  endeavour.  As  with  all 
programmes of the MFF, the challenge to increase flexibility, coherence and synergies, 
simplification and focus on performance needs to be addressed. In considering how CEF 
could be improved, the following main challenges have been identified: 

First challenge: completion of Trans-European Networks in transport, energy and digital 
area 

Europe's  sustainable  growth  and  competitiveness  depend  on  efficient  connectivity  both 
within  and  to  the  rest  of  the  world.  CEF  is  a  key  EU  funding  tool  contributing  to  the 
achievement  of  the  objectives  set  by  the  Treaty  as  regards  the  establishment  and 
development  of  the  Trans-European  Networks.  Other  EU  instruments  complement  this, 
as  the  investment  needs  go  far  beyond  interconnectors  with  the  transition  to  a 
decarbonised system having in particular a very strong decentralised dimension (see also 
second  challenge28.  Achieving  well-interconnected, 
interoperable  and  efficiently 
managed  transport,  energy  and  digital  infrastructures  in  Europe  requires  the  ability  to 
plan and invest in a coordinated long-term approach at EU level.  

In  the  post-2020  financial  period,  the  continued  development  of  high-performance 
infrastructure  connecting  and  integrating  the  Union  and  all  its regions,  in  the  transport, 
energy  and  digital  sectors  will  be  crucial  for  strengthening  the  social,  economic  and 
territorial  cohesion  of  the  Union  and  contributing  to  the  creation  of  a  single  European 
transport area, an EU Energy Union, and the Digital Single Market (DSM).  

28For example, only the investment needs for renewables over 2021-2030 to meet the at least 27 % target for 2030 in 
Europe were estimated to be 240,000-400,000 million Euros and hence already higher than the TEN-E investment 
needs indicated above. Estimates go even up to 600,000 million Euros in a study of 2017 for the ITRE Committee 
that provided estimates for investments that ensure alignment with 2050 decarbonisation.  

13 

 
 
 
 
 
 
                                                            
As  illustrated  in  the  table  below,  recent  studies  have  estimated  significant  investment 
needs required in order to fulfil the objectives of the TENs.  

Table 2: Estimated investment needs related to the Trans-European Networks - 
2021-2030 (EUR million) 

TEN - Transport 
TEN - Energy  
TEN - Digital 

Investment needs  
550,00029- 1,500,000 
178,67030 
500,00031 

For  transport,  the  figures  cover  cross-border  sections,  bottlenecks  and  missing  links  on 
the TEN-T core network, the large scale deployment of traffic management systems such 
as SESAR and ERTMS and major new priorities such as alternative fuels, digitalisation, 
and overall safety and security. Taking into account the TEN-T Comprehensive Network 
and urban transport investment needs, this figure would amount to EUR 1.5 trillion. Over 
the period 2021-2027, it is estimated that the total investments in the area covered by the 
new  programme  (core  network,  parts  of  the  comprehensive  networks  and  additional 
investments in decarbonisation and digitalisation of transport) would be close to EUR 1 
trillion, while the new instrument would only target approx. 10% of the total, in order to 
focus  the  intervention  on  where  it  brings  clear  EU  added-value.  In  addition,  important 
support  would  also  be  needed  through  ESIF  in  order  to  match  the  investment  needs, 
notably as regards urban and territorial mobility32.  

For  energy,  the  figures  cover  infrastructure  projects  with  cross-border  relevance  in 
electricity,  gas33  and  smart  grids  at  transmission  level.  The  detailed  assessment  of  the 
investment  needs  in  each  of  the  TEN-E  priority  corridors  and  areas  (factoring  in  the 
historical data on the average co-funding rate required within corridor) indicates that out 
of EUR 11 billion EU support needed for TEN-E (2021-2027), more than 85% would be 
required for electricity PCIs. It is expected that smart grid PCI projects alone will require 
EUR 2bn in EU support in the next decade. This indeed confirms that a step change in 
investments will be required in reinforcing the electricity grid (for higher absorption of 
renewable  generation),  in  electricity  storages  and  grid  smartening  and  therefore  it  is 
expected that projects' technological innovation will become even more important driver 

29 Based on a consultation of Member States carried out in June-July 2017 and relating to the Core Network and 

Horizontal Priorities only. EU support to the Comprehensive Network (notably in Cohesion Member States) and 
urban mobility is not included in the EUR 95 billion amount indicated in the table. 

30 Based on the study "Investment needs in trans-European energy infrastructure up to 2030 and beyond", Ecofys, July 

2017. 

29 Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society - COM(2016)587 and 

other studies. The figure includes both private and public investment needs to reach the targets set. 

32 Specific attention will be given to the outermost regions connectivity needs and participation to the Trans-European 
Transport Network as indicated in the Commission Communication of 24 October 2017 "The outermost regions of 
the European Union: towards a new approach" (COM (2017) 623 final) 

33  The  recent  Communication  on  strengthening  Europe's  energy  networks  (COM(2017)  718  of  23  November  2017) 
recognises that the gas grid has become more resilient and nearly all Member States comply with the N-1 criterion 
and  already  have  access  to  two  sources  of  gas.  If  the  necessary  commitment  is  ensured  from  Member  States, 
promoters, regulators and stakeholders, the remaining bottlenecks can be largely addressed by 2022/25 and Europe 
should achieve a well interconnected and shock resilient gas grid.  

14 

 
 
 
 
 
 
                                                            
behind the grant decisions34. It should be noted that the investment needs in the overall 
energy sector associated with the transition to a low carbon system are much higher than 
those  reflected  under  the  scope  of  TEN-energy  which  focuses  on  transmission 
infrastructure  with  cross-border  relevance.  Significant  investments  will  be  required  at 
decentralised and local level (including for smart grids), in energy efficiency, renewables 
etc. 

For the digital sector, the figure illustrates investment needs to reach EU's connectivity 
targets,  i.e.  gigabit  connectivity  for  all  main  socio-economic  drivers,  high  performance 
5G connectivity –in particular uninterrupted 5G coverage of all major terrestrial paths – 
and access to at least 100Mbps for all European  households. The combined investment 
needed to meet the Gigabit Society connectivity objectives by 2025 has been estimated at 
EUR 500 billion, for which an additional EUR 155 billion is required over and above a 
simple continuation of the trend of current network investment and modernisation efforts. 
An improved regulatory environment, as well as an increased exploitation of synergies, 
are  expected  to  reduce  this  investment  gap.  It  should  be  noted  indeed  that  important 
synergies  can  be  achieved  between  the  deployment  of  5G  and  of  other  (mostly  fixed) 
connectivity networks. A dense 5G network reaching all urban areas and major transport 
paths  –  based  on  backhaul  fibre  to  the  5G  cells  -  will  also  benefit  the  deployment  of 
wider networks for connectivity of both households and socio-economic drivers located 
in  less  densely  populated  area,  e.g.  by  bringing  the  fibre  network  closer  to  homes  as 
domestic  and  enterprises’  needs  and  demand  evolve.  Nevertheless,  a  significant 
infrastructure  investment  gap  to  reach  the  EU's  objectives  is  expected  to  persist  after 
2020, spread throughout  the entire territory of the EU. Given the size of the challenge, 
EU support must be complementary, targeted and efficient, making the most of limited 
public resources. 

It  is  important  to  note  that  with  regard  to  digital  infrastructure,  all  projects  supported 
have cross-border characteristics and cross-border effects. Notably, the current legal base 
for  CEF  Telecom  does  not  distinguish  between  cross-border  projects  and  projects 
implemented  entirely  within  one  Member  State.  Due  to  the  architecture  and  way  of 
functioning  of  Internet  connectivity,  any  local  deployment  is  part  of  a  trans-European 
digital network and has cross-border impact. Moreover, by addressing local connectivity 
problems  at  the  EU  level,  in  a  coordinated  and  timely  manner,  the  scale  and  network 
effects  are  maximised.  Nevertheless,  in  view  of  the  limited  resources  available  and  in 
order  to  maintain  the  key  features  of  the  CEF  programme,  it  is  important  to  prioritise 
digital investments on the projects that are considered to have most impact on the Digital 
Single Market and the highest EU benefit. “Local is global": the current experience of the 
Wifi4EU,  of  an  otherwise  purely  local  character  as  regards  physical  location,  should 
demonstrate,  thanks  to  its  foreseen  roaming  functionality,  the  mechanism  to  build  a 
network effect at EU level, underpinning the digital economy. Similar initiatives can be 
replicated  for  socio-economic  drivers,  which  are  local  but  underpin  e-health,  e-
government, and enhanced digital skills. By their location and function, they should be at 
the  forefront  of  digital  connectivity,  driving  the  digitalisation  of  public  services  and 
producing  important  socio-economic  spillovers.  Acting  at  EU  level,  due  to  scale  and 
timing produces an effect which could not be achieved at national or regional level and, 

34 Only PCIs providing significant externalities such us innovation, security of supply or solidarity are eligible for 
grants for works under CEF-energy. To date the innovativeness was the key driver behind grants amounting to at 
least 25% of the overall granted amount. 

15 

 
 
 
                                                            
moreover,  avoids  increasing  territorial,  social  and  economic  discrepancies  associated 
with digital divides. 

The  revised  scope  CEF  Digital  programme  is  then  aimed  at  ensuring  a  more  effective 
intervention  in  the  sense  of  a  stronger  alignment  with  EU's  strategic  connectivity 
objectives,  including  by  selecting  priority  areas  of  intervention  that  are  currently  not 
covered  by  public  funding  programs  or  that  are  best  suited  to  be  covered  under  CEF. 
CEF  has  indeed  a  proven  track  record  concerning  the  timely  delivery  of  cross-border 
deployments  or  of  projects  with  strong  cross-border  effects,  as  well  as  the  support  to 
projects  that  can  be  delivered  with  only  small  grant  components,  which  also  maximise 
private participation to projects. This prioritisation, along with further eligibility criteria 
making sure that the risk of market distortion is minimised, further described in Annex 4, 
are  reflected  in  the  new  CEF  Regulation.  Finally,  it  is  of  utmost  importance  that  the 
reinforced intervention in the area of digital connectivity is reflected also in the allocated 
budget, in order to enable its effectiveness.  

Compared to the overall investment needs, CEF will focus on a limited part relating to 
public goods of European dimension that  would not  be realised  at  national, regional or 
local level without EU support. More specifically, the programme will steer public and 
private finance towards EU policy objectives, enabling action where the costs are borne 
at national/local level and the benefits are tangible at European scale, and will accelerate 
the shift to a low-carbon and digital economy, while contributing to economic, social and 
territorial cohesion. 

Without  this  targeted  support,  the  possibility  to  achieve  the  EU  policy  objectives  to 
complete  Trans-European  Networks  in  transport35,  energy  and  digital  area  would  be 
limited. Significant delays would occur and the completion of strategic projects would be 
at  risk.  Projects  already  started  would  slow  down  or  stall,  leading  to  a  partial  loss  of 
benefits from previous investment and EU support.  

This would notably be the case for the deployment of smart systems such as SESAR and 
ERTMS  and  for  major  transport  projects  as  illustrated  in  the  recent  Communication  "A 
new,  modern  Multiannual  Financial  Framework  for  a  European  Union  that  delivers 
efficiently on its priorities post-2020"36: 

"Other examples of the negative effects of delays in agreeing a new financial framework 
include Rail Baltica. The project will build a crucial railway link into the Baltic States 
and  should  be  completed  by  2025/2027.  The  project  must  be  able  to  launch  the  major 
procurements  it  needs  for  construction  in  2021.  This  is  crucial  for  the  completion  of  a 
project  that  will  help  connect  five  million  people  in  the  Baltic  States  to  the  rest  of 
Europe. The high-speed rail link will cater at the same time for freight flows all the way 
from Finland to Germany, the Benelux and the Adriatic.  

The Brenner base tunnel is planned to be completed by 2027, with the rail engineering 
works  due  to  start  under  the  next  MFF.  It  is  a  crucial  project  to  shift  half  of  the  2.2 
million  trucks  of  the  Brenner  motorway  to  rail.  This  will  cut  down  on  pollution  in  the 
precious valleys between Munich-Innsbruck and Verona.  

35The achievement of the TEN-T core network and its corridors is expected to generate additional EUR 4,500bn or 

1.8% of GDP and 13 million additional job-years by 20302 (Delivering TEN-T, Facts & Figures, 
https://ec.europa.eu/transport/sites/transport/files/delivering_ten_t.pdf, September 2017) 

36 COM(2018)98, 14.2.2018 

16 

 
  
 
 
 
 
 
                                                            
The  Fehmarn  Belt  between  Denmark  and  Germany,  the  Evora-Merida  railway  link 
that  will  finally  connect  Lisbon  and  Madrid,  the  Lyon-Torino  base  tunnel  that  will 
connect  the  high-speed  railway  networks  of  France  and  Italy  are  also  all  due  to  be 
completed by the end of the next Multiannual Financial Framework. " 

A lack of EU support would also put at risk major energy cross-border interconnections, 
including those necessary to reach the electricity interconnection targets, deployment of 
electricity  interconnectors  which  are  crucial  for  integrating  markets,  enabling  more 
renewables  in  the  system  and  benefiting  from  their  different  demand  and  renewable 
supply  portfolio,  off-shore  wind  networks  and  smart  grids,  de-synchronisation  of  the 
Baltic  electricity  grid,  integrating  all  countries  into  a  liquid  and  competitive  energy 
markets.  

The  connectivity  targets  as  set  in  the  Gigabit  society,  which  are  a  pre-condition  for  a 
functional  Digital  Single  Market,  would  also  not  be  reached  without  further  targeted 
support.  In  particular  those  projects  with  the  strongest  cross-border  characteristics  and 
with the highest expected impact on the Digital Single Market, such as the deployment of 
5G corridors and the digitalisation of energy and transport networks, would be impacted. 
The  viability  of  the  anticipated  next  generation  digital  services,  such  as  Internet  of 
Things  services  and  applications  that  are  expected  to  bring  significant  benefits  across 
various  sectors  and  for  society  as  a  whole,  will  require  uninterrupted  cross-border 
coverage with 5G networks, in particular in view of allowing users and objects to remain 
connected  while  on  the  move.  However,  the  cost  sharing  scenarios  for  5G  deployment 
across these sectors remain unclear, and the perceived risks of commercial deployment in 
some  key  areas  are  very  high.  Road  corridors  and  train  connections  are  expected  to  be 
key areas for  the first  phase of new applications  in  the field of connected mobility and 
therefore  constitute  vital  cross-border  projects  for  funding  under  this  Programme.  The 
aim  in  to  deliver  "5G  corridors",  meaning  full  coverage  with  5G  systems  of  transport 
path,  road  or  railway,  particular  5G  systems,  enabling  the  uninterrupted  provision  of 
synergy  digital  services  such  as  connected  and  automated  mobility  or  similar  smart 
mobility services for railways. At a more general level, the absence of a realignment of 
interventions for all programmes supporting broadband deployment, including ESIF and 
InvestEU, would lead to a situation where many areas throughout the EU would remain 
unconnected,  with  untapped  potential  for  the  digital  economy  but  also  for  smart  public 
services. 

Overall, a reduced CEF budget would require policy choices between the completion of 
the  TEN  networks,  the  possibility  to  better  address  their  evolution  in  relation  with  the 
energy and digital transition, and to build –up significant synergies on emerging topics as 
illustrated in the following second and third challenges.  

Second challenge: the energy transition and technological developments in the transport, 
energy and digital sectors 

While CEF makes a strong contribution to climate change actions and decarbonisation of 
infrastructures37,  this  is  insufficient  in  view  of  a  growing  need  to  invest  directly  into 

37  90%  of  CEF  funding  dedicated  to  transport  supported  green  modes  of  transport,  while  approximately  48%  of  the 
CEF  electricity  budget  allocated  so  far  has  contributed  to  projects  contributing  directly  to  reduction  of  CO2 
emissions (electricity projects; gas projects not taken into account) 

17 

 
 
 
 
 
 
 
                                                            
innovative 

technologies,  notably 

in  mobile  equipment,  for 

rolling  out  of 
the 
decarbonisation  of  the  land  and  maritime  transport  in  line  with  Europe’s  transition  to 
low-emission38 and climate resilient mobility and EU commitments entered in the scope 
of the Paris Agreement.39 This requires the roll-out of infrastructure for alternative fuels, 
as  well  as  enhancing  climate  resilience  during  planning,  design,  construction  and 
operation of infrastructures. The challenge of transitioning to a low carbon and climate 
resilient  economy  was  the  highest  ranked  issue  in  the  public  consultation  for  both  the 
transport and the energy part (with 98% and 94 % of respondents respectively).  

The  Alternative  Fuels  Infrastructure  Directive40  addresses  the  provision  of  common 
standards  on  the  internal  market,  the  appropriate  availability  of  infrastructure  and 
consumer information on the compatibility of fuels and vehicles. Based on this Directive, 
Member  States  were  requested  to  design  policy  frameworks  for  rolling-out  publicly 
available  electric  recharging  points  and  natural  gas  filling  stations,  and  optionally 
hydrogen filling stations. In order to achieve mass acceptance and deployment of electric 
vehicles,  charging  and  maintenance  infrastructure  needs  to  become  widely  available 
throughout  Europe.  While  in  the  current  CEF  framework,  a  target  of  5%  of  the  CEF 
Transport  budget  is  dedicated  to  innovation  in  low  carbon  transport,  and  proved 
successful  in  starting  to  deploy  such  infrastructures  this  will  have  to  be  scaled  up 
substantially in order to meet future needs. For instance, the Commission's proposal for 
post-2020 CO2 targets for cars and vans 41 implies that a substantial share of the vehicle 
fleet  in  2030  will  be  electric  (plugin  hybrid  or  full  electric).  Similarly,  in  light  of 
technological advancements, digitalisation and innovation requires intensifying support. 

In  the  energy  sector,  the  recent  Communication42  on  strengthening  Europe's  energy 
network  recognises  that  electricity,  where  renewables  will  constitute  half  of  the 
electricity generation by 2030, will increasingly be driving the decarbonisation of sectors 
so  far  dominated  by  fossil  fuels,  such  as  transport,  industry  and  heating  and  cooling. 
Therefore  the focus  will need  to  be  on the reinforcement of the electricity transmission 
and distribution grids, digitalisation and smartening of the grids and deployment of new 
infrastructure  solutions,  particularly  in  the  electricity  storage  area,  and  the  impact  of 
self-consumption." It is important to recognise that innovation is already one of the three 
main  drivers  (externalities)  which  can  justify  CEF  energy  grants  for  works  (within  the 
framework  of  the  TEN-E  guidelines).  To  date  the  energy  envelope  of  CEF  enabled 
several  important  highly  innovative  projects  such  as  SincroGrid,  Biscay  Bay  HVDC 
connection, gas deodorisation technology (these three totalling to EUR 0.629 billion, i.e. 
more than 25% of the overall budget allocated to date). It is, however, clear that in view 
of  the  investment  challenge  and  the  transformational  (hence  increasingly  innovative, 
first-of-the-kind43)  character  of  the  planned  projects  there  is  insufficient  funding  in  the 
market  alone.  Public  budget  support  will  be  indispensable  to  facilitate  and  de-risk  the 

38  Communication from the Commission "A European Strategy for Low-Emission Mobility" COM(2016)501 
39  In  the  case  of  transport  for  example,  this  is  reflected  in  the  2011  White  Paper.  In  addition,  commitments  of  the 
United  Nations  Climate  Change  Conference  (COP  21)  calls  upon  the  achievement  of  60%  greenhouse  emission 
reduction target in the area of transport 

40  Directive 2014/94/EU. 
41 https://ec.europa.eu/clima/policies/transport/vehicles/proposal_en  
42 Communication from the Commission COM(2017) 718 of 23 November 2017 
 http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1511977964680&uri=CELEX:52017DC0718 
43 E.g. transformer station solutions required off-shore, which have unprecedented design  

18 

 
 
 
                                                            
take-up  of  such  innovation  in  the  networks  sector44  and  to  enable  system  operators  to 
invest substantially higher volumes than they (both through their balance sheets and their 
regulated  asset  bases)  are  used  to,  including  on  sector  integration  beyond  energy.  As 
innovation  will  be  necessary  along  the  full  value  chain,  the  complementing  enabling 
instrument  for  cross-border  projects  in  the  field  of  renewable  energy  will  promote 
innovation aspects beyond the transmission network.  

The  extension  to  cover  cross-border  projects  in  the  field  of  renewable  energy  happens 
against  a  new  political  context  of  more  Europeanisation  of  efforts  in  this  area  and  the 
increasing  focus  on  renewables  within  existing  intergovernmental  groupings  on  energy 
matters. In addition to benefits stemming from a more coordinated approach45 , there are 
potential cost savings to be reaped from coordinated grid and RES deployment, reduced 
overall  investment  and  back  up  needs  as  documented  in  various  studies46.  The  EU  is 
entering  a  new  scale  in  terms  of  RES  electricity  deployment  (almost  50  %  of  EU 
electricity in 2030 will be from RES) and complementing regional transmission network 
planning  with  a  more  regional  approach  to  planning  of  renewables  can  further  help 
optimising the energy systems. While renewable electricity costs (particular for wind and 
photovoltaics) have significantly decreased in the last years and these technologies start 
becoming competitive, there is a need of tapping the potential of cross-border projects to 
further  decrease  production  costs  (=  total  generation  and  grid  development  costs)  and 
incentivise  sector  coupling  (where  the  electricity  producing  sector  is  developed  in  an 
integrated manner with the energy end use sectors such as transport).  

In  the  digital  sector,  the  demand  for  network  data  will  increase  exponentially  with  the 
advance of the Internet of Things, bringing at the same time major benefits across sectors 
and  across  borders.  For  example,  the  benefits  of  the  deployment  of  5G  networks  have 
been  estimated  at  EUR  113  billion  per  year  across  for  industrial  sectors  (automotive, 
health, transport and energy), while the cost sharing scenarios across these sectors remain 
unclear and the perceived risks of commercial deployments, very high. Other examples 
of exponential need for data concern the smart home market, which is expected to grow 
at a compound annual rate of 57% in the next five years, or the healthcare sector, where 
major  savings  can  be  realised  -  but  only  to  the  extent  that  high  capacity  connectivity 
covers not only major hospitals, but also smaller medical centres and homes of patients 
living with chronical conditions. Beyond this, measures need to be employed to control 
both the amount and the type of energy required to fuel that demand. In particular, it will 
be  necessary  to  support  appropriate  solutions  for  the  growing  number  of  data  centres 
migrating from single enterprise/institution to co-location and cloud data centres, which 
will  operate  through  a  steadily  increasing  number  of  sites  across  different  countries.  In 
addition, future trends, including the advance of the Internet of Things (IoT) may support 
the development of small and distributed data centres with many of the features of Cloud 
data centres. 

44 Considering the cross-border/EU relevance of PCIs in these sectors, EU level instrument, i.e. CEF, is best placed to 

provide such support 
45 SWD (2016)0418 final.  
46 See Annex 3 for more details  

19 

 
 
 
 
 
 
 
 
                                                            
Third challenge: Better coordination with other EU programmes and better exploitation 
of synergies within CEF 

Transport, energy and telecommunications infrastructure is supported to various degrees 
by  a  number  of  EU  financial  programmes  and  instruments,  including  CEF,  ESIF, 
Horizon  2020  and  EFSI.  CEF  is  for  the  most  part  complementary  with  these  other  EU 
financial  interventions;  however,  this  complementarity  bears  the  risk  of  overlap  with 
implications  to  TENs  policy  and  overall  EU  budget.  Consequently,  for  the  new  CEF 
programme, the distinction from other EU financing programmes is a key requirement in 
order  to  maintain  and  promote  clear  objectives  of  the  programme,  avoid  overlaps  and 
optimise budgetary resources. 

Complementarity with ESIF 

The  European  structural  and  investment  funds  comprise  the  European  regional 
development  fund  (ERDF),  the  European  social  fund  (ESF),  the  Cohesion  fund,  the 
European agricultural fund for rural development (EAFRD) and the European maritime 
and  fisheries  fund  (EMFF).  The  current  ESIF  mainly  focus  on  five  areas:  research  and 
innovation,  digital  technologies,  supporting  the  low-carbon  economy,  sustainable 
management of natural resources and small businesses. Both the Cohesion fund and the 
ERDF fund actions in the transport, energy and digital sectors with the ERDF aiming to 
promote balanced development in the different regions of the EU and the Cohesion Fund 
funding transport and environment projects in countries where the gross national income 
(GNI) per inhabitant is less than 90% of the EU average. All of these funds are managed 
by the EU countries themselves, by means of partnership agreements. 

Building on the first experience of directly managing a EUR 11.3 billion CEF envelope 
from  the  Cohesion  fund  for  transport,  the  challenge  is  to  better  delineate  the  scope  of 
both instruments in order to render them more complementary. Investments on the TEN-
T Network are currently supported by CEF, the Cohesion Fund and ERDF.  

The overlap between these instruments in the field of transport is limited by the narrower 
eligibility perimeter of CEF, in particular by its focus on railways and inland waterways 
while  ESIF  also  covers  important  investments  in  the  road  sector.  In  addition,  CEF 
resources are concentrated on the core network, while ESIF covers both the core and the 
comprehensive networks amongst other transport infrastructure. 

Complementarity is pursued through: 

 
 

 

the national programming of regional instrument at the beginning of the period; 
the transfer to CEF of a EUR 11 billion share of the Cohesion Fund (entirely 
allocated, positive feedback from stakeholders and concerned Member States); 
the participation of DG REGIO in the CEF selection panels and in project specific 
task forces. 

However,  as  evidenced  in  the  CEF  mid-term  evaluation,  there  is  significant  overlap 
between  CEF  and  ESIF  for  railway  projects  on  the  core  network.  In  the  period  2014-
2020,  CEF  financing  for  railway  projects  on  the  core  network  is  expected  to  reach 
approx. 16 billion, while Cohesion Fund and ERDF financing to railway projects on the 
core network are respectively expected to reach EUR 5.3 billion and EUR 2.5 billion. In 
certain  cases,  different  sections  of  the  same  railway  line  are  financed  by  different 
instruments as a result of optimising strategies of Member States and promoters.  

20 

 
 
 
 
 
 
 
In addition to the lack of clarity concerning the scope and results of each programme, this 
situation  means  that  project  promoters  have  to  adapt  to  different  administrative 
frameworks, rules and reporting schemes with all additional costs associated.  

For example, CEF and ESIF large infrastructure projects have different rules as regards 
the maturity of projects and application requirements. As regards maturity, major projects 
under ESIF need as a minimum to have a binding environmental permit to be eligible for 
support, whereas this is not a requirement for the CEF projects, as maturity is assessed by 
the Commission during the evaluation process. Furthermore, the application requirements 
slightly  differ,  for  example,  ESIF  major  projects  have  to  take  additionally  into  account 
climate  change  adaptation  and  mitigation  needs.  The  results  of  the  public  consultation 
show that the stakeholders expect fewer rules and more aligned rules. Hence, the above 
differences should be reduced where possible and only be maintained where justified by 
the different management mode.  

In the case of energy transmission, the areas of intervention for CEF and ESIF have been 
designed with a view to avoiding overlaps. CEF which stems from the Trans-European 
Network  article  of  the  Treaty  concentrates  on  cross-border  relevant  transmission  assets 
and  energy  storages,  CO2  transportation  as  well  as  transmission  grid  smartening  and 
pioneering  smart  grids  in  interface  between  transmission  and  distribution  networks47. 
ESIF, in turn, covers gas and electricity transmission which is not identified as PCI (i.e. 
of  national  and  regional  relevance  only48),  investments  in  distribution  networks  and  in 
particular  in  increasing  theses  networks’  intelligence.  The  objective  is  to  continue  with 
this clear delineation of responsibilities between CEF and ESIF also recognising that the 
latter  would  increasingly  focus  on  accompanying  the  CEF  enabled  investments  in 
transmission  assets,  the  backbone  and  integrating  element  for  the  transformation  of 
energy  systems,  with 
in  regions  and 
municipalities (such as local RES storages, reinforcement of distribution and distributed 
renewable  generation).  For  the  extension  of  scope  towards  cross-border  cooperation  in 
renewable energy, the demarcation line will be similar: ESIF will continue to fund RES 
at  urban  and  regional  level,  including  through  bordering  regions  assistance  via 
INTERREG, whilst the new programme specifically supports two Member States getting 
together in planning and roll-out.  

the  decarbonisation-enabling 

investments 

There are currently very limited overlaps in the digital field due to a different scope of 
intervention  and  current  limitations  for  broadband  under  the  current  CEF,  i.e.  the  low 
budget  and  the  exclusive  use  of  financial  instruments.  For  the  upcoming  period,  it  is 
foreseen  that  CEF  and  ESIF  will  provide  complementary  and  coherent  support  to 
reaching EU's strategic connectivity objectives, while having different focuses, reflected 
in the eligibility criteria set out in the CEF Regulation. CEF will focus on projects with 
cross-border  and  cross-sector  dimensions,  which  would  benefit  from  a  coordinated 
approach  at  EU  level  (such  as  CAD/5G  corridors,  submarine  cables,  the  Internet  of 
Energy,  green-ICT,  connectivity  for  health  etc.);  on  covering  socio-economic  drivers 
across  the  EU  with  Gigabit  connectivity  as  well  as  local  communities  with  very  high 
quality  wireless  connectivity  for  citizens  and  visitors;  and  on  supporting  broadband 

47 The identification of Projects of Common Interest that are subsequently eligible for CEF is done under the strict 

criteria set out in TEN-E guidelines regulation (347/2013) which guarantees that the programme focused on projects 
with the highest EU added value. 

48 Even though during the negotiations of the legal bases for ERDF for 2014-2020 the explicit ban on financing of 

TEN-E assets was abandoned, in practice only two countries programmed investments in TEN-E gas and electricity 
and only for very few specific projects  

21 

 
 
 
                                                            
rollout  in  areas  where  a  market  failure  is  observed,  but  where  a  limited  public 
intervention can ensure commercial viability. On the other hand, it is expected that ESIF 
will  focus  on  connecting  areas  with  more  severe  market  failure,  where  high  intensity 
grants and public promoters remain necessary.  

In terms of EU's connectivity targets as set out in the Gigabit Society Strategy, CEF will 
mostly support objectives regarding the main 5G corridors and the connectivity of socio-
economic drivers and local communities, while both CEF and ESIF will contribute in a 
complementary manner - depending on the characteristics of each individual project to be 
funded  in  different  areas  -  to  reach  the  objective  regarding  ubiquitous  coverage  of 
households  with  high  capacity  broadband  networks.  CEF  is  indeed  specifically 
appropriate  for  pan  European/cross-border  projects,  but  also  for  targeted  and  efficient 
interventions, pushing the footprint of private investments to cover as much geography as 
possible. CEF has indeed a proven record of use of financial instruments and blending, 
and  this  experience  is  useful  in  ensuring  coverage  of  areas  where  only  a  low  intensity 
grant can render a project viable. Ensuring that such resource-efficient interventions are 
done  via  CEF  also  allows  ESIF  to  reach  further  territories  with  deeper  market  failures, 
such  as  peripheral  or  sparsely  populated areas. At  the  same  time,  the  eligibility  criteria 
for  CEF  interventions  will  ensure  that  the  supported  projects  do  not  lead  to  market 
distortion  or  crowding  out  private  investments,  inter  alia  by  taking  into  account 
therefore,  ensuring 
investments  by  private  operators.  Such  delineation  remains 
consistency with state aid principles. Further mechanisms to ensure complementarity will 
be put in place, at the level of national programming of ESIF and at the selection level. 

Complementarity with Horizon2020 

Horizon  2020  is  the  EU  Research  and  Innovation  programme  for  2014  to  2020, 
implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing 
Europe's  global  competitiveness.  The  goal  is  to  ensure  Europe  produces  world-class 
science,  removes  barriers  to  innovation  and  makes  it  easier  for  the  public  and  private 
sectors to work together in delivering innovation. The successor programme (Framework 
Programme 9) will be known as Horizon Europe. 

Systemic yet underexploited synergies exist in the area of research and innovation. For 
example, while the scope of Framework Programmes is focused on supporting research 
and  innovation,  including  technology  development  and  prototype  demonstration,  the 
CEF  scales  it  up  to  the  level  of  development  of  new  business  cases  and  results  in  a 
broader  and  faster  market49  deployment  of  innovative  technologies,  covering  market 
risks, in the three sectors of transport, energy and telecommunications.  

Options  in  harnessing  complementarity  at  the  level  of  projects  or  financing  solutions 
should  take  into  account  the  market  maturity,  alignment  of  timeline  and  scope  of  the 
researched product and the readiness to deploy that product, in order to cover the full life 

49 It is important to note that CEF support allows promoters of energy transmission projects opt for innovative solutions 

(to system problems) which might not be otherwise approved by the (conservative and cost conscious) national 
regulators. This makes CEF supported grids more suitable test-beds for the outcome of EU research than average 
transmission assets. 

22 

 
 
 
 
 
 
                                                            
cycle.  It  is  furthermore  important  to  ensure  a  cross-dissemination  of  the  know-how 
accumulated on the supported projects50 and of the results of the overall programmes. 

Complementarity with Digital Europe Programme 

The  new  CEF  programme  will  provide  the  physical  infrastructure  for  digital  services 
supported  by  the  Digital  Europe  Programme  that  is,  the  infrastructure  necessary  to 
support  the  digital  transformation  of  industry,  economy,  public  administration  and 
society at large. On the other hand, Digital Europe, in general, will provide the service 
ecosystem  that  will  make  the  infrastructure  rentable  and  used.  For  example,  Digital 
Europe will ensure and build the Cybersecurity capacity required for the deployment and 
functioning of trusted and secure infrastructure, and it will deploy the Services of Public 
Interests that need a connected society to be used at their full  potential. Clear synergies 
exist  and  will  need  to  be  exploited,  by  taking  into  account  specific  area’s  needs  and 
timeline alignment.  

Therefore, it is  clear that, contrary to what  has  been  done in the current  MFF, the new 
CEF  will  not  provide  support  to  the  deployment  of  digital  services  in  areas  of  public 
interest, as this will be done within the scope of the new Digital Europe Programme. The 
envisaged  extension  of  scope  is  to  widen  connectivity  coverage  to  reach  new 
stakeholders thus making (cross-border) digital services accessible to an enlarged users’ 
community. 

Complementarity with EFSI/"InvestEU" 

The European Fund for Strategic Investments (EFSI) is an initiative launched jointly by 
the  European  Commission  and  the  EIB  Group  –  the  European  Investment  Bank  and 
European Investment Fund –to help overcome the current investment gap in the EU. In 
order to  enhance complementarity with  EFSI,  the Commission took action to reorient51 
the  CEF  Debt  Instrument  to  innovative  EU  pilot  programmes,  which  has  yielded  some 
significant52 room for complementarity, and further work is planned to re-orient the CEF 
Debt  Instrument  to  support  the  deployment  of  alternative  fuels  and  PCIs  in  third 
countries.  

It  is  expected  that  financial  instruments  will  play  an  important  role  in  delivering 
investments in the transport, energy and digital sectors and that for the next programming 
period they will be available under the InvestEU programme. Financial instruments are 
considered particularly relevant to support broadband deployment, complementary with 
the interventions via grants and blending. Concretely, it is proposed that InvestEU would 
provide:  (i)  guarantees  for  more  mainstream  broadband  investments,  with  the  aim  to 
steer,  de-risk,  and  accelerate  investments  in  the  newest  technologies;  while  (ii)  special 
purpose  vehicles/thematic  instruments,  with  the  aim  to  overcome  persistent  issues  of 
access to finance. Contrary to CEF, whose intervention is clearly steered towards market 
failure  areas,  InvestEU  support  is  not  expected  to  reach  on  its  own  commercially 

50 There were several research projects under H2020 which resulted in improved processes and technologies actively 

used by electricity and gas transmission system operators (e.g.iTESLA) 

51 Following an agreement by the Commission and the EIB in the scope of the CEF Steering Committee in September 

2015 

52 The Green Shipping Guarantee Programme benefits from dual support of both the EFSI and the CEF Debt 

Instrument, with potential to mobilise up to EUR 3 billion of investment. 

23 

 
 
 
 
 
 
 
                                                            
unattractive  areas,  being  rather  focused  on  maximising  the  commercially  viable 
deployments. 

As these types of intervention are, however, likely to be covered by the “InvestEU”, this 
would  then  eliminate  the  issue  of  complementarity  between  different  financial 
instruments in different programmes.  

Consequently, the complementarity between the CEF grants and the InvestEU will relate 
to: 
 

the intervention logic (CEF grants only where support through financial instruments 
is not sufficient/possible); 
the possibility to use CEF grants blended with InvestEU (or other private financing). 

 

Synergies within CEF 

The mid-term evaluation of CEF illustrated that the potential of CEF as a joint instrument 
for  three  sectors  has  not  been  fully  exploited.  Infrastructures  such  as  EV  charging 
stations, energy storage and smart grids often combine and operate at the intersection of 
transport, energy storage and digital infrastructures, but so far, CEF has not been able to 
sufficiently address this in an integrated way. The EU's commitments on decarbonisation 
will imply a growing role for sector coupling, i.e. infrastructure where power generation 
and storage and end-use sectors are interlinked.  

One CEF Synergy Call has been launched covering the sectors of transport and energy, 
yielding  limited  results.53  The  CEF  Transport  Call  2018  will  focus  on  horizontal 
priorities under an overall "digitalisation" umbrella coordinated in close proximity with 
CEF  Digital  calls.  For  2018,  CEF-telecom  plans  to  explore  cross-sector  activities  with 
CEF-energy  and  CEF-transport  under  Cybersecurity  applied  to  the  area  of  cooperative, 
connected and automated mobility and well as to the Internet of Energy. However, at the 
time of publication of this Impact Assessment, results were still unknown. Meanwhile, a 
substantial  number  of  indirect  synergies  have  been  identified  indicating  that  they  are 
happening by default, but go uncaptured:54 

  Energy Union and its priorities identified in the recent Communication "Accelerating 
Clean  Energy  Innovation55:  such  as  alternative  fuels,  low-carbon  solutions  and 
innovative systems (energy-transport-digital-climate-maritime); 

  Alternative  fuels  charging  infrastructure  can  involve  transport  infrastructure,  power 
network,  and  digital  investments  aspects.  Currently,  restrictive  selection  criteria 
constitute barriers to invest in such technologies; 

  Digital Single Market, such as data, infrastructures/processing capabilities, automated 

driving vehicles, e-mobility, ERTMS (transport-digital-energy); 

  Regional, such as enhanced interconnectivity at urban nodes (transport-regional) 

53 7 out of 9 innovative studies were recommended for funding for about EUR 24 million, falling short of the available 
EUR 40 million. As the first step it is encouraging since this call involved rather complex synergy between transport 
and energy, providing lessons for the future 

54  36  CEF  transport  actions  with  a  total  value  of  EUR  220  million  in  funding  awarded  as  enabling  synergies  with 
energy. Additional data show that 10 actions in CEF Energy for a total value of EUR 45 million are contributing to 
the enablement of synergies with transport. 

55 COM(2016)763 final  

24 

 
 
 
 
 
 
 
                                                            
  Research and Innovation, as well as Energy Union, such as urban energy efficiency 

(transport-digital-energy-research); 

The challenge for this programme is how best to support projects including through the 
proposed scope extensions delivering benefits which are in line with policy objectives of 
more than one CEF sector. 

2.2  Objectives of the programmes for the next MFF 

General objective of the programme 

The overarching objective of the future CEF is to support the achievement of the EU policy 
objectives  in  the  transport,  energy  and  digital  sector,  as  regards  the  trans-European 
networks, by enabling or accelerating investments into projects of common interest, and to 
support transnational cooperation on renewables planning and deployment in line with EU 
long-term climate and sustainable development goals. It will aim at maximising synergies 
among the sectors covered by the CEF and with the other EU programmes. 

The  future  CEF  should  thus  contribute  to  the  EU  policy  objectives  detailed  in  the  table 
below.  

Supporting the EU policy objectives beyond 2020 
►  Completion  of  the  TEN-T  Core  Network  by  203056,  including  the  deployment  of 
SESAR  and  ERTMS,  and  transition  towards  clean,  competitive  and  connected 
mobility57,  the  low-carbon  transition  through  innovative  infrastructure  including  an 
EU backbone of charging infrastructure by 2025; progress towards the completion of 
the TEN-T comprehensive network by 2050. 

►  Completion of the TEN-E priority corridors and thematic areas58, in alignment with 
“Clean Energy for all Europeans59 objectives, to ensure the functioning of the Union 
internal energy market, provide security of supply (inter alia through smartening and 
digitalisation  of  the  infrastructure)  and  contribute  to  sustainable  development  and 
climate  objectives  by  integrating  renewable  energy  sources  and  enabling  a  cost-
effective collective target achievement by 2030 

►  Achieving  the  digital  connectivity  infrastructure  of  a  Gigabit  society60,  as  a 
underlying condition for a functional digital single market61, as well as providing the 
necessary  infrastructure  to  properly  support  the  EU-wide  digital  transformation  of 
economy and society.  

56 Regulation No 1315/2013 on Union guidelines for the development of the trans-European transport network, Art 38 
57 COM(2017)283 Communication from the Commission "Europe on the move - An agenda for a socially fair  
 transition towards clean, competitive and connected mobility for all" 
58 Regulation (EU) 347/2013 on guidelines for trans-European energy infrastructure 
59 COM(2016) 860 final 
60 i.e. Gigabit connectivity for all main socio-economic drivers , High performance 5G connectivity, access to Internet 

connectivity offering download speed of at least 100 Mbps, upgradable to Gigabit speeds for all European 
households, including rural ones, cf Connectivity for a Competitive Digital Single Market - Towards a European 
Gigabit Society - COM(2016)587 

61 A Connected Digital Single Market for All: COM(2017) 228 final 

25 

 
 
 
 
 
 
 
 
                                                            
Specific objectives of the programme 

CEF aims to ensure the development of high-performance infrastructure connecting and 
integrating the Union and all its regions, in the transport, energy and digital sectors while 
contributing to the energy transition and technological advancement in these sectors. In 
light of this and on the basis of the challenges previously defined, the general objective 
of  CEF  can  be  translated  into  specific  objectives  for  each  of  the  three  sectors.  These 
specific  objectives  will  be  addressed  at  the  level  of  programme  structure  and  priorities 
and/or delivery mechanism.  

Cross-cutting specific objectives 

  The programme should also address the cross-cutting objectives of the MFF for 
all  funding  programmes  in  terms  of  simplification,  flexibility,  coherence  and 
focus on performance. These objectives will be taken into account in section 4 
(delivery mechanism) and 5 (performance measurement). 

  For  synergies  between  the  three  sectors,  the  programme  should  be  sufficiently 
flexible  to  support  actions  at  the  crossroad  of  several  sectorial  objectives  and 
adapt the form and scope of synergies to technological development and market 
needs.  The  synergies  should  in  particular  result  in  a  more  efficient  and  cost 
effective implementation of specific projects. Initial synergy areas could include 
Cooperative, Connected and Automated Mobility (CCAM) along major European 
Transport paths, smart grids, the use of alternative  fuels and a better support for 
sector coupling in sectors that are end users of energy (such as electrification of 
transport),  as  well  as  an  optimised  grid  for  renewables,  Internet  of  Energy  and 
Green-ICT. Actions in one sector which also contribute to policy goals of another 
sector should also be encouraged and supported62. 

  As regards climate mainstreaming, CEF should, in line with the overall approach 
taken  in  the  next  MFF,  ensure  that  it  fulfils  its  potential  to  accelerate  the  low 
carbon and climate resilient transition, and that it does not invest in activities that 
are incompatible with the related EU policy.  

Sectorial specific objectives of the programme 

  Trans European Networks - Transport  

In  the  transport  sector,  the  specific  objectives  of  the  programme  are  twofold. 
First, the programme will aim at the development of projects of common interest 
relating  to  efficient  and  interconnected  transport  networks.  This  includes  the 
completion  of  major  cross-border  projects  and  the  removal  of  bottlenecks  and 
missing  links.  Priority  will  be  given  to  the  core  network  corridors,  with  the 
possibility to also support sections of the comprehensive network where justified 
(cross-border  projects).  Second,  the  programme  will  aim  at  modernising  or 
upgrading the transport infrastructure in order to allow for smart, sustainable and 
safe mobility. This includes the deployment of alternative fuel supply facilities, a 

62 For example, a lock co-funded under CEF transport that contains a small turbine that improves its socio economic 

case, could also receive co-funding for the turbine element. This element of the action would be ineligible under the 
current CEF (see section on synergies page 31). 

26 

 
 
 
 
 
 
 
 
                                                            
next  phase  in  the  deployment  of  the  digital  systems  like  ERTMS  and  SESAR, 
further initiatives relating to cooperative, connected and automated mobility, and 
actions  aiming  at  improving  safety  (notably  road  safety)  and  security  of  the 
transport infrastructure, as well as its resilience to climate change.  

  Trans European Networks - Energy 

Completion of the internal energy market through interconnections 
Sustainable  development  through  network  infrastructure  enabling  integrating 
renewable  energy  sources63  including  through  facilitating  cross-border  planning 
and deployment of renewables. 
Security of supply inter alia through smartening and digitalisation of the grids 

  Trans European Networks - Digital 

To contribute in an efficient and targeted way to reach the broadband connectivity 
targets  set  in  the  Gigabit  Society  Strategy[i.e.  Gigabit  connectivity  for  all  main 
socio-economic  drivers ,  High  performance  5G  connectivity,  access  to  Internet 
connectivity offering download speed of at least 100 Mbps, upgradable to Gigabit 
speeds for all European households, including rural ones.].  
To  contribute  to  the  digitalisation  of  energy  and  mobility  networks  to  enable 
cross-border services in these two areas. 
To contribute to the resilience and capacity of EU digital networks by addressing 
international connectivity.  

3  PROGRAMME STRUCTURE AND PRIORITIES 

The table below summarises the main changes in scope for the new CEF programme. 

Main changes concerning the scope of the programme 

All sectors 

Transport 
(TEN-T) 

Energy  

Digital 

In 

Out 

Financial instruments 
transferred to InvestEU 

Scope unchanged – but more 
weight given to decarbonisation 
and digitalisation 
Scope unchanged for TEN-E 
Support to cross-border projects 
in the field of renewable energy  

Grant support to strategic 
connectivity 
infrastructure/redefined projects 
of common interest 

Digital Service Infrastructure 
(transferred to the Digital 
Europe programme) 

It  is  estimated  that  these  changes  of  scope  will  not  affect  more  than  10-15%  of  the 
programme budgetary allocations.  

63 And therefore contributing to decarbonisation of the energy systems and overall energy transition  

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
3.1  The core priorities remain focused on the trans-European networks 

Necessity for EU action 

On the basis of Article 171 of the TFEU, the Union is empowered to define projects of 
common interest in TENs infrastructure while leaving the Member States to choose the 
methods  of  implementation.  The  same  Article  empowers  the  Union  to  support  such 
projects of common interest.  

A  legal  basis  for  the  extension  to  renewables  is  provided  by  Article  194  TFEU  that 
explicitly  lists  the  promotion  of  renewables  as  one  of  the  objectives  of  EU  energy 
policies.  In  addition,  Article  3(4)  of  the  recast  Renewables  Directive  stipulates  "the 
Commission  shall  support  the  high  ambition  of  Member  States  through  an  enabling 
framework  comprising  the  enhanced  use  of  Union  funds,  in  particular  financial 
instruments". 

EU action is necessary for the following reasons: 

  The scale of the problems being tackled specifically require EU action since they are 
by  nature  EU-dimensional,  and  can  be  more  efficiently  resolved  at  Union  level, 
leading to overall greater benefits, accelerated implementation and reduction of costs 
if Member States act together. 

  CEF was developed taking into consideration the impact of the decline in investment 
during  the  financial  crisis  and  thereafter,  when  long-term  bank  lending  was  scarce. 
Although  market  conditions  have  evolved,  the  investment  needs  in  TENs  beyond 
2020 exceed the resources at the disposal of several Member States. 

  Transport: public budgets are still under considerable fiscal consolidation, while the 
implementation  of  the  CEF  for  TEN-T  in  2014-2016  shows  that  financing  support 
from  Member  States  and  private  sector  continues  to  be  crucial  but  insufficient  for 
projects with European dimension.  

  Energy:  while  the  majority  of  projects  of  common  interest  can  be  financed  in 
principle by the market within the regulatory framework, EU support is indispensable 
for a number of projects because of their externalities (including innovation) and the 
investment volume exceeding capacity of the system to socialise the cost.  

  Renewables projects are also expected to  be increasingly  financed by the  market in 
the  future.  Potential  support  in  this  area  would  only  compensate  the  cost  for 
overcoming  barriers  associated  with  cooperation  beyond  borders  amongst  Member 
States and/or the barriers preventing sector integration.  

lead 

  Digital:  a  future-proofed  EU  economy  and  society  depends  heavily  on  the 
deployment  of  data  infrastructure  capable  of  supporting  the  development  of  new 
technologies, services and applications. Insufficient funding as well as missing links 
in  current  programmes 
in  broadband  connectivity 
infrastructure, which are a barrier to the achievement of the full potential of the EU´s 
digital economy. Digital  innovations and  services  –  including all Internet of Things 
services,  all  the  applications  and  implications  for  the  other  economic  sectors  and 
public services - can only emerge and flourish if Europe becomes a truly connected 
continent. Public support, and in particular EU action is required to ensure seamless 
connectivity across the EU, which will in turn lead to massive benefits across various 
economic sectors, as well as to increased cohesion across the continent. 

to  persistent  gaps 

28 

 
 
 
 
 
Added value of EU action 

CEF  provides  EU  added  value64  through  the  development  of  connectivity  in  transport, 
energy  and  telecommunications,  not  only  because  of  the  type  of  public  goods  with  a 
European dimension that it covers, but also because of its focus on projects that would 
not be realised without EU support.  

More specifically, the EU added value of CEF resides in its capacity to: 
  steer public and private finance towards EU policy objectives; 
  enable key investments where the costs are borne at national/local level whereas the 

benefits are tangible on a European scale; 

  accelerate the shift to a low-emission and digital society. 

In comparison with the total investment needs, EU CEF support focuses on actions that 
carry  the  highest  EU  added  value.  It  should  drive  the  alignment  of  major  new 
infrastructure investment in the EU to our long-term climate objectives, thereby reducing 
the risk of stranded assets. 

For  transport,  it  covers cross-border  sections  and  bottlenecks  on  the core  networks, the 
large scale deployment of traffic management systems and major new priorities such as 
alternative fuels, digitalisation, and overall safety and security. 

For  energy,  it  covers  infrastructure  projects  with  cross-border  relevance  in  electricity 
transmission  and  storage,  gas,  CO2  transportation  and  smart  grids  at  the  interface 
between  transmission  and  distribution  networks  (enabling  integration  of  data  flow 
between the various grid layers and reaching the energy consumers/prosumers) as well as 
increasing  the  intelligence  of  the  transmission  networks.  It  also  covers  targeted  cross-
border  projects  in  the  field  of  renewable  energy  deployment  and  planning  involving 
(funding) of at least two Member States65, possibly with accompanying storage facilities 
and connections to the transmission grid.  

For the digital sector, it covers the deployment of digital connectivity projects  expected 
to  have  a  high  impact  on  the  Digital  Single  Market,  inter  alia  through  their  alignment 
with the objectives of the Gigabit Society Strategy Communication, through strong cross-
border effects, and through synergies across sectors and with the digital services enabled. 
Projects are furthermore prioritised taking into account the advantages of realising them 
at EU scale, noting that on the one hand, some projects would not be realised at all if left 
to  Member  States,  while  for  other  projects  a  series  of  granular,  un-coordinated 
interventions would not achieve the same impact on the Digital Single Market. 

Critical mass of funding/projects  

In the case of transport, TEN-T core network corridors and horizontal priorities are listed 
in Annex I of the CEF Regulation. Each of the corridors is underpinned by a well-known 
project  pipeline,  with  identifiable  financial  maturity  and  readiness  for  implementation, 

64 Criteria for assessing the value-added of European Finance were set out in the Reflection Paper on the Future of EU 

Finances (COM(2017) 358 of 28 June 2017). 

65 RES technology such as wind, CSP, sustainable biomass or even more innovative ones such as ocean technology 

29 

 
 
 
 
 
 
 
 
 
 
                                                            
drawn together with the Member States and all relevant stakeholders in the scope of the 
Corridor Work Plans (cf. 2.1 above).  

New emerging priorities needed to improve the future programme in the area of transport 
decarbonisation, digitalisation and cross-sectorial synergies constitute another cluster of 
projects  that  require  EU's  intervention.  A  significant  scale-up  of  support  to  the 
deployment  of  alternative  fuels  infrastructure,  major  initiatives  in  the  field  of 
cooperative,  connected  and  automated  mobility  or  cybersecurity  is  expected  to 
necessitate very considerable resource. 

In the case of energy, the programme addresses very specific needs and objectives across 
various energy transmission sub-sectors in order to ensure that an increasingly integrated 
energy  system  of  the  EU  functions  well.  It  is  clear,  as  evidenced  with  the  investment 
needs  analysis,  that  CEF  must  provide  a  comprehensive  answer  to  specific  problems 
across  the  entire  system  since  an  inability  to  address  deficiencies  in  one  area  would 
immediately  undermine 
the 
the  achievements/interventions 
interconnected grid66. 

in  other  parts  of 

In addition, a limited number of targeted cross border projects in the field of renewables 
can  bring economies  of scale, avoid duplication of infrastructures, increase deployment 
across  Europe  to  better  reflect  the  available  potential,  policy  convergence,  knowledge 
transfer, uptake and replication of innovative technologies in the European home market. 
It  was  precisely  such  EU  added  value  that  provided  also  the  justification  for  granting 
support  for  selected  offshore  projects  under  the  European  Economic  Recovery 
Programme. 67 

In  the  case  of  the  digital  sector,  considering  the  size  of  the  investment  gap  (cf.  2.1 
above),  increasing  the  support  to  connectivity  is  indispensable  for  the  success  of  all 
digital policies and for a competitive European economy. In case such additional funding 
will not be granted via CEF, significant potential for efficient support of network rollout 
and  for  socio-economic  impacts  would  be  lost.  This  relates  to  the  focus  of  CEF  on 
strategic  connectivity  projects,  on  cross-border  and  cross-sector  projects,  currently  not 
supported  adequately  by  any  other  EU  programme.  CEF  also  has  a  proven  record  of 
resource efficient support for deployments. 

3.2  The scope of intervention in the digital sector is redefined in complementarity 
with  the  new  Digital  Europe  Programme  and  with  the  centralisation  of  all 
financial instruments under InvestEU 

The scope of the CEF programme for the digital sector has been changed with respect to 
the  current  financial  framework  and  will  not  address  the  part  called  Digital  Services 
Infrastructure, which will be included in the new Digital Europe Programme. A further 
change relates to the centralisation of all financial instruments under InvestEU, with the 
consequence that CEF support will be provided via grants and blending. 

This  changed  scope  of  intervention amounts  to  a  re-focus  of  CEF  Digital  on  CEF  core 
business  of  supporting  connectivity  infrastructure,  taking  advantage  of  the  benefits  of 

66 E.g. even most sophisticated off-shore grid may still require some reinforcements on-shore to deliver its benefits in 

full 

67 Regulation (EC) No 663/2009 

30 

 
 
 
                                                            
aligning with the new EU's strategic connectivity objectives defined in 2016 and thereby 
also  leading  to  a  re-definition  of  projects  of  common  interest.  The  funding  projects 
envisaged in the CEF programme for the digital sector will focus on covering the needs 
of  the  physical  layer  infrastructure  of  very  high  capacity  broadband  networks,  from 
backbone to access networks, in view of ensuring coverage to specific communities/areas 
and socio-economic drivers, as well as coverage along major terrestrial transport paths. 
International and cross-border connectivity, as well as  connectivity in  support of cross-
sector projects (in particular but not exclusively connectivity infrastructure requirements 
and  operational  digital  platforms  supporting  the  digitalisation  of  transport  and  energy 
sectors,  such  as  for  Cooperative,  Connected  and  Automated  Mobility,  the  Internet  of 
Energy  and  Green  ICT)  will  also  be  focused.  Contrary  to  what  is  done  in  the  current 
MFF, the new CEF will not provide support to the deployment of digital services in areas 
of  public  interest,  as  this  will  be  done  under  the  scope  of  the  new  Digital  Europe 
Programme.  The  rationale  behind  the  new  projects  of  common  interest  is  further 
described in Annex 4. 

CEF  will  therefore  become  a  major  tool  to  support  the  delivery  of  EU's  strategic 
connectivity  objectives.  It  will  thus  provide  the  first-class  infrastructure  necessary  to 
support  the  digital  transformation  of  industry,  economy,  public  administration  and 
society at large.  

3.3  The  scope  of  intervention  in  the  energy  sector  is  extended  to  targeted  cross-
in  the  field  of  renewable  energy  under  specific 

border  cooperation 
circumstances  

Renewables  deployment  is  currently  mostly  driven  by  Member  States  through  national 
support schemes and planning with mainly national resources in mind. Support schemes 
that  include  cross-border  elements,  for  instance  when  competitive  bidding  processes 
allowed the participation of producers from other Member States, had lower auctioning 
prices68.  Over  the  past  ten  years,  Member  States  have  not  engaged  significantly  in 
transnational  co-operation  on  Renewables  deployment  -  despite  the  obvious  socio-
economic benefits of a more regional approach69. This approach is promoted in several 
Articles  of  the  2009  RES  Directive,  a  guidance  document  on  cross-border  cooperation 
from 2013, the revision of the renewables Directive and relevant wording in the current 
energy  and  environment  state  aid  guidelines.  In  the  few  cases  where  cooperation  took 
place in the past, projects either did not materialise, were (partly) too complex even with 
a grant from the EU budget (Krieger's Flak reduced from a 3 MS project to a 2 MS one) 
or took a substantial time to take off.  

68The  results  of  the  first  cross-border  tender  for  renewable  electricity  in  Europe  is  an  illustration  of  how  a  Member 
State can limit the costs of financing renewables through allowing foreign electricity generators to bid in the auction. 
The 50 MW photovoltaic tender organised by Germany and open to Danish generators achieved an awarded price 
(5,38  cents/kWh)  that  were  more  than  25%  lower  the  last  German  tender  for  only-German  individual  installations 
(7,25 cents/kWh). The good response obtained by the tender, with bids totalling almost fivefold the amount procured 
and half of it represented by foreign installations shows also the willingness of generators to participate in a broader 
market. 

69 Cf. modelling underpinning the Clean Energy Package; "Cooperation mechanisms to achieve renewables target, 

Jacobson/Pade/Schroeder/Kitzing, in Renewable Energy 63 (2014; "Promotion of electricity from renewable energy 
in Europe post 2020- the economic benefits of cooperation. Fuersch/Lindenberger, EWI working papers. 2013;. 
http://www3.imperial.ac.uk/newsandeventspggrp/imperialcollege/newssummary/news_17-7-2017-14-13-34. 

31 

 
 
 
                                                            
The  reasons  for  Member  States'  reluctance  to  engage  in  cross-border  projects  include: 
regulatory  complexities  and  administrative  burden;  first  mover  risk;  difficulty  in 
quantifying the costs and benefits of cooperation; preference for reaping the benefits of 
renewables’  deployment  nationally  (jobs);  political  acceptance  of  using  national 
taxpayers/consumers' money to fund projects abroad; uncertainty on cooperation design 
options and the difficulty in assessing the impacts on grid and integration costs.  

Regulatory  issues  play  a  role  and  the  Clean  Energy  for  all  Europeans  Package  of 
November  2016  already  foresees  certain  alignments  and  improvements  on  permit 
granting (for all renewable projects, not only cross-border projects), market principles for 
support  schemes,  rules  on  renewable  market  integration,  rules  on  grid  costs  and  grid 
connection.  Further  harmonisation  in  those  areas  would  be  disproportionate  from  a 
subsidiarity  point  of  view  and  will  in  any  event  never  be  able  to  cover  all  national 
specificities, which also extend in into other areas of strict national competence such as 
spatial  planning  and  taxation.  Even  more  importantly,  and  confirmed  both  by  research 
and statements from Member States and other stakeholders the by far biggest obstacle is 
indeed the lacking incentive for either Member States or project promoters to engage or 
invest in such cooperation 70 

While the integration  of renewables to  the grid and achievement of EU level target for 
renewables  will  be  primarily  achieved  through  the  completion  of  electricity  network 
infrastructure,  reaching  this  target  can  become  more  costly  than  necessary  when  areas 
with good conditions are not exploited because a Member State lacks the financial means 
or energy needs to do so on its own. Also, the additional component on renewables cross-
border cooperation can complement the priority projects on the offshore meshed grid. In 
the  North  Sea  and  in  the  Baltic  Sea  the  current transmission  projects  are  point-to-point 
interconnectors that do not yet integrate an offshore renewables source. Projects such as 
Krieger's Flak supported in 2009 by the EEPR and the world's first infrastructure projects 
linking  an  offshore  renewables  source  to  two  national  grids  could  thus  far  not  be 
replicated.  

Similarly, a project might not happen when it requires coordination with other Member 
States to take place (e.g., investment in interconnections is needed to reap full benefits, 
even though this could bring benefits across several Member States). There are positive 
externalities  from  integrated  projects  when  a  production  site  is  planned  jointly 
(economies of scale) or connected cross-border allowing power to be transmitted to the 
country  with  higher  demand  and  price  hence  improving  the  profitability  of  the  site. 
Finally, with an EU-level binding target, renewables deployment and target achievement 
becomes  a  collective  responsibility  with  the  Commission's  role  becoming  a  facilitator. 
This calls for an adjustment also of available EU instruments to align them with this new 
reality. 

Current  EU  support  for  renewables  does  not  aim  to  facilitate  their  joint  deployment. 
Lessons  can  be  drawn  from  the  TEN-E  Regulation  and  the  CEF  also  for  the  future 
development of renewables, in particular when it comes to incentives to promote cross-
border  cooperation.  A  similar  EU-wide  coordination  for  renewables  deployment  in  the 
EU is still at its initial phase, but developing it could facilitate sector integration e.g. with 

70 Cf. finding in: Cooperation between EU Member States under the RES Directive, Ecofys 2014 based on interviews 
with representatives from 11 EU Member States and feedback from stakeholders received at the expert workshop on 
5th March 2018 in Brussels (see Annex for more details) 

32 

 
 
 
                                                            
transport as well as the development of the meshed grids.. Finally, in outermost regions, 
solutions only based on interconnectors might not be the most effective ones so that CEF 
can  become  more  relevant  for  those  regions  if  a  combination  with  renewables  were 
possible. 

That is where the new enabling instrument for renewables under the CEF would come in. 
It would also underpin the provisions on partial opening of support schemes proposed by 
the Commission under the recast of the Renewables Directive.  

The present IA considers the following actions: 
- 

grants for studies and technical assistance to support Member States in:  
  assessing the benefits and costs of cross border cooperation 
  selecting the most adequate cooperation format 
 

 implementing cooperation agreements  

- 
implementation of projects  
-  

grants for studies (pre-feasibility and feasibility and development studies) for the 

grants for works for a limited number of projects with high EU added value based 
on  a  preselected  Projects  of  European  Interest,  when  the  EU  intervention  is 
justified by the need to overcome: 
 
  significant  positive  externalities  such  as  increased  grid  stability  or  due  to  a 

the additional risks of complex multi country projects 

particular innovative solution and/or 

  MS' preference for investing only at home.  

The intervention would be geared towards overcoming the identified market/coordination 
failures/incentive  structure  and  therefore  cover  the  additional  costs  arising  from  cross-
border and multi-purpose infrastructure planning and development, as well as providing 
an incentive for Member States to explore such cooperation instead of only planning and 
deploying  renewable  resources  nationally.  The  EU  funding,  by  helping  limit  the 
additional costs linked to cross-border complexities would incentivise Member States to 
develop regional planning and deployment. 

The total amount of support would be limited to 10% of the total energy window of the 
Connecting  Europe  Facility,  whilst  it  would  be  ensured  that  unspent  money  could  be 
transferred within the CEF energy window to TEN-E projects, and vice versa. 

4  DELIVERY MECHANISMS OF THE INTENDED FUNDING 

4.1  Changes  in  the  programme  delivery  according  to  the  Commission's  global 

simplification measures 

In  the  framework  of  the  Commission's  global  simplification  measures  under  the  post-
2020 Multiannual Financial Framework (MFF), overall simplification efforts will impact 
the  CEF  programme  delivery.  The  preparation  of  the  next  MFF  was  launched  by  the 
Commission with the publication of the White Paper on the Future of Europe in March 
2017. The next steps were the publication of the Reflection Paper on the Future of EU 
Finances in June 2017 and the circulation of the draft template basic act by DG BUDG in 
November/December  2017.  The  results  of  this  political  process  provide  the  top-down 

33 

 
 
 
 
 
 
 
guidance for the next MFF and will affect the form of the post-2020 CEF programming 
period.  

The template for the basic act has provided for an overall simplification basis for the new 
CEF regulation. This is in line with all other funding programmes and will consequently 
affect  the  new  CEF  in  particular in  the  simplification  of  cost  options,  co-funding  rates, 
Member  States  involvement  and  the  development  of  programme  objectives  and 
indicators. It will also provide for a further simplified legal framework of CEF through a 
streamlined  basic  act  and  the  possibility  to  delegate  provisions  and  conditions  to  work 
programmes, which will facilitate further synergies between the three sectors and enable 
CEF to adapt to future needs. 

4.2  Direct management of CEF and its benefits 

The  targeted  delivery  of  CEF  under  direct  management  by  the  parent  DGs  and  their 
executive agency INEA has proved efficient for the implementation of the current CEF 
programme.  For  the  delivery  and  implementation  of  CEF  funding,  direct  management 
has shown several practical advantages.  

  Direct management allows for a stronger policy steering as regards the priorities, the 

selection of projects and their implementation; 

  Direct management allows for exerting an independent coordination at EU level. 
Such coordination is exerted by the Commission (CEF parent DGs and INEA 
interacting directly with the project promoters); 

  For the three CEF sectors, direct management allows for a fast delivery of EU 

support. As an example, in transport, the EUR 11 billion Cohesion envelope under 
direct management through CEF was entirely allocated by mid-2017 and all 
corresponding grant agreements were signed before end 2017. 

  Direct management has allowed for project management expertise at INEA to be 

built up allowing for the monitoring of projects and the handling of these matters in 
an efficient and consistent manner while ensuring close control as regards compliance 
with EU standards. Direct management also allows for coordinated and consistent 
technical validation procedures. 

  The "use it or lose it" principle, a key feature of direct management, helps Member 

States to prioritise as well as to adhere to commitments. Nevertheless, the possibility 
to recycle the commitments in cases where projects are not performing as foreseen 
increases the efficiency of CEF. 

There are many benefits to using an Executive Agency for the implementation of CEF. 
Gains  in  efficiency  have  been  introduced  through  the  externalised  management  of  the 
grant  cycle  via  a  unified  system.  In  addition,  annual  Action  Status  Reports  from 
beneficiaries allow for closer monitoring of grants. Furthermore, there is increased cost 
effectiveness  given  the  ratio  between  human  resources  employed  and  the  amounts 
granted.  

34 

 
 
 
 
 
The direct management of CEF will be supported especially by the "ex-ante assessment 
mechanism  for  large  infrastructure  projects"71.  The  mechanism  is  aimed  at  providing 
targeted  support  to  ensure  that  the  public  procurement  processes  of  CEF  financed 
projects are implemented efficiently and effectively by the beneficiaries. It will thereby 
further facilitate the deployment of critical infrastructure. 

Based on this positive experience, which has also been supported by the CEF mid-term 
evaluation  results,  the  aim  for  the  period  beyond  2020  is  thus  to  continue  the  current 
direct  management  for  the  new  CEF  with  identified  simplification  and  efficiency 
adaptions. 

4.3  Proposed changes in the programme management by the parent DGs and the 

Agency 

While the general principles applied for the programme management of the current CEF 
programme  have  demonstrated  their  efficiency  and  should  be  maintained,  this  section 
identifies  improvements  in  specific  areas,  mainly  related  to  simplification,  innovative 
forms  of  support,  technical  assistance  to  project  preparation,  sustainability/climate 
proofing of certain types of projects and synergies. 

Table: Challenges, objectives and delivery 
Challenges 

Objectives 
General objective 

Delivery mechanism 

First challenge: 
completion of 
Trans-European 
Networks in 
transport, energy 
and digital area 

to support the achievement of the EU 
policy objectives in the transport, 
energy and digital sector, as regards 
the trans-European networks, by 
enabling or accelerating investments 
into projects of common interest 

For transport and energy, 
the current delivery 
mechanism proved 
efficient, it will be 
continued (grants managed 
by INEA).  

The same delivery 
mechanism will be used for 
connectivity projects in the 
digital sector. 

Specific objectives 

Transport: development of efficient 
and interconnected transport networks, 
including the completion of major 
cross-border projects and the removal 
of bottlenecks and missing links. 

Energy: completion of the internal 
energy market through 
interconnections 

Digital: deployment of very high 
capacity digital networks and 5G 
systems in line with the Gigabit 

71Communication from the Commission to the European Parliament, the Council, the European Economic and Social 

Committee and the Committee of the Regions "Helping investment through a voluntary ex-ante assessment 
mechanism of the procurement aspects for large infrastructure projects", COM (2017) 573 of 3.10.2017. 

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Society Strategy Communication, 
increased resilience and capacity of 
digital networks. 

General objective 

Second 
challenge: 
the 
energy  transition 
and 
technological 
developments 
the 
energy 
digital sectors 

in 
transport, 
and 

to support the achievement of the EU 
policy objectives in the transport, 
energy and digital sector, as regards 
the trans-European networks, by 
enabling or accelerating investments 
into projects of common interest 

Specific objectives 

Transport: modernising or upgrading 
the transport infrastructure in order to 
allow for smart, sustainable and safe 
mobility 

Energy: Sustainable development 
through network infrastructure 
enabling integrating renewable energy 
sources including through facilitating 
cross-border planning and deployment 
of renewables. 
Security of supply inter alia through 
smartening and digitalisation of the 
grids 

Digital: Contribute to the digitalisation 
of energy and mobility networks to 
enable cross-border services in these 
two areas. 

Third  challenge: 
Better 
coordination 
with  other  EU 
programmes  and 
better 
of 
exploitation 
synergies  within 
CEF 

General objective 

maximising synergies among the 
sectors covered by the CEF and with 
the other EU programmes 

Cross-cutting specific objectives 

Synergies within CEF 

Changed scope of CEF Digital, with a 
refocus on core business and a 

36 

A reinforced priority will be 
given as regards the 
decarbonisation and 
digitalisation components 
of the programme.  

For transport, a 
significantly higher share of 
the budget will be 
earmarked. 

While the key features of 
the current delivery 
mechanism will be 
maintained, some 
adaptation are necessary to 
take into account a greater 
diversity of beneficiaries 
and type of actions 
supported as regards: 

- simplified forms of grants 
(notably for lower amounts 
and/or standardised 
actions); 

- a more proportionate 
degree of oversight exerted 
by MS (application process, 
monitoring, certification of 
reports and cost statement). 

Coordination with other 
programmes: 

Synergies:  
The delivery will be 
improved as regards: 
- convergence and 
simplification of rules (less 
sector-specific) in order to 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
realignment with other EU 
programmes supporting connectivity 
deployments. 

facilitate synergies; 
- adoption of joint work 
programmes; 
- more flexible definition of 
eligible actions. 

Simplification 

The  aim  for  the  post-2020  MFF  period  is  to  continue  regular  administrative 
simplification  measures  of  the  programme  management  based  on  INEA's  experiences 
during  the  2014-2020  programming  period.  As  an  example,  INEA  has  implemented 
various  administrative  simplification  measures  largely  based  on  the  TEN-T  Executive 
Agency's  experiences  during  the  2007-2013  programming  period.  These  measures 
include the introduction of electronic communication tools for beneficiaries as well as the 
replacement of grant decisions by grant agreements which require less involvement from 
the Commission and the Member States. The following measures are envisaged for the 
new CEF at the level of the basic act72: 

  Simplification of the programme structure 

Following the  general  approach defined for all programmes in  the next MFF, the basic 
act  will  be  simplified  compared  to  the  current  CEF  regulation  (see  section  4.1).  This 
includes  the  removal  of  all  provisions  already  covered  by  the  Financial  Regulation, 
references to the TEN guidelines instead of repeating their provisions wherever possible, 
and use of standard provisions identical for all programmes. In addition, the number of 
specific  objectives  will  be  reduced  and  put  in  correspondence  with  the  list  of  eligible 
actions.  

  Simplification of co-funding rates in transport73  

While the current CEF Regulation specifies in detail the co-funding rate applicable per 
type of action (different categories at 20, 30, 40 and 50% and the cohesion envelope at 
85%),  the  new  Regulation  would  only  refer  to  a  generally  applicable  maximum  co-
funding rate (for instance 30%) with two exceptions: 

  a  maximum  co-funding  rate  at  50%  in  duly  justified  cases  to  be  specified  in  the 

Regulation; 

  an exception concerning actions funded under the cohesion envelope (the maximum 

co-funding rates of the future Cohesion Fund would apply). 

In  addition,  the  Regulation  should  clearly  specify  that,  within  these  limits,  the  work 
programme may provide for more differentiated co-funding rates depending on the type 
of action. 

72 It is noted that the most important simplification measures for beneficiaries relate to the implementation phase, 

notably as regards the programming and design of the calls, the evaluation process, the grant agreement preparation 
and the monitoring arrangements. These elements are not regulated at the level of the basic act. 

73 Co-funding rates in case of CEF-energy and CEF-ICT under the current CEF regulation have already been simple 

and will remain such in the next generation of CEF. 

37 

 
 
 
 
 
                                                            
Finally, the Regulation should allow for the derogation to these limits in the case of joint 
work  programmes  covering  several  sectors  in  order  to  avoid  that  different  co-funding 
rates per sector constitute an obstacle to synergies.  

  Streamlining the Member States involvement through the CEF Committee  

While  the  implementation  of  the  programme  lies  within  the  responsibility  of  the 
Commission,  the  involvement  of  Member  States  is  considered  important,  especially 
when  it  comes  to  large  infrastructure  projects  on  their  territories  or  to  regulated  public 
goods.  In  addition,  the  simplification  of  the  programme  implies  that  important 
implementation  modalities  would  be  set  in  the  work  programmes  and  no  longer  in  the 
basic act. 

For  these  reasons,  it  is  considered  proportionate  and  justified  to  maintain  the  CEF 
Committee and to focus its role on the work programmes. While the Committee would 
continue to be informed in detail on the selection of projects and on the monitoring of the 
programme,  it  should  be  assessed  if  a  formal  opinion  of  the  Committee  on  the  award 
decisions  taken  by  the  Commission  is  necessary.  Such  simplification  would  allow  to 
further reduce the time to grant by almost a month. 

As  regards  individual  projects,  currently  Member  States  are  requested  to  approve 
applications  and  to  certify  incurred  expenses  and  final  reports.  The  approval  of 
applications  by  Member  States  was  questioned  in  a  certain  number  of  cases,  notably 
when promoters are private entities and/or the project does not concern common goods or 
interest.  It  would  be  preferable  to  remove  this  general  obligation  but  to  keep  the 
possibility to impose it in the work programmes when duly justified (large infrastructure 
projects,  use  of  the  national  envelope  under  the  transport  cohesion  envelope,  projects 
including certain aspects related to security or public authority, etc.). 

On the contrary, the certification of expenditure and final report by Member States could 
be  removed  entirely  and  replaced  by  a  more  systematic  obligation  to  provide  an  audit 
certificate. 

Complementarity/Coherence with other funds 

The challenges identified in section 2.1 concerning the complementarity/coherence with 
other EU programmes are presented in the table below: 

ESIF 

  Better delineation of scope between ESIF and CEF concerning 
transport74: CEF focusing on the TEN-T infrastructure of cross-
border  relevance  (including  through  the  implementation  of  a 
Transport Cohesion Fund envelope) while ESIF focuses on the 
urban, local and regional mobility needs through ERDF. 

  Better  coordination  and  streamlining  of  policy  objectives  and 
interventions  through  the  ex-ante  conditions  applicable  to 
transport  investment  under  shared-management  (to  ensure  full 
consistency with the TEN-T).  
In case of energy, clear delineation ensured with CEF focusing 

 

74 Subject to final decisions concerning the scope and budget of each programme. 

38 

 
 
 
 
 
 
 
                                                            
interface)  while 

transmission  and 
on  TEN-E  (including  smart  grids  on 
on 
ESIF 
transmission/distribution 
national/regional  transmission,  distribution  and  distribution 
level  smart  grids  and  storages.  Increasing  importance  of 
investments at local and regional level in a decentralised energy 
system  points  to  a  continued  or  even  increased  relevance  of 
EFSI funding for energy therefore  

support 

  Both  ESIF  and  CEF  are  aligned  in  providing  coherent  and 
complementary 
strategic  connectivity 
to  EU's 
objectives. As regards one target to which both ESIF and CEF 
are expected to contribute to, CEF is expected to cover market 
failures areas where projects can be deployed with low intensity 
grants,  allowing  ESIF  to  address  further  and  more  severe 
market  failure  areas  which  require  higher  grant  amounts  and 
intensity. 

  Better 

rules 
implementation and monitoring.  

alignment 

of 

concerning 

applications, 

InvestEU 

  No competing financial instruments in CEF. 
  Focus  grant  support  on  projects  that  cannot  be  supported 

Digital 
Programme 

Europe 

FP9 

through financial instrument, or 

  Use  grants  for  blending  with  InvestEU  (or  other  private 

financing) if needed for bankability. 

  According to its current definition, Digital Europe will include 
future activities concerning the Digital Services Infrastructures 
part of the current CEF.  

  Services  developed  in  Digital  Europe  will  run  over  the 

connectivity infrastructure provided by CEF2.  

  Cybersecurity developed in Digital Europe will be used also to 

protect critical infrastructures supported by CEF2 

  As  in  the  current  period,  while  the  development  of  innovative 
solutions will be supported by the EU research programme FP9, 
the deployment of innovative solutions will be supported by the 
new  CEF  when  in  relation  with  its  scope  (for  instance  as 
regards alternative fuels or digital traffic management systems). 
No  risk  of  overlaps  as  inherently  different  stages  of  market 
maturity of FP9 and CEF actions 

Innovative forms of support 

For infrastructure projects that have positive expected environmental and socio-economic 
values in support of EU policy objectives, there exists a full spectrum of financing needs 
(in  terms  of  the  financial  viability  of  the  investment).  From  financially  viable  projects 
based on the income stream generated by users and concession fees in regulated sectors, 
to  projects  of  high  policy,  environmental  and  economic  value,  but  not  generating 
sufficient revenues to cover investment and therefore being highly dependent on public 
sector/government support.  

Therefore  a  full  range  of  support  mechanisms  continue  to  be  appropriate  for 
infrastructure including a continuation of EU-backed budgetary guarantees and financial 
instruments  under  “Invest  EU”,  to  complement  the  bulk  of  EU  support  to  the  sector 

39 

 
 
 
 
which  will  continue  to  be  delivered  through  grants  by  EU  programmes  such  as  CEF 
(whether conventionally or through blending) and by the EIB and other financing public 
and private institutions and investors. 

  Expanding the use of blending. 

The provision of grants in combination of EIB, whenever appropriate through EU-backed 
financial instruments, National Promotional Banks or private finance to projects aligned 
with  EU  high  value  objectives  is  an  appropriate  support  mechanism  because  many 
infrastructure  projects  are  on  the  margins  of  financial  viability,  and  support  solely 
through  EU-backed  financial  instruments,  including  "InvestEU"  backed  financial 
products, would not be sufficient to deliver financial viability.  

The  blending  approach  allows  the  bulk  of  the  finance  to  be  provided  privately, 
minimising the overall public sector contribution in line with the goals of the Investment 
Plan  for  Europe,  improves  the  quality  of  the  projects  and  their  efficient  delivery. 
Furthermore,  an  emphasis  on  private  finance  and  blending  can  catalyse  changes  in 
investment strategies by Member States. 

There  is  a  strong  case  for  the  administration  and  allocation  of  grants  (whether 
conventionally  or  through  blending)  to  be  towards  projects  with  high  EU  added  value. 
The proven way to deliver this is through centralised sector specific instruments such as 
the  CEF,  through  either  blending  calls  or  blending  facilities,  where  the use  of  the  CEF 
budget ensures the fulfilment of the TEN priorities. 

The  update  of  the  EU  Financial  Regulation  includes  legal  text  regarding  blending  and 
blending facilities75. In addition, as part of the so called ‘Omnibus’, an amendment to the 
current CEF Regulation to establish the possibility of a blending facility for one or more 
of the CEF sectors, has been agreed. This approach can be tested in the current financial 
period and then scaled up in the next period. 

Blending  seems  also  well  suited  for  the  integration  of  renewables  into  cross-border 
action.  Blending  also  seems  particularly  suitable  for  supporting  broadband  rollouts, 
where  only  a  small  grant  component  could  ensure  full  coverage  of  territories  where 
private  investors  alone  would  otherwise  not  go,  or  would  favour  locations  within  that 
specific area. 

  Making use of simplified forms of grants 

The new Financial Regulation no longer requires grants to be expressed as a percentage 
of eligible costs and grants may also be expressed as an absolute value, i.e. in a so called 
notional approach.76 The possibility to use simplified forms of grants will be ensured in 
the new Regulation according to the provisions set out in the template basic act circulated 
by DG BUDG. This includes notably provisions under Article 11 of the new Regulation 

75 A cooperation framework established between the Commission and development or other public finance institutions 
with a view to combining non-repayable forms of support and/or financial instruments from the Union budget and 
financial support from development or other public finance institutions as well as from commercial finance 
institutions and investors and be managed either by the Commission or by persons or entities implementing Union 
funds pursuant to point (c) of the first subparagraph of Article 62(1)". 

76As further specified in Article 11 of the template basic act circulated by DG BUDG and in Article 180(1) of the new 

Financial Regulation. 

40 

 
 
 
 
 
 
  
                                                            
specifying  that  co-financing  rates  will  only  apply  where  the  work  programmes  foresee 
grants calculated as a percentage of eligible cost.  

Simplified forms of grants, for example in the form of voucher schemes, will continue to 
be  used  to  fund  very  high  quality  wireless  local  connectivity  to  local  communities  and 
could  be  used  for  socio-economic  divers  in  the  future:  connectivity  vouchers  are 
envisaged  to  be  used  to  provide  Gigabit  connectivity  to  specific  entities  with  a  public 
mission,  e.g.  eHealth  centres  and  practitioners, schools,  local  administrations.  This  will 
directly  and  indirectly  support  important  digitisation  efforts,  i.e.  driving  demand  by 
illustrating  the  benefits  of  advanced  digital  services,  and  potentially  improving  the 
business case for wider network deployments in the respective areas.  

Synergies  

The design of the programme will allow synergies between sectors in a flexible manner 
notably through the following changes. 

  The  alignment  of  key  provisions  for  the  three  sectors  and  the  possibility  to  adopt 
thematic  work  programmes  covering  specific  priorities  of  several  sectors.  The 
possibility  to  adopt  thematic  work  programmes  between  the  three  sectors  will  also 
further facilitate coordinated synergy calls for proposals between the sectors, which 
will enable CEF to specifically direct Union funding to shared areas of interests and 
inter-sectoral horizontal priorities. The first thematic work programme could focus on 
Connected and Automated Mobility for instance. 

  The  removal  of  the  obstacles  that  have  hampered  synergies  in  the  current 
programme. Under the current  programme specific  obstacles  were  identified, which 
have hindered the exploitation of synergies in practice: 

-  Actions  with  synergies  can  be  financed  only  if  the  components  and  costs  of 

such an action can be clearly separated per sector;  

-  Each component must be eligible under the specific sectoral guidelines which 

each, independently, sets strict criteria;  

-  No  dedicated  budget  line  for  synergies  exists  which  would  support  actions 

whose components cannot be separated per sector;  

-  Difference  in  programming  timing  (e.g.  multiannual  vs  annual  work 

programmes). 

Under  the  new  programme,  the  Commission's  global  simplification  measures  will 
notably facilitate the removal of the identified obstacles for synergies of the current 
programme  period.  In  particular,  the  above-mentioned  possibility  for  dedicated 
synergy  work  programmes  as  well  as  simplified  provisions  in  the  basic  act  will 
enable synergies among the three sectors. As the new Regulation would only refer to 
generally  applicable  maximum  co-funding  rates  in  all  three  sectors  and  gives  the 
possibility to specify additional eligibility criteria in the calls for proposals, the new 
Regulation  offers  more  flexibility  through  the  delegation  of  provisions  to  the  work 
programme level. 

  A more flexible definition of eligible actions in the new Regulation allowing to take 
into  account  some  elements  in  synergy  with  other  elements  eligible  under  CEF  or 
contributing to the policy goals on in the transport, energy or digital sectors.  

41 

 
 
 
 
 
 
Sustainability/climate proofing of projects 

The climate proofing (both mitigation and adaptation aspects) of ESIF major projects has 
been  successfully  implemented  within  the  2014-2020  period.  Furthermore,  individual 
MS/regions  devised  their  national/regional  approaches  to  strengthen  the  sustainable 
dimension of EU co-funded infrastructure projects77. In view of this experience and the 
sustainable  development  requirements  of  the  TFEU  (Art.  11),  the  CEF  funding  should 
better integrate the sustainability/climate proofing into its operation, irrespectively of the 
sustainable nature of its project portfolio.  
Any  system  to  be  designed  should  be  relatively  simple  and  should  not  entail  excessive 
costs and be made-to-measure for specific types of projects.  

Climate proofing of investments made under the CEF will aim at ensuring continuity of 
services  in  case  of  extreme  weather  events  (minimisation  of  disruption  of  transport 
services,  security  of  energy  supply  and  security  of  network  stability).  The  increase  in 
weather related risks caused by climate change should also be taken into account, using 
sector specific and the best available information. For investments made under the CEF, 
negative externalities related to climate and other environmental risks can be taken into 
account in the overall project risk assessments and mitigation strategies during planning 
and  development  phases.  For  larger  infrastructural  systems  such  as  energy  network 
systems,  transport  systems  or  broadband  infrastructure,  a  climate  proofing  exercise 
would  include  both  damages  to  the  infrastructure  itself  and  losses  due  to  projected 
operational down-time. 

5  HOW WILL PERFORMANCE BE MONITORED AND EVALUATED? 

Compared to CEF 2014-2020, a simpler but more robust performance framework will be 
put  in  place  to  monitor  the  achievement  of  the  Programme's  objectives  and  its 
contribution  to  the  EU  policy  objectives.  Performance  monitoring  will  continue  to  be 
carried out both at actions level and at programme level. 

At actions level, the necessary data will be collected by INEA during the implementation 
and  evaluation  of  supported  actions.  The  collected  data  will  relate  to  the  technical  and 
financial progress of the actions. To this end, the conditions for applying for a grant and 
the  model  grant  agreement  will  contain  proportionate  requirements  on  applicants  and 
beneficiaries to provide the necessary data.  

At  programme  level,  in  line  with  guidance  from  DG  BUDG  under  the  EU  Budget 
Focused on Results initiative and building on the work INEA has already undertaken on 
improving output indicators during the current CEF programme (in accordance with the 
findings of the mid-term evaluation), the new CEF Regulation will contain several high 
level  indicators  based  on  each  of  the  specific  objectives  with  the  measurement 
mechanisms for these indicators being developed in advance of the implementation of the 
new regulation.  

As  far  as  possible,  the  relevant  criteria  and  approaches  will  be  harmonised  across  all 
MFF  programmes.  As  far  as  possible,  the  mainstreaming  methods  of  ESIF  and  CEF 

77 Some examples can be found in the Report of the European Network of Environmental Authorities – Managing 

Authorities (ENEA-MA) working group on Mainstreaming the environment in cohesion policy in 2014-2020, 2016 

42 

 
 
 
                                                            
should be harmonised78. The table below sets out the high level indicators and provides 
illustrative examples of possible measurement mechanisms.  

Sectors 
Transport 

Specific Objectives 
Efficient and interconnected 
networks and infrastructure for 
smart, sustainable and safe mobility 

Energy 

Contribution to military mobility 
requirements 
Contribution to interconnectivity 
and integration of markets 

Security of energy supply 

Sustainable development through 
enabling decarbonisation 

Digital 

Contribution to the deployment of 
digital connectivity infrastructure 
throughout the European Union  

Indicators 
Number of cross-border and missing links 
addressed with the support of CEF (including 
actions relating to urban nodes, maritime ports, 
inland ports and rail-road terminals of the TEN-T 
core network) 
Number of CEF supported actions contributing to 
the digitilisation of transport 
Number of alternative fuel supply points built or 
upgraded with the support of CEF 
Number of blackspots addressed with the support 
of CEF 
Number of transport infrastructure components 
adapted to meet military mobility requirements 
Number of CEF actions contributing to projects 
interconnecting MS networks and removing 
internal constraints 

Number of CEF actions contributing to projects 
ensuring resilient gas network 
Number of CEF actions contributing to the 
smartening and digitalisation of grids and 
increasing energy storage capacity 
Number of CEF actions contributing to projects 
enabling increased penetration of renewable energy 
in the energy systems 
Number of CEF actions contributing to 
transnational cooperation in the area of renewables 
New connections to very high capacity networks 
for socio-economic drivers and very high quality 
wireless connections for local communities  
Number of CEF actions enabling 5G connectivity 
along transport paths  
Number of CEF actions enabling new connections 
to very high capacity networks for households  
Number of CEF actions contributing to the 
digitalisation of energy and transport sectors 

Regarding  the  climate  and  air  quality  related  indicators,  common  headline  indicators 
would improve coherence and communicability of the CEF and should be developed in 
the  context  of  a  Commission-wide  coordinated  approach  in  order  to  harmonise  the 
provisions  with  other  programmes,  including  with  regard  to  the  climate  mainstreaming 
methods  (on  project/programme  screening  criteria/CBA,  on  tracking,  on  KPIs,  on 
reporting).  As  regards  indicators  for  air  quality  and  emission  reduction79,  they  should 
include emissions of PM 2.5 in kg/year and emissions of NO2 (or NO2 equivalent in the 
case of NOx) in kg/year, before and after the project. 

78 For example on delivery mechanisms, project/programme screening criteria/CBA, on tracking, on KPIs, and on 

reporting. 

79There is the European Court of Auditors' recommendation for quantification of environmental benefits (notably in 

transport projects co-funded by the EU, even if these are only secondary objectives of projects). 

43 

 
 
 
 
 
 
 
 
 
 
 
                                                            
These  indicators  will  allow  monitoring  and  evaluating  implementation  and  progress  of 
the  Programme  towards  the  achievement  of  its  objectives.  A  mid-term  and  an  ex-post 
evaluation of the programme will be carried out in conformity with Article 34 paragraph 
3  of  the  Financial  Regulation  and,  based  on  the  implementation  and  output  indicators, 
assess  the  efficiency,  effectiveness,  relevance,  coherence  and  value  added  of  the 
programme. Where available, results and impacts indicators will be taken into account80. 
The  Commission  will  communicate  the  conclusions  of  the evaluations accompanied  by 
its  observations,  to  the  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions. 

80 For investment in large infrastructures, results and impacts can only be measured after several years of operation.  

44 

 
 
 
                                                            
ANNEX 1: PROCEDURAL INFORMATION 

Lead DG(s) 

Directorate-General  for  Mobility  and  Transport  (DG  MOVE),  Directorate-General  for 
Energy (DG ENER) and Directorate-General for Communications networks, Content and 
Technology (DG CNECT). 

Organisation and timing 

The  preparations  for  the  CEF  programme  in  the  2021-2027  period  were  undertaken  in 
accordance  with  the  guidance  received  from  central  services  as  part  of  the  overall 
preparations  for  the  Multiannual  Financial  Framework  for  2021  –  2027.  A  drafting 
working  group  was  established  by  the  three  parent  DGs  to  prepare  the  CEF  proposal, 
comprising  the  legislative  proposal  and  the  accompanying  impact  assessment.  The 
Secretariat General set up an Inter-Service Steering Group (ISSG) for the CEF proposal 
for the 2021-2027 period, gathering representatives of different Directorates-General of 
the  Commission.  Two  meetings  (26  February  and  16  March)  were  held  prior  to 
submission  of  the  Staff  Working  Document  containing  the  impact  assessment  to  the 
Regulatory Scrutiny Board in March 2018.  

Consultation of the RSB 

An  informal  upstream  meeting  was  held  on  9  January  2018  with  RSB  representatives 
During this discussion Board members provided early feedback and advice on the basis. 
Board  members'  feedback  did  not  prejudge  in  any  way  the  subsequent  formal 
deliberations of the RSB. The initial draft of the impact assessment was submitted to the 
Regulatory Scrutiny Board on 21 March 2018. Scrutiny took place at the Board meeting 
of 18 April 2018 and a positive opinion with reservations was issued on 21 April 2018. 
The table below demonstrates how each of the Board’s recommendations were taken into 
account. 

Main considerations of RSB 
The report is too vague regarding 
the changes and extensions to the 
of 
programme’s 
intervention,  in  particular  in  the 
does 
digital 
not 
extensions 
demonstrate 
cross-border 
clearly 
solutions.  

It 
that 

pillar. 

target 

scope 

It is not always clear how the 
fund will ensure that its 
interventions are coherent with 
those of other programmes, such 
as the structural funds or 
InvestEU 
The  report  does  not  sufficiently 
develop 
for 
arrangements 
monitoring and evaluation. 

45 

Revisions 
A  table  summarising  the  changes  of  scope  has  been 
added  at  the  beginning  of  section  3.  In  addition,  a 
table  illustrating  the  linkage  between  the  challenges, 
objectives  and  delivery  of  the  programme  has  been 
added to section 4.3. The drafting throughout the text 
on  the  extension  of  scope  to  renewables  and  digital 
has been further elaborated and a standalone annex on 
the digital sector is now included. 
Additional  drafting  has  been  provided  in  section  2.1 
on  the  third  challenge  regarding  complementarity. 
Furthermore,  a  table  has  been  inserted  in  section  4.3 
summarising 
concerning 
key 
complementarity/coherence with other funds.  

aspects 

the 

Section  5  has  been  redrafted  to  better  reflect  the 
monitoring  and  evaluation  arrangements  for  the  new 
programme with the proposed new indicators detailed.  

 
Evidence, sources and quality 

In  addition  to  the  evaluation  of  the  public  consultation,  data  collection  and  evidence 
stems from: 

  The mid-term evaluation of the CEF Programme 2014-2020 
  Progress report on implementation of the TEN-T network in 2014-2015 
  The impact of non-completion of the TEN-T network in terms of growth and jobs 
  The independent full-scale evaluation of the pilot phase of the Europe 2020 Project 

Bond Initiative 

  Communication on 'Building the transport core network: core network corridors and 

CEF’ 

  Study on the impact on growth and jobs realised through the realisation of the TEN-T 

core network 

  Communication on the mid-term review of the MFF 2014-2020 
  Study on the long term sustainability of Digital Service Infrastructures 
  Study on the maturity of the Digital Service Infrastructures supported by the CEF 
  Assessment of the alternatives for, market sentiment towards, and recommendation of 

the most effective financial instrument(s) for the CEF broadband activity 
  Ex-post evaluation of the TEN-T 2007-2013 programme carried out in 2017 
  Preliminary  results  of  Study  on  permitting  &  facilitating  the  preparation  of  TEN-T 

core network projects 
Investment needs in trans-European energy infrastructure to 2030 and beyond 

 
  Cost-Effective financing structures for mature projects of common interest (PCIs) in 

Energy 

  TEN-E  evaluation  -  Annex  to  the  Staff  Working  Document  accompanying  the 

Commission Delegated Regulation (C(2017) 7834)  

  Evaluation of the impact of PCI implementation  
  ENER A4 study for next MFF: Evaluating the structure of EU Financing of Energy 
under  the  current  MFF  and  assessment  of  options  for  structuring  EU  financing  of 
energy  under  the  next  MFF,  Final  Report  prepared  for  DG  ENER,  January  2018, 
Vivideconomics, Ramboll  

  Expert  stakeholder  meeting  on  cross-border  renewables  cooperation  on  5th  March 

2018 in Brussels (cf. annex).  

  ECA  special  report  31/2016  on  climate  mainstreaming  and  the  COM  replies: 

https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=39853 
  CLIMA  consultants'  report  on  climate  mainstreaming 

in 

the  next  MFF: 

https://publications.europa.eu/en/publication-detail/-/publication/1df19257-aef9-11e7-
837e-01aa75ed71a1  

  Expert  stakeholder  Consultation  workshop  on  Green-ICT  on  30th  January  2018  in 

Brussels 

  Expert  stakeholder  Consultation  workshop  on  the  Internet  of  Energy  held  on  26th 

 

February 2018 in Brussels 
- Expert stakeholder consultation workshop on integration of cross-border renewables 
held on 5th March 2018 in Brussels

46 

 
ANNEX 2: STAKEHOLDER CONSULTATION  

1. OPEN PUBLIC CONSULTATION 

This report presents the results of the online public consultation, organised as part of a 
series of public consultations covering the entire spectrum of EU future funding. While 
the public consultation covered the topic of strategic infrastructure funding (comprising 
CEF, Galileo and ITER), this report will analysis the CEF focused results. The 
consultation was launched on 10 January 2018 and remained opened for a period of 8 
weeks, until 9 March 2018. 

1.1 Respondents 

The questionnaire’s initial section collected background and contact information on the 
respondents. A total of 441 responses were received, which led to a total of 424 when the 
Galileo related responses were removed. There was at least one response from every 
Member States as well as 8 responses from outside of the EU (Switzerland, FYROM, 
Bosnia and Herzegovina and the USA). Respondents were asked to which topic their 
questionnaire referred and Table 1 illustrates the breakdown of responses per CEF sector. 

Table 1: Breakdown of responses by CEF sector 

Relevant CEF sector 

Digital 

Energy 

Transport 

Total 

Number of 
respondents 

69 

107 

248 

424 

% 

16% 

25% 

58% 

100% 

Of the total number of responses, 63 respondents identified themselves as individuals 
responding in a personal capacity while 361 identified themselves as responding in a 
professional capacity or on behalf of an organisation. Table 2 provides a breakdown of 
responses by Member State and respondent type. The large number of responses from 
Belgium can be explained by the fact that many EU representative associations are based 
there. A significant number of responses from logistic companies based in France 
accounts for the high number of responses received from France. The geographical 
breakdown was quite evenly spread across each sector with 21 Member States 
represented in digital responses, 22 Member States in energy responses and 25 Member 
States in transport responses. 

Table 2: Breakdown of responses by Member States 

Country 

Individuals 

EU-Members 
States 

Austria 

Belgium 

Bulgaria 

1 

7 

1 

Professional 
Capacity/Organisations 
9 

Number of 
Respondents 
10 

65 

72 

1 

47 

 
 
  
Croatia 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Bosnia and Herzegovina 

FY Republic of Macedonia 

Switzerland 

USA 

Non EU-MS 

4 

1 

2 

7 

4 

2 

4 

2 

3 

1 

2 

1 

3 

2 

4 

1 

6 

3 

1 

1 

3 

1 

8 

6 

3 

6 

64 

32 

6 

7 

10 

22 

5 

3 

16 

10 

10 

3 

6 

2 

30 

16 

12 

2 

3 

1 

7 

1 

9 

6 

3 

8 

71 

36 

8 

11 

12 

25 

5 

4 

2 

1 

19 

12 

14 

4 

6 

2 

36 

16 

15 

3 

1 

3 

1 

Total 

63  

361  

424 

Responses were received for a wide variety of entities as detailed in Table 3. Responses 
to “Other” included state owned companies such as railway undertakings and energy 
operators as well as region groups and financial organisations.  

Table 3: Breakdown of responses by type of organization 

Type of organizations represented 

International or national public authority 

Non-governmental organisation, platform network 

Private enterprise 

48 

Number of 
respondents 

35 

59 

117 

% 

8% 

14% 

28% 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
 
Professional consultancy, law firm, self-employed consultant 

Regional or local authority (public or mixed) 

Research and academia 

Trade, business or professional association 

Other  
Total 

1.2 OVERVIEW OF RESULTS 

1.2.1 Policy challenges 

19 

61 

15 

56 

62 

4% 

14% 

4% 

13% 

15% 

424 

100% 

When asked to rate the importance of the policy objectives, respondents considered the 
transition  to  a  low  carbon  and  climate  resilient  economy  and  society,  the  transition 
towards  clean,  competitive  and  connected  mobility,  completion  of  the  TENs  and 
promoting economic growth and jobs across the EU as the most important challenges.  

Respondents for the transport sector were more inclined to indicate the specific transport 
related  challenges  as  very  important or  rather  important  (the transition  to  a  low  carbon 
and climate resilient economy and society (98%), completion of the TENs (91%) and the 

49 

 
 
 
 
transition towards clean, competitive and connected mobility (98%). Energy respondents 
confirmed the importance of completion of the TENs (84%), the transition of EU energy 
and need for ensuring security of supply (92%) and developing new energy sources for 
the EU (86%) while also recognising the challenge of transitioning to a low carbon and 
climate  resilient  economy  and  society  (94%).  Digital  sector  respondents  identified  the 
Transition  to  Digital  Single  Market  (96%)  and  promoting  economic  growth  and  jobs 
across  the  EU  (94%)  as  the  two  most  important  challenges,  closely  followed  by 
Completion of the trans-European networks in the third place (93%). 

When  asked  to  address  other  policy  challenges,  just  over  64%  gave  no  answer  or  no 
opinion.  Of  those  who  did  believe  other  challenges  existed,  transport  respondents 
identified urbanisation, territorial accessibility and cohesion (in particular for peripheral 
regions),  removal  of  bottlenecks  and  barriers,  and  funding  (i.e.  lack  of  funding,  and 
insufficient  access  to  funding  for  local  and  regional  authorities).  A  large  number  of 
French  logistics  companies  listed  Logistics  &  Infrastructures  as  the  main  policy 
challenge.  Other  issues  raised  include  climate  change  and  clean  transport,  transition 
towards  a  circular  economy,  development  of  interoperable  digital  traffic  management 
systems,  waterborne  transport  and  digitalisation  of  maritime  transport,  integration  of 
transport modes, and funding of transport projects outside the EU.  

When  naming  additional  policy  challenges  that  such  programmes/funds  could  address, 
several energy stakeholders stressed the value in promoting energy efficiency and energy 
savings including in the context of cohesion programmes. Some suggested the need for a 
better integration of power and gas sectors and the possible role for biogases/ hydrogen 
and  the  need  for  suitable  infrastructure.  Specifically  for  gas  infrastructure,  some 
stakeholders considered it as essential for helping the EU in achieving its energy targets 
while  some  stressed  that  the  EU  should  not  invest  in  fossil  fuel  infrastructure.  Some 
stakeholders highlighted the importance of investing in renewable energy sources and in 
this  context  of  making  full  use  of  existing  cooperation  possibilities  in  the  area  of 
investments  in  renewable  and  electricity  trade  between  countries.  The  integration  of 
decentralised energy sources and the support for the deployment of smart grid solutions 
was  highlighted  by  some  stakeholders,  as  was  the  emphasis  on  the  support  of  research 
and  innovation  to  further  optimise  the  grids.  The  commitments  under  Paris  Agreement 
were raised by some of the respondents, a couple of whom underlined the role of nuclear 
power. 

Answers from the digital sector respondents highlighted the need to support high speed 
connection and development of digital networks, especially in economically weaker areas 
where  connectivity  greatly  improves  employment  opportunities.  The  responses  call  for 
intervention to speed up the transition to Digital society, to build up digital capabilities 
and  make  them  available  to  users  in  all  areas,  including  the  poorer  and  less  populated 
regions.  

50 

 
When asked to what extent CEF successfully addresses the challenges listed81 and when 
respondents were most positive towards the following challenges: promoting economic 
growth and jobs across the EU (either fully addressed or fairly well addressed - 65%) and 
completion of the TENs (62%). Respondents were fairly neutral towards the transition to 
a low carbon and climate resilient economy and society (51% either fully addressed or 
fairly well addressed); the transition towards clean, competitive and connected mobility 
(50%); the transition of EU energy and need for ensuring security of supply (52%). 
Respondents were less positive towards the extent to which the following challenges are 
being addressed; Implementation of the Digital Single Market (42% to 58%) and 
development of new long-term energy sources (34% to 66%). 

The majority of transport respondents considered the transport-focused challenges as 
being fully addressed or fairly well addressed; completion of the TENs (67%), the 
transition to a low carbon and climate resilient economy and society (54%) and the 
transition towards clean, competitive and connected mobility (58%). 

Energy respondents believed completion of the TENs to be the challenge mostly 
addressed by the current programmes/funds (65% of the respondents said that it was fully 
or fairly well addressed) with promoting economic growth and jobs across the EU (58%) 

81 No opinions were removed for the analysis of this question. 

51 

 
 
                                                            
and the transition of EU energy and need for ensuring security of supply (55%) following 
behind. Only 35% of energy respondents considered CEF to be addressing the challenge 
of development of new long-term energy sources. 

Digital sector respondents identified the Implementation of the Digital Single Market as 
the challenge mostly addressed by the current programmes/funds (54% of the 
respondents said that it was fully or fairly well addressed). Promoting economic growth 
and jobs across the EU was voted in second place (47%), while completion of the TENs 
stands as the third mostly addressed challenge by current programmes/funds (43%).  

1.2.2 Added value 

The figure above illustrates that a majority of respondents (76%) believe that CEF adds 
value compared to what could be achieved at national, regional or local level. The figure 
rises to 80% when looking at transport respondents only, decreases slightly to 74% for 
energy respondents and further to 65% for digital respondents. 

When asked to explain how the current programmes/funds add value compared to what 
Member States could achieve at national, regional and/or local levels, a large number of 
transport respondents listed green and sustainable transport and transnational and cross-
border transport infrastructure, in particular rail, as the two areas where CEF funds added 
most value. Territorial cohesion and access to isolated regions were also seen as areas 
were EU funds played an important role. One respondent pointed out that the importance 
of local and regional authorities in the establishment of the trans-European transport 
network had been "legitimised" via the corridor fora. The CEF was also seen as playing 
an important role in contributing to the development of inland waterways, the 
implementation of common standards and technologies in Europe (e.g. rail 
interoperability, intelligent transport, ERTMS), fostering innovation and new 

52 

 
 
technologies, and promoting road safety. A few respondents highlighted the importance 
of cities, noting that CEF funding for urban nodes was largely insufficient. 

The vast majority of the energy sector respondents confirmed the added value of the 
program stating that EU funds play a crucial role in enabling the implementation of EU 
policies by financing actions that the Member States would not have been otherwise able 
to fund on their own. Moreover, most of the respondents highlighted the fact that the 
program finances cross-border projects that in many cases are of lower priority for the 
Member States as well as of much higher risk, but which at the same time yield 
significant welfare benefits for the European citizens. 

Digital respondents mentioned the unification of infrastructure, which results in the cross 
border interoperability and contributes to the sustainable, inclusive economic growth and 
cohesion within the European Union. Some more specific achievements of the CEF 
programme, which would not have been at place with only national funding at disposal, 
were mentioned.  

1.2.3 Objectives 

When asked is there a need to modify or add to the objectives of the programmes/funds 
in this policy area and if yes, which changes would be necessary or desirable, a large 
number of transport respondents called for increased funding for low-emission mobility, 
promoting a modal shift from road to sustainable modes of transport, including 
waterborne. Respondents suggested that sustainability should be better integrated as a 
selection criterion, and that the term "EU added value" should be more clearly defined. 

Some respondents also called for EU funds to be made available to fund local public 
transport and to promote regional projects, in particular in peripheral regions. They 
argued that EU funding for transport infrastructure at the heart of urban nodes is too 
limited. A number of respondents also argued that, as ports are transnational in nature; 
their co-financing rate should be raised from 20% to 40%. 

The  majority  of  energy  respondents  were  of  the  view  that  the  concept  of  synergies 
between  the  three  sectors  should  be  reinforced  with  particular  emphasis  on  the 
combination of energy and digital infrastructure elements. In the same vain, some of the 
participants raised the issue of sector coupling and how the programme could extend in a 
way to  address this  emerging  need. Moreover, some  of the respondents highlighted the 
role  that  green  gas  could  play  in  the  energy  transition  and  suggested  that  CEF’s 
objectives  could  extend  to  the  deployment  of  new  carbon-neutral  technologies,  while 
others  proposed  exploring  opportunities  for  a  Trans-European  Network  for  Green 
Infrastructure ("TEN-G"). 

Digital respondents highlighted the necessity to commit more funds to increase 
connectivity (including creation of a dedicated fund for Broadband), and reduce the 
digital gap between rural and urban areas. Highly specific technical suggestions on 
changes in procedures or regulations were also submitted. 

53 

 
 
 
 
 
1.2.4 Obstacles 

The most prominent obstacle identified by respondents by quite some margin was 
complex procedures leading to high administrative burden and delays (65% chose to a 
large extent or to a fairly large extent). The second most important challenge was the lack 
of flexibility to react to unforeseen circumstances and new user needs (53%) while the 
third was insufficient synergies between EU programmes/funds (51%). The lowest 
scoring obstacles were limited information on the selection process (39%) inadequate co-
financing rates (41%) and difficulty to ensure the sustainability of projects when the 
financing period ends (43%).  

When looking at transport respondents only, the figure for each obstacle was higher and 
in particular for complex procedures leading to high administrative burden and delays 
(70%), lack of flexibility to react to unforeseen circumstances and new user needs (59% 
as opposed to 53% overall) and insufficient administrative capacity to manage 
programmes (56% compared with 50% overall). On the other hand, for energy 
respondents the figure was lower for each obstacle with only complex procedures leading 
to high administrative burden rated as an obstacle by over half of energy respondents 
(61%). The next most important obstacle for energy respondents was and insufficient 

54 

 
 
administrative capacity to manage programmes with 41% of respondents rating it at to a 
large extent or to a fairly large extent. The most important obstacles for digital 
respondents were complex procedures leading to high administrative burden and delays 
(72%), the difficulty of combining EU actions with other public interventions (61%) and 
insufficient synergies between EU programmes/funds (54%). 

Only 26% of respondents identified other obstacles. For transport respondents, further 
flexibility in the eligibility criteria of CEF calls was requested by several stakeholders as 
well as more flexibility to the programme generally such as with regards to the 
requirement for Member State approval of applications and the facilitation of synergies 
with other sectors. Some stakeholders raised the administrative burden at Member State 
level in the implementation of the CEF programme as well as requesting further clarity 
regarding the timing of calls. The importance of grants was highlighted as well as the 
need for an increased budget given the large oversubscription in the current programme. 
A few stakeholders requested exemption for the national co-financing element from the 
Stability and Growth Pact rules. 

A commonly identified obstacle for energy respondents was the timing of the calls. More 
specifically, the respondents stated that they should be given more time to prepare their 
application and asked for more flexibility with the deadlines. Some of the participants in 
the survey mentioned that more clarity regarding the eligibility criteria is required, while 
very often it is difficult for them to identify the right person that could provide them with 
all necessary information.  

When  stating  other  obstacles,  digital  respondents  referred  to  general  issues  such  as  the 
complex  procedures,  the  lack  of  flexibility  or  the  lack  of  knowledge  of  the  local 
authorities  as  well  as  the  insufficient  funding  for  CEF  and  Broadband  and  the  low 
priority of the disadvantaged areas. 

1.2.5 Simplification and reduction of administrative burden 

55 

 
 
The majority of respondents believed that simplification and reduction in administrative 
burden could be reduced with fewer, clearer, shorter rules (79% to a large or fairly large 
extent), the alignment of rules between EU funds (73%), more effective stakeholders’ 
involvement in the programming, implementation and evaluation (72%), more flexibility 
of resource allocations to respond to unexpected needs (69%) and sufficient flexibility 
between programming periods (63%). The results were fairly similar across all sectors. 

Over 77% respondents gave no opinion or no answer to specifying another possible 
method. Of those who did provide suggestions, a number of transport respondents called 
for more foreseeable timetables for CEF calls, more even distribution of funds over a 
funding period, and more direct involvement of regional authorities in the programming 
and implementation of the CEF. They suggested that feedback be given directly to 
applicants rather than via the Member States. They asked for pre-financing opportunities 
or more financial support dedicated to the development phase of projects. One 
respondent suggested that allowing more lead time for applying for funding would be a 
way to reduce administrative burden, as it would allow the work to be spread over a 
longer time period.  

Respondents  also  pointed  out  that  a  two-stage  application  process  (like  in  H2020  or 
Interreg)  could  significantly  reduce  the  burden  on  applicants.  They  suggested  that  a 
simplified  proposal  could  be  submitted  during  the  first  phase,  with  more  detailed 
proposals only required during later phases. Respondents called for simpler procedures, 
uniform rules across the various EU funds, and greater flexibility at project level.  

Other  proposals  included  broader  stakeholder  involvement,  a  one-stop-shop  for 
infrastructure  projects,  and  translation  of  documents  in  all  EU  languages.  A  couple  of 
respondents asked for the publication of a Eurostat Guidance on the statistical treatment 
of  concession  contracts.  It  was  also  recalled  that  the  SGP  rules  represented  a  heavy 
constraint on Member States' co-financing capacity. 

Referring specifically to ERTMS, a large French company pointed out that the duration 
of  the  GA  is  not  enough  to  cover  the  cycles  related  to  public  procurement  procedures. 
They  also  called  for  CEF  grants  to  be  paid  on  the  basis  of  an  interoperability 
demonstration rather than submission of the file to the National Safety Authority. 

Most of the energy respondents suggested that more effective stakeholders' involvement 
in  the  programming,  implementation  and  evaluation  process  could  lead  to  further 
simplification  of  the  current  program  and  reduction  of  the  administrative  burdens  for 
beneficiaries.  They  also  proposed  that  fewer,  clearer  and  shorter  rules  as  well  as  more 
flexibility  of  resource  allocation  to  respond  to  unexpected needs  could  be  a  solution  to 
the various procedural complexities. One of the additional suggestions submitted by the 
energy sector respondents is the division of the grant application process into two steps: 
the first for the identification of the eligible projects and the maximum amount of fund 
likely to be granted and the second for the actual award of the grant. A few respondents 
proposed  the  simplification  of  the  (regulatory  Cross  Border  Cost  Allocation  –  CBCA) 
process as well as the acceleration of the applications' evaluation phase. 

Both segments agree that fewer, clearer and shorter rules would simplify to a large or 
fairly large extent current programmes and funds, reducing administrative burdens for 
beneficiaries. In second place, both elected more effective stakeholder's involvement in 
the programming, implementation and evaluation. In third place, again the segments 
agree on the alignment of rules between EU funds as an initiative that would simplify the 

56 

 
current programmes and funds. Respondents are divided on question whether more 
reliance on national rules would simplify the administrative burdens. Not at all or to 
some extent only, was the opinion of 49% of both segments, as opposed to 37% of digital 
and 32% of overall respondents meaning that more reliance on national rules would lead 
to simplification at a large or fairly large extent. 

Digital respondents mostly referred to simplification of procedures on the EU side and to 
greater involvement of the local actors on the MS level in early phases of drafting, as 
well as later in the implementation phase. A call for a dedicated fund for Broadband was 
made, as well as the necessity to introduce more flexibility of expenditure eligibility. 

1.2.6 Synergies 

When asked how could synergies among programmes/funds in this area be further 
strengthened to avoid possible overlaps/duplication and whether for example, 
grouping/merging some programmes should be considered, to a large extent the 
respondents concurred that keeping the transport, telecom and energy sector together 
seems appropriate in light of their common goals and challenges but that a separate pillar 
per sector seemed appropriate given particular circumstances.  

Respondents requested that greater coherence be provided between CEF and 
complementarity funds such as Horizon 2020 and ESIF through clarifying the perimeter 
of the various funds. Some of the respondents suggested the establishment of a "one-
stop-shop" approach by which a project developer could enter data once on a single 
portal and apply for funds from various programs, while others stressed the importance 
of just better coordination and alignment between the various EU and national funding 
programs. On the other handsome respondents sceptical about the grouping/merging of 
programs stating that this might create ambiguity. 

Several respondents mentioned the limited success of harnessing synergies in the current 
CEF programme and stressed the importance of emerging needs such as decarbonisation 
and digitalisation. Thematic cooperation and building on the lessons learned from the 
CEF Synergy Call 2016 was encouraged by several respondents in order to make the 
most efficient and effective use of the CEF instrument. Joint work programmes on 
common themes across sectors was suggested for instance. Several respondents also 
suggested that greater flexibility and simplification of rules could help to foster further 
synergies.  

1.3. POSITION PAPERS 

84  respondents  of  the  OPC  offered  additional  contributions  in  the  form  of  a  position 
paper.  Position  papers  were  submitted  by  'non-governmental  organisation'  (28),  'trade, 
business  or  professional  association'  (18),  'private  enterprise'  (15);  'regional  or  local 
authority  (public  or  mixed)'  (12),  and  'international  or  national  public  authority'  (5), 
'research  and  academia'  (1),  and  'professional  consultancy,  law  firm,  self-employed 
consultant' (1).  

Among  all  received  position  papers,  23  focused  particularly  on  the  transport  pillar  of 
CEF and commented on this matter. Furthermore, 15 respondents used the opportunity to 
provide more targeted input regarding the role of CEF to the energy systems, while five 
other position papers were strictly dedicated to issues concerning the digital sector. All 
the remaining documents took a more general approach, either targeting multiple sectors 

57 

 
of CEF activity at once, or highlighting the importance of other topics. Below follows an 
overview of the key remarks made by respondents, divided by the sector of activity. 

1.3.1  Transport 

In addition to highlighting the importance of investment in specific (missing) links, cross 
border  sections  and  bottlenecks  of  particular  interest  to  certain  stakeholders,  increasing 
co-financing rates, and calling for an increase in the overall CEF budget compared to the 
current  programming  period,  several  other  issues  were  raised  by  stakeholders  issued. 
These were as follows: 

 

Increasing the availability of DG MOVE and INEA to provide advice as part of 
the development and at different stages of CEF implementation  

  Allowing  access  to  CEF  grants  for  initiatives  such  as  cross  border  metro  /  light 
rail  and  short  sea  shipping  vessels  (where  waterborne  transport  is  the  only 
connection  within  the  TEN-T)  as  well  as  increasing  funding  opportunities  for 
ports, in particular, LNG bunkering facilities; 

  Making calls for proposals more predictable, simplifying application procedures, 

 

and increasing the transparency regarding the final selection of projects; 
Incentivizing  'green  and  clean'  projects  (e.g.  by  increasing  co-financing  rates, 
adopting a climate rating methodology); 

  Recognizing  cycling  as  a  major  mode  of  transport  in  the  new  financial 
frameworks  and  support  the  implementation  of  those  measures  included  in  the 
EU’s new Road Safety Programme 2020-2030 which have the highest lifesaving 
potential; 

  Further improving and facilitating cities’ involvement in TEN-T governance, and 

stimulating cooperation between all relevant public and private sectors. 

1.3.2  Energy 

In  the  position  papers  received  for  the  energy  programs,  stakeholders  recognised  the 
importance  of  the  CEF  for  the  development  of  transmission  projects  with  high  net 
benefits at EU level but also with high investment costs due to the technology required to 
minimize environmental and social impact. On the other hand, there was criticism about 
the eligibility criteria for  not  being clear enough in  the case of grants  for  works and in 
terms  of  the  CBCA  decision  for  being  rather  restrictive.  Stakeholders  from  the  Baltic 
region  stressed  the  role  of  CEF  in  strengthening  security  of  supply,  highlighting  the 
significance  of  the  projects  contributing  to  the  Baltic  synchronisation  and  the 
diversification of the region's natural gas sources.  

Other energy stakeholders  stressed the potential  of biomethane  in  countries like France 
and  its  contribution  to  sustainable  development  objectives  as  well  as  the  benefits  of 
offshore  wind  power.  Furthermore,  there  was  a  paper  suggesting  the  introduction  of  a 
Full Lifecycle Cost Management (FLCM) method that could master and estimate the cost 
of the plant operation and electricity cost, while an energy stakeholder provided insight 
into  the  macro-trends  of  the  changing  energy  system  –  including  decarbonisation, 
digitalisation,  decentralisation,  sector  coupling  and  uncertainty  –  and  how  the  next 
generation  of  EU  energy  infrastructure  policies  can  successfully  adapt  concluding  that 
financing flows should be channelled towards the low carbon infrastructure of the future. 

Finally,  there  have  been  submitted  a  number  of  position  papers  arguing  in  favour  of 
investing  in  energy  renovation  of  buildings  in  the  post-2020  EU  Multiannual  Financial 

58 

 
 
 
Framework,  highlighting  the  benefits  to  the  local  economies  and  the  environment  and 
suggesting among other things that the new CEF should enable investments in efficiency 
in demand- and supply-side infrastructures, in particular where they have the potential to 
avoid unnecessary network investment. 

1.3.3  Digital 

The position of the stakeholders from the digital sector were aligned on the requirement 
for  an  increased  EU  investment  in  the  state-of-the-art  digital  infrastructure,  as  it  is  a 
catalyst  to  all  other  economic  sectors'  growth.  Connectivity  was  regarded  as  central  to 
participation in the economy and society, and they pinpointed that a proper infrastructure 
including broadband and 5G will set up Europe as a serious player in the global digital 
economy. 

1.3.4  General  

Most  notably,  many  of  the  received  position  papers  elaborated  on  the  importance  of 
environmental  protection  and  the  need  to  incorporate  it  into  CEF's  objectives.  Other 
stakeholders highlighted aspects related to multiple CEF pillars including: 

  Existing  railway  infrastructure  should  be  given priority  in  EU  programmes,  and 

most of all in CEF. There was a call for the establishment of a Shift2Rail 2. 

  Spending  on  energy  and  transport  infrastructure  should  prioritize  projects  of 
cross-border nature that deliver EU added value and which explicitly support the 
EU’s climate and energy policies 
Investment  in  vehicle  charging  infrastructure  should  be  increased,  along  with 
ensuring  that  electrification  projects  of  public  transport  systems  are  eligible  for 
support.  

 

  Green  hydrogen  economy,  sustainable  mobility,  and  autonomous  mobility  are 
emerging  markets and need (experiment) space in the existing EU legislation to 
make public-private partnerships possible without tendering and state aid issues.  
  The Digital sector was highlighted as was the need to increase competitiveness of 

the EU through connectivity across EU with strong focus on rural  

  Also, connectivity, 5G and interventions in these fields are seen as the key factor 
improving  economic  performance,  promoting  qualitative  leaps  and  generating 
jobs in the EU 

  Furthermore, the stakeholders stress the contribution of digitalization, as well as 
the importance of the synergies between the TENs. Consequently, digitalization is 
considered one of the key elements to be supported by EU investments  

4. SPECIFIC CONSULTATIONS TO REINFORCE SYNERGIES BETWEEN THE THREE SECTORS 

In addition to the online public consultation - organised as part of a series of public 
consultations covering the entire spectrum of EU future funding - specific expert and 
stakeholders consultation workshops where organised to reinforce synergies between 
sectors. 

4.1 Expert stakeholder Consultation workshop on Green-ICT on 30th January 2018 
in Brussels 

59 

 
 
 
 
The take-up of emerging ICT technologies and paradigms (e.g. IoT, Could Computing, 
Big Data, Data Analytics, etc.) has contributed to the modernisation of our economy, 
from transport to manufacturing. However, this also meant that the energy consumption 
of the ICT sector itself (in particular data centres and networks) is drastically increasing. 

To reduce the carbon footprint of the ICT sector is a necessary condition in order to 
achieve the EU climate and energy goals. The experts considered action on both 
infrastructure and cross-border services. On infrastructure they recommended: 

Support the creation of an EU wide cross-border govCloud based on Open technologies 
to pool together resources contributed by various MS public sector including both 
sharing and hosting infrastructure. Support the deployment of cross border broadband 
high capacity low latency connectivity infrastructure as a necessary condition for the 
deployment of the EU-wide govCloud. 

Create an EU network of data centres (the govCloud) connected cross border to the smart 
grids of the neighbouring countries. Provide cross-border connectivity in areas that are 
ideal locations for data centres (e.g. regions rich in renewable energy sources and/or 
possibilities for heat reuse but no connectivity), while analysing and identifying other 
areas in the European network requiring more bandwidth and access points. This would 
give data centres the option to locate in optimal areas helping them reduce their 
environmental footprint. 

On the cross border services, they proposed the deployment of EU wide data platforms. 
Examples are a platform to collect energy consumption reports and a cross-border 
platform to exchange cybersecurity information and best practices. 

4.2 Expert stakeholder Consultation workshop on the Internet of Energy held on 
26th February 2018 in Brussels 

Expert's recommendations can be classified in two groups. Firstly to support digital e-
platforms providing energy related information services. These would facilitate the 
development of the EU energy market in general and more optimal use of renewable 
energy production across Europe. Secondly, they stressed there is a need to deploy digital 
infrastructures to optimise the energy interconnections amongst the EU member states.  

On Digital energy-services e-platforms, there was general agreement that creating a new 
renewable energy availability e-platform, forecasting generation across the EU, providing 
predictive information on renewable energy availability across the EU to generators, 
TSOs, DSOs, aggregators, and other energy market players, would open new 
opportunities for interaction and service sharing. It would increase market transparency 
and asset optimisation across the energy value chain and facilitate more optimal use of 
renewable energy generation capacity throughout the EU. It would enable better 
information flows about energy resource availability and would result in more efficient 
use of energy resources and interconnection capacity across borders.  

Other platforms were also proposed e.g. on cybersecurity and on simulation to monitor 
and predict the evolution of all aspects the EU energy market.  

On Digital infrastructures, the interconnection of Smart Grids operating in different MS 
is already happening at TSO level and they recommended more coordination between the 
TSOs and DSOs and also amongst DSOs. The there is a need for more integration of the 
distribution grid and the transmission systems and more interconnections at lower 

60 

 
voltage levels to enable digital and physical interconnections at the distribution level and 
across international borders in the future. 

Also, there are synergies to be exploited amongst the telecoms, energy and transport 
sectors in terms of digitalisation and infrastructures. Close collaboration amongst these 
sectors is needed in order to use resources efficiently and effectively to build a 
framework that will support the development of new value added services connecting the 
three pillars of IoT, 5G networks and the Internet of energy (IoE). This needs to be a 
done in a way that is open and compatible at the EU level. 

4.3 Consultation to MS on Connected and Automated Mobility (CAM) 

In  April  2016  the  Dutch  Presidency  organised  an  informal  transport  council  during 
which the Amsterdam Declaration was presented and endorsed by all Member States. It 
focuses on cooperative driving and automated vehicles.  

The  Dutch  ministry  organised  two  High  Level  Dialogues  to  follow-up  on  the  goals  set 
out  in  the  Amsterdam  Declaration.  As  a  result,  27  Member  States  plus  Norway  and 
Switzerland  signed  on  23  March  2017  in  Rome  the  Letter  of  Intent  on  cross-border 
demonstration and testing of CCAM.  

Extensive consultations with Member States took place to identify possible cross-border 
corridors and during the High Level meeting in Frankfurt and the Round table on CAD 
(14-15 September 2017), six cross-border initiatives were announced by Member States: 

  FR – DE – LU: Metz-Merzig-Luxembourg 
  NL – BE: Rotterdam-Antwerp-Eindhoven;  
  ES – PT: Porto-Vigo and Merida-Evora (corridor Lisbon – Madrid);  
  FI – NO: The E8 "Aurora Borealis" corridor between Tromsø (Norway) and Oulu 

(Finland); 

  The "Nordic Way" between Sweden, Finland and Norway. 

The  Commission  is  aiming  at  having  more  concrete  progress  on  these  corridors  and 
having some additional corridors announced in the frame of the Digital Day 2 high level 
event on 10 April 2018 in Brussels. 

The policy context 

  This is in line with other Commission initiatives including GEAR2030 (managed 
by  DG  GROW,  having  provided  stakeholder  recommendations 
the 
Commission  in  October  2017),  the  work  of  DG  MOVE  on  C-ITS  (Cooperative 
Intelligent Transport Systems, aiming at a Delegated Act scheduled for the end of 
2018  providing  technical  and  organisational  specifications  for  deployment)  and 
the  Communication  on  CCAM  scheduled  for  2  May  2018  as  part  of  the  third 
Mobility Package. 

to 

  CCAM  has  been  identified  as  a  promising  (flagship)  application  enabled  by  the 
future deployment of 5G networks, e.g. in the 5G Action Plan. The Commission 
has further proposed that all main EU transport paths be covered by 5G services 
by  2025  (Communication  on  connectivity  for  the  gigabit  society).  Where  5G 
infrastructure  is  deployed,  it  will  provide  uninterrupted  coverage  for  relevant 
CCAM services across the full corridor.  

61 

 
 
 
 
  CCAM will figure prominently in the 3rd mobility package that the Commission 
intends to adopt on 16 May this year. This package will come two weeks after the 
adoption  of  the  data  package  and  the  Communication  on  Artificial  Intelligence, 
both extremely relevant for the automotive sector. By the end of the year, we will 
also  adopt  the  cyber  security  package.  It  will  complement  the  related  C-ITS 
legislative  approaches  by  giving  guidance  how  to  provide  overall  security, 
concerning different strands of possible attacks to the moving vehicle. 

4.4. Expert workshop on the extension of scope towards cross border cooperation on 
Renewables on 5th March 2018 in Brussels  

A stakeholder workshop "Towards a more Europeanised approach to Renewables' policy 
– a possible instrument to support cross-border cooperation on renewables in the MFF 
post-2020" took place in Brussels, 5 March 2018 in order to support the analysis of this 
part  of  the  impact  assessment.  The  expert  stakeholder  event  gathered  around  60 
participants,  including  representatives  from  12  EU  Member  States  and  the  Energy 
Community,  TSOs,  utilities,  industry  umbrella  organisations  NGOs,  think  tanks  and 
consultancies. The purpose was to allow stakeholders to express their views on the merits 
and design of an enabling instrument for renewables regional cooperation. Questions for 
discussions  focussed  on  persistent  barriers,  main  criteria  to  assess  the  EU  added  value, 
delivery mechanisms and innovation.  

Main outcome of the discussion:  

The benefits of having a more coordinated approach to renewables planning and 
• 
deployment are uncontested, but at the same time barriers are preventing cooperation to 
happen.  

Member  States  face  a  basic  conflict  between  achieving  greater  cost  efficiency 
• 
through  cross-border  cooperation  (but  potentially  having  to  trade-off  with  RES 
investments  and  benefits  occurring  in  another  country)  and  public  acceptance  and 
preference  for  investments  at  home  (but  then  losing  out  on  potential  gains  from 
cooperation), 

• 
Setting up cross-border cooperation on renewables is complex, lengthy and might 
benefit  from  facilitating action  by  EU.  Ambition  in  first  cooperation  projects  was  even 
too  high  (Kriegers  Flak  planned  to  involve  3  MS,  meshed  DC  grid  still  as  long-term 
ambition).  

Financial  support  (comprising  financial  instruments  and  grants)  for  renewables 
• 
projects  of  European  interest  is  very  important  as  to  provide  an  incentive  to  overcome 
Member  States  preference  for  national  planning  and  national  deployment  of  RES 
capacity. It fosters the Europeanisation of RES policies and support. 

• 
Support in the form of grants for technical assistance and studies is a useful EU 
intervention  to  help  lower  the  high  upfront  costs  related  to  setting  up  the  coordinated 
action. There is also a need for EU first loss instruments, equity and guarantees to lower 
the high risk of cross border RES projects.  

• 
With  regard  to  flagship  projects  under  such  an  instrument,  there  is  a  need  of 
learning from experiences acquired with the EEPR and TEN-E interventions with regard 
to innovation, consistency with the environmental acquis and the need to facilitate also 

62 

 
combinations  of  technologies,  bearing  in  mind  its  potential  contribution  to  keep  and 
expand EU RES industrial leadership.  

A  possible  link  to  the  National  Energy  and  Climate  Plans  and  the  Financial 

• 
Platform (Art 27) under the Governance Regulation should be explored  

• 
There was large consensus on the need for more alignment between grid and RES 
planning to which this potential new instrument could effectively contribute. On the other 
hand, the importance to continue electricity grid development as a pre-requisite was also 
raised. 

• 
Integration of cross-border renewables adds value to the relevant provisions of the 
legal  framework  (provisions  in  the  Clean  Energy  Package  on  simplified  administrative 
procedures, cooperation projects, and in particular grid integration as supported through 
TEN-E  and  CEF).  Some  interventions  calls  for  more  regulatory  alignment.  The 
Commission  was  also invited to  update the  2013  guidance  on  cross  border  cooperation 
including templates.  

• 
Participants also called upon the Commission to come up with a more supportive 
framework for PPAs, for the creation of renewables free trade zones as in the UK, as well 
as  new  measures  to  address  the  large  differences  in  cost  of  capital  as  to  ensure  that 
renewables can be deployed equally throughout Europe.  

63 

 
 
 
ANNEX 3: COMPREHENSIVE ASSESSMENT OF THE EXTENSION OF SCOPE OF THE ENERGY 

WINDOW TOWARDS TARGETED CROSS-BORDER COOPERATION IN RENEWABLES 

1. INTRODUCTION 

1.1. Context 

The  EU  has  the  political  ambition  to  "to  become  the  world  leader  in  renewables"82. 
This  is  not  only  contributing  to  the  EU's  commitments  under  the  Paris  agreement,  but 
important  also  for  industrial  leadership  and  associated  jobs  and  growth.  Renewable 
energies  should  furthermore  increasingly  penetrate  sectors  so  far  predominantly 
dependent on fossil fuels, such as mobility which will require appropriate infrastructure 
development (e.g. e-mobility).  

To  achieve  these  goals,  the  Commission  has  tabled  the  most  performant  legislative 
framework:  Clean  Energy  for  All  Europeans  package,  which  is  currently  under 
negotiations in the ordinary legislative process. Some key new elements of this proposed 
new regulatory framework relevant for renewables development are the following: 

  Firstly,  Member  States  will  no  longer  be  bound  by  a  national  target  for 
renewables  post  2020.  With  the  change  to  an  EU-level  binding  target, 
target  achievement  becomes  a  collective 
renewables  deployment  and 
responsibility with the Commission's role moving to a facilitator. This calls for an 
adjustment also of available EU instruments to align them with this new reality. 
The  recast  Renewables  Directive  includes  furthermore  measures  to  Europeanise 
renewables support, such as cross-border opening of support schemes. 

  The market design proposals aim at making the market more flexible and thus fit 

for the integration of increasing amounts of variable renewable energies. 

  The  Governance  proposal  will  further  reinforce  cooperation  among  Member 
States,  including  on  their  national  and  energy  climate  action  plans  (NECPS).  In 
particular,  the  Commission's  proposal  on  Governance  of  the  Energy  Union  and 
the  recast  of  the  Renewable  Directive  put  forward  that  "Member  States  shall 
identify opportunities for regional cooperation".  

  Art.  3(4)  of  the  recast  Renewables  Directive83  stipulates  that  "the  Commission 
shall support the high ambition of Member States through an enabling framework 
comprising the enhanced use of Union funds, in particular financial instruments". 
The co-legislators strengthened the text referring to an enabling framework in the 
currently  negotiated  review  of  the  Renewables  Directive  to  explicitly  call  for 
enabling action to support renewables cooperation across borders.84  

As President Juncker recently said: "We need a budget that matches our ambitions. For 
instance, we want to be world leaders in renewable energy and get ahead of the curve on 
new technologies. If we want our Union to have a role in that, we must give ourselves the 
tools we need to make it happen." 

Also,  Member  States  and  industry  repeatedly  called  for  looking  into  options  for  EU 
funding  for  joint  projects  and  encourage  their  uptake,  in  particular  with  a  focus  on 

82 Cf. Clean Energy for all Europeans package[COM(2016) 860 final] 
83COM/2016/0767 final 
84 Cf Art 3.4 of the General Approach of the Council on the revised Renewables Directive as adopted on 18th of 

December and EP Amendment 113 to the same text.  

64 

 
 
 
 
                                                            
offshore  wind.85  The  European  Parliament  in  its  resolution  of  14th  March  2018  on  the 
post 2020 MFF86 called for continuous EU support for investments to enable the use of 
renewable energy, including by CEF. 

It is in this context that the Commission is assessing the inclusion of financial support to 
specific aspects of renewables development under the Connecting Europe facility. It is to 
be  noted  that  94  %  of  respondents  in  the  public  consultation  on  the  future  strategic 
infrastructure  funding  considered  the  low  carbon  transition  as  important  challenge,  and 
pointed to  the  increasingly  important role of sector integration (e.g. between  the power 
sector, grid development and the transport sector). 

In  this  context,  regional  cooperation  is  essential  to  ensure  an  effective  and  affordable 
energy  transition  in  the  EU  taking  advantage  of  trade,  evening  out  variability, 
safeguarding  security  of  energy  supply,  coordinating  climate  adaptation  measures  and 
optimising the cost-effectiveness of actions.  

Voluntary  regional  cooperation  on  energy  matters  such  as  in  the  Central  and  South-
Eastern  European  Energy  Connectivity  (CESEC)  and  Baltic  energy  market 
interconnection  plan  (BEMIP),  which  were  initially  aimed  at  improving  physical 
infrastructure,  is  expanding  its  scope  and  has  recently  started  covering  aspects  such  as 
renewables development and energy efficiency. 

1.2. Concept 

Enabling action to promote optional cross-border cooperation of EU Member States (EU MS) 
was already included in the Renewables Directive (2009/28/EC in 2009 (and strengthened in the 
revision  of  2016).  The  rationale  was  to  give  Member  States  flexibility  to  jointly  exploit 
cheaper renewable energy sources. The ones with less resource potential to cost-effectively 
achieve their binding national target could use renewables across the border to fulfil their target. 
Those  Member  States  that  had  a  relatively  lower  national  target  to  fulfil  (mostly  the  countries 
with  lower  GDP)  were  in  return  given  the  possibility  to  benefit  from  their  renewables  (RES) 
potential  by  allowing  a  Member  State  to  explore  it  in  return  for  a  financial  reward.  The  four 
variants of cooperation mechanisms listed are:  

Article 687 
Statistical transfers between Member States.  
Member States agree on a statistical transfer of a specified amount of energy from renewable sources from one 
Member State to another Member State.  

Article 7 
Joint projects between Member States. 
Member States may cooperate on all types of joint projects relating to the production of electricity, heating or 
cooling from renewable energy sources. That cooperation may involve private operators. 

Article 9 
Joint projects between Member States and third countries. 
One or more Member States cooperate with one or more third countries on all types of joint projects regarding 
the production of electricity from renewable energy sources. Such cooperation may involve private operators. 

85Cf. with a view to the North Seas https://windeurope.org/wp-content/uploads/files/policy/topics/offshore/Offshore-

Wind-Statement-of-Intent-signed.pdf and with a view to the Baltic Sea http://www.tuuleenergia.ee/wp-
content/uploads/Baltic-Sea-Declaration.pdf . 

86 http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P8-TA-2018-0075&language=EN  
87 The numbering in the revised directive is altered for all Articles listed. 

65 

 
 
 
 
 
 
 
 
                                                            
Article 11  
Joint support schemes. 
Member States partly or fully coordinate their national support schemes so that production in the territory of one 
participating Member State may count towards the national overall target of another participating Member State.  

The proposal to extend the scope of CEF to support cross-border projects in the field of 
renewables  as  part  of  the  present  Impact  Assessment  focusses  on  those  mechanisms  – 
including their fully voluntary nature-, but complements it with action targeting the very 
early  stages  of  cooperation  between  Member  States:  planning  and  mapping  of  sites, 
feasibility  studies,  assessment  of  the  regulatory  framework,  assessment  of  benefits  and 
costs  of  cross  border  cooperation  and  their  allocation,  comparative  assessments  of  the 
total  costs  of  deployment  (including  generation  infrastructure  and  grid  development). 
Support will be reserved to projects resulting from a cooperation agreement or any other 
kind of arrangement between Member States and or member States and third countries as 
set  out  in  above  listed  Articles  of  the  2009  Renewables  Directive.  In  addition,  the 
projects  need  to  provide  cost  savings  in  the  deployment  and/or  benefits  for  system 
integration, security of supply or innovation compared to similar projects implemented at 
national level and also a cost benefit analysis.  

The amount dedicated to such projects will not exceed 10% of the total energy window 
under  the  Connecting  Europe  Facility  of  which  a  vast  part  and  the  first  phase  will  be 
support  provided  for  grants  for  studies  and  technical  assistance  to  Member  States  and 
action aimed at identifying and assessing the expected impact and costs and benefits of 
cross-border cooperation in the field of renewables. In a second phase, grants for studies 
for the implementation of project and grants for works for a limited number of projects 
would  be  made  available  –  only  for  those  projects  that  can  demonstrate  significant 
positive  externalities  of  regional  significance  (such  as  security  of  supply,  solidarity  or 
innovation) and in the case of evidence that the project would not materialise or not be 
commercially viable in the absence of a grant. Examples for innovative technologies that 
are at this point in a phase where market upscaling is needed are: 

On site storage facilities (batteries, pumped hydro) to enable higher capacity use 

Multiterminal  substations  (HVDC  or  AC)  allowing  a  modular  build  out  of  the 

Floating substations instead of fixed structures 
Solution  with  HVDC  cables  to  enable  exploitation  of  RES  further  away  from 

- 
RES capacity 
- 
- 
consumption centres 
- 
of the cables and provide SOS 
- 
the cables and provide SOS 
Insofar they are not already covered under the TEN-E Regulation, projects consisting of 
such  technologies  may  now  become  candidates  for  cross-border  project  in  the  field  of 
renewable energy status and for a possible support under the CEF. 

Energy  conversion  facilities  (e.g.  electrolysers)  to  enable  higher  capacity  use  of 

The cooperation on renewables by at least two Member States can either result in: 

RES  projects  physically  connected  to  several  Member  States  and  or  between  a 

 (i) 
Member State and a third country; 

66 

 
 
 
 
 
 
 
(ii)   RES  projects  located  in  a  single  Member  State,  but  demonstrating  significant 
cross-border benefits and financially supported by two or more Member States or 
financed by one Member State but located on the territory of a different Member 
State (with or without physical connection).  

This  means that the new instrument would not only be about connecting infrastructure, 
but also cooperation with cross-border relevance. The cross-border dimension is assured 
by the involvement of two or more Member States. In addition to the obligatory cross-
border  dimension,  the  projects  should  furthermore  display  a  positive  cost-benefit 
analysis taking into account all "integration costs". 

Examples of project resulting from enabled cross-border cooperation could include:  

  Large  North  Sea/Baltic  Sea  offshore  wind  developments  where  planned  RES 
generation  sites  in  the  waters  of  several  adjacent  Member  States  are  developed 
and deployed jointly and possibly connected to several Member States instead of 
each developing it on its own and linking it only to its national shore.  

  Other  RES  technologies  such  as  onshore  wind,  concentrated  solar  power, 
sustainable biomass88 or more innovative ones such as floating windmills, ocean 
technology or innovative combinations of different renewables technologies (e.g. 
solar  PV  plus  offshore  wind)  could  become  eligible  under  the  proposed  new 
instrument.  

  RES  projects  including  integrated  storage  or  energy  conversion  facilities  (e.g. 
windfarms  with  combined  electrolysers  or  methanisation  facilities  for  gas  grid 
injections) that are currently not eligible under TEN-E. 

With the emergence of e-mobility, cross-border e-mobility projects will be considered in 
synergies with the transport and digital parts of CEF. 

1.3. Lessons learnt from the past and past programmes  

The  European  Energy  Plan  for  Recovery  has  demonstrated  how  financial  support  to 
specific  cross-border  renewables  projects (Krieger's Flak) could  enable the world's first 
project linking two national grids with an offshore energy source. What however did not 
happen  in  the  case  of  Krieger  s  Flak  was  a  joint  planning  of  RES  deployment  which 
would  have  resulted  in  economies  of  scale  compared  to  each  MS  deploying  a  smaller 
capacity on its own. 

Furthermore, the European Fund for Strategic Investments has significantly contributed 
to renewables development, with EUR 3.2 billion funding by February 2018, triggering a 
total  investment value  of  more than EUR 24 billion89  (contributing  to  the de-risking of 
projects).  

Accordingly to the 2014 study on the meshed grid90, a more integrated approach to grid 
and  RES  planning/deployment  could  be  beneficial  also  for  the  meshed  North  Sea  grid 

88 Biomass combustion should be only eligible if certain sustainability conditions are met and the effects on air 

pollution are integrated into the cost-benefit-assessment. 

89 Includes funding for EFSI projects in other energy sub-sectors, beyond renewables. 
90https://ec.europa.eu/energy/sites/ener/files/documents/2014_nsog_report.pdf 

67 

 
 
 
 
 
                                                            
of 

which  is  currently  part  of  a  priority  corridor  under  TEN-E.  This  was  also  the  main 
outcome  of  a  recent  joint  event  by  the  Renewables  Grid  Initiative  and  WindEurope: 
"(…) renewable  energy  producers  –  including  wind  –  and  grid  operators  need  to  work 
together  more  closely. Defining  the  future  energy  landscape  requires  joint  planning  on 
the  development  of  new  transmission  lines. This should  take  into  consideration  the 
sectors, as  well 
expansion 
as environmental  and  social  impacts  (…)".91.  Renewables  development  is  currently 
mostly  driven  by  Member  States  through  national  support  schemes  and  national  plans 
that remain largely un-coordinated. Support schemes that include cross-border elements, 
for instance when competitive bidding processes allowed the participation of producers 
from  other  Member  States,  auctioning  prices  tend  to  be  lower,  enhancing  the 
competitiveness of renewable energies92. A similar EU-wide coordination for renewables 
deployment in the EU is still at its initial phase 

renewables and the 

electrification 

other 

of 

Over the past 10 years, Member States did not engage significantly in transnational co-
operation  on  RES  deployment  and  the  role  that  the  cooperation  mechanisms  were 
expected to have for the growth of renewables in Europe up to 2020 did not materialise - 
despite the socio-economic benefits of a more regional approach (see below) and despite 
the  fact  that  those  have  been  and  are  promoted  in  several  Articles  of  the  2009  RES 
Directive  (as  quoted  above),  a  guidance  document  on  cross-border  cooperation  from 
201393 and relevant wording in the current energy and environment state aid guidelines.  

With 2020 approaching and Member States having more clarity on whether they will be 
able to meet the target on their own, the last two years saw the emergence of two more 
cases  of  cross-border  cooperation  -  the  statistical  agreements  between  Luxemburg  and 
Lithuania94, as well as Estonia95.  

Table 1: List of implemented cooperation mechanisms  

Cooperation  type  and 
countries involved 

Joint certificate scheme 
Norway - Sweden  

Year   Status/comments 

2012  Since  January  2012,  Sweden  and  Norway  operate  a 
joint  certificate  scheme  for  supporting  renewable 
energy. The target is to increase electricity production 
based  on  RES  in  Sweden  and  Norway  by  28.4  TWh 
until 2020.  

91https://renewables-grid.eu/publications/press-releases/detail/news/smarter-roll-out-of-electricity-grids-makes-
integrating-35-renewables-easier-and-cheaper.html 

92 The results of the first cross-border tender for renewable electricity in Europe is an illustration of how a 
 Member State can limit the costs of financing renewables through allowing foreign electricity generators to bid in the  
auction. The 50 MW photovoltaic tender organised by Germany and open to Danish generators achieved an awarded  
price (5,38 cents/kWh) that were more than 25% lower the last German tender for only-German individual installations  
(7,25 cents/kWh). The good response obtained by the tender, with bids totalling almost fivefold the amount procured  
and half of it represented by foreign installations shows also the willingness of generators to participate in a broader  
market. 
93SWD(2013) 440 final 
94 https://ec.europa.eu/info/news/agreement-statistical-transfers-renewable-energy-amounts-between-lithuania-and-

luxembourg-2017-oct-26_en  

95http://www.tuuleenergia.ee/en/2017/11/estonia-luxembourg-sign-eur-10-5-mln-renewable-energy-agreement/ 

68 

 
 
 
 
                                                            
Cross-border PV 
auctions  

2016 

Denmark - Germany  

2017 

Statistical 
transfers 
Luxembourg - Lithuania 
and 
- 
Estonia 

Luxembourg 

Krieger's Flak  

2009 
for 
grant 

In  July  2016,  Denmark  and  Germany  signed  a 
cooperation  agreement  allowing  for  a  mutual  cross-
border  participation  in  auctions  for  PV  installations. 
The  agreement  sets  the  framework  for  two  pilot 
auction rounds in Denmark (20 MW auction, 2.4 MW 
opened for installations in DE) and Germany (50 MW, 
fully  opened  for  installations  in  DK).  Both  auctions 
were run in 2016. The cooperation links to the state aid 
decisions on the support schemes for renewable energy 
in  both  countries.  Both  decisions  include  the  partial 
opening  of  auctions  for  electricity  for  renewable 
energy (to comply with Art. 30/110 TFEU). 

In October 2017, the first statistical transfer agreement 
was  signed  between  Luxembourg  and  Lithuania,  in 
November  2017  the  agreement  between  Luxembourg 
and  Estonia  followed.  The  transfers  will  cover  the 
period  from  2018-2020  and  will  to  help  Luxembourg 
fulfil its 2020 national renewable energy target. 

Krieger's  Flak  CGS  (Combined  Grid  Solution)  is  a 
transmission  project  with  an  offshore-wind  park-
system in the Baltic Sea in the waters of the exclusive 
economic  zone  of  Denmark,  Germany  and  Sweden. 
The  project  was  initially  set  up  as  a  tripartite  one 
between (Denmark-Sweden-Germany), but reduced  to 
only  linking  the  Danish  and  German  grids  and 
technology-wise  the  transmission  system  which  was 
planned  to  be  based  on  high  voltage  direct  current 
(HVDC)  is  now  built  with  a  more  common  Alternate 
Current  (AC)  system.  An  additional  driver  for  the 
project  was  the  associated  reduced  integration  costs, 
although  the  grant  only  covered  the  grid  aspects.  The 
project has been supported by a 150 million euro grant 
through 
for 
Recovery  (EEPR)  in  2009,  construction  work  is 
ongoing. 

the  European  Energy  Programme 

Table 2: List of so far not implemented cooperations 

Project  
Intended  cooperation  on 
a wind project 
- 
 Ireland 

United 

69 

Status/comments    
Not implemented  The 

two 

countries 

signed 
a 
in 
memorandum  of  understanding 
January  2013.  The  aim  was  to  establish 

 
 
 
 
Kingdom 

DESERTEC 

HELIOS  

an 
intergovernmental  agreement  on 
energy  trading,  to  be  signed  in  2014. 
However,  a  respective  agreement  was 
not  signed  and  discussion  on 
the 
cooperation came to a halt. 

Not implemented  The  DESERTEC  project  relates  to  the 
concept  of  producing  electricity  from 
renewable  energy  in  North  Africa  and 
exporting it to EU Member States under 
Art. 9 of the Renewable energy Directive 
2009/28/EC.  Following  the  creation  of 
the  Desertec  industrial  initiative  (Dii)  in 
in 
2009,  North  African  countries, 
particular  Morocco,  and  EU  Member 
States, including France, Germany, Italy 
and Spain, discussed the implementation 
of a possible first pilot project. In  2012, 
the discussion came to a halt. 

Not implemented  The  HELIOS  project  relates  to  concept 
of  producing  solar  electricity  in  Greece 
and  exporting  to  other  EU  Member 
States.  The  project  was  proposed  by  the 
2011.  An 
Greek 
agreement  with  a  possible  off-taker 
country was not concluded. 

government 

in 

As can be seen from the above listing, where intergovernmental cooperation took place 
in the past, in several cases projects did not materialise, or at least not as planned, even 
with a grant from the EU budget. The underlying complexity and the substantial time and 
resources  that  would  have  been  required  explain  why  such  envisaged  cooperations  did 
not move forward.  

With regard to  offshore  projects, the European vision for a North  Sea offshore  meshed 
grid  was  launched  back  in  2010,  planning  for  future  large  volumes  of  offshore  wind 
linked with maritime interconnectors for cross-border electricity transmission. However, 
progress is thus far rather slow, as was also observed at the specific stakeholder event to 
inform the present Impact Assessment that took place on 5th March 2018 in Brussels (see 
preceding Annex for more details). What one can observe at this stage is that currently 
several  interconnectors  are  planned  in  the  North  Sea,  but  all  are  point-to-point 
transmission links. Merely the 1400MW "FAB Link" UK-France project may eventually 
be connected to an offshore tidal energy project96.  

II. THE PROBLEM AND ITS DRIVERS  

2. 1. Problem: Foregone gains from uncoordinated RES deployment in the EU 

96 The project was originally conceived as an interconnector via the island Alderney where 3 GW tidal power capacity  
was to be developed. At this stage the interconnector goes ahead for 1.4 GW (less than the planned capacity of the 
offshore source, with the construction of the tidal plant being delayed).  

70 

 
 
 
 
 
                                                            
The  national  approach  to  renewables  implies  that  deployment  is  not  necessarily 
prioritising  the  best  spots:  Where  resources  are  more  abundant;  where  overall  system 
costs  would  be  minimised  (e.g.  reduced  need  for  back-up,  avoided  grid  investments); 
where  overall  social  benefits  would  be  maximised  (e.g.  increased  security  of  supply, 
avoided  local  air  pollution,  employment  effects,  innovation  transfer  effects).  From  an 
EU perspective,  renewable  energy tends to  be exploited not necessarily  where  it is 
most efficient to do so from a natural resources/geographical conditions/grid/alternative 
fuel infrastructure perspective.  

The  economic  benefits  that  could  arise  from  using  better  Europe's  resource  potentials 
have  been  confirmed  by  a  number  of  studies  and  modelling  efforts.  Most  recently,  the 
modelling  underpinning  the  Clean  Energy  package  of  November  2016  revealed  that 
cross-border opening of national support schemes would result in reduced energy system 
costs  ranging  from  EUR  1.0  billion  (partial  opening)  to  EUR  1.3  billion  (mandatory 
regional  schemes)  annually  for  the  period  2021-2030,  while  at  the  same  time  reducing 
renewable energy support costs paid by the consumer by 3% and 5% respectively.97 
A study carried out for the European Commission on the benefits of  a meshed offshore 
grid  in  the  Northern  Seas  of  201498  estimated  the  annual  savings  including  costs  of 
losses,  CO2  emissions  and  generation  savings  to  be  EUR  1.5  to  5.1  billion  higher  per 
year for the coordinated grid. These monetized benefits make the meshed grid profitable 
in  all  studied  scenarios  and  for  a  wide  range  of  fuel  and  CO2  costs.  When  states  also 
coordinate  their  reserve  capacity,  an  additional  EUR3.4  to  7.8  billion  generation 
investment  cost  reduction  is  obtained.  On  top  of  the  monetized  benefits,  there  are  less 
CO2 emissions and less cables making landfall in the meshed configuration. The same 
study  also  concluded  that  in  order  to  realise  this  benefits  of  coordinated  grid 
development, coordination between all stakeholders has to be enabled. 

A  2014  study  by  the  Imperial  College  London  on  the  North  Seas  Grid  infrastructure99 
concluded  that  an  integrated  approach  to  offshore  electricity  grid  development  in  the 
North  Seas  can  lead  to  EUR25-EUR75  billion  savings  in  operation  and  network 
investment  costs  as  well  as  EUR3.4-EUR7.8  billion  in  generation  investment  costs, 
lowering  average  cost  of  electricity  production  by  0.8-2.2  €/MWh.  However,  if  each 
country  were  to  develop  its  own  renewable  power  supply  and  network  infrastructure 
independently  from  their  neighbours,  there  will  be  no  possibility  for  offshore  wind 
generators  to  directly  dispatch  electricity  to  different  markets  other  than  that  of  the 
connected country. Further studies came to similar results for cost savings in cross border 
renewables cooperation in general (not only in offshore wind deployment).100  

The  reasons  preventing  (sufficient)  cooperation  are  well  known  and  documented  for 
years.  The Commission's  2013 guidance document on cross-border cooperation already 
provides a comprehensive list of barriers. This diagnosis was since confirmed in several 
studies with most details possibly contained in a 2014 study carried out for the European 

97SWD (20160 418 final 
98https://ec.europa.eu/energy/sites/ener/files/documents/2014_nsog_report.pdf  
99https://www.e3g.org/news/media-room/how-to-build-a-north-seas-grid-without-regretting-it  
100 https://link.springer.com/content/pdf/10.1007%2Fs12398-014-0125-0.pdf ; 

http://orbit.dtu.dk/files/59386176/Renewable_energy_63_p_345_352_postprint.pdf; 
http://www.nature.com/articles/nclimate3338 

71 

 
 
 
                                                            
Commission  that  based  its  findings  on  interviews  with  representatives  from  11  EU 
Member States in different stages of renewables deployment.101 

The identified main barriers to more cross-border cooperation in renewables are:  

1.  (Perceived)  technical  complexity  of  designing  the  most  appropriate  cooperation 
model  and  reluctance  to  take  associated  "first  mover  risk".  Perceived  uncertainty  and 
complexity of cost and benefit sharing arrangements between Member States. 

Almost  all  Member  States  that  were  interviewed  as  part  of  the  2014  Ecofys  study, 
referred  to  above,  mentioned  uncertainty  on  the  design  options  of  cooperation 
mechanisms  as  a  barrier.  Among  other  aspects,  the  compensation  of  consumers, 
monitoring  and  operation,  accounting  of  RES  amounts  for  target  fulfilment  and  risk 
allocation  were  cited  as  components  that  would  need  either  more  specific  guidance  or 
knowledge sharing. A proof that complexity is not only a perceived, but actually a real 
issue  could  be  that  the  statistical  transfers  by  Luxemburg  –  the  presumingly  least 
complex form of cooperation - took the governments several years to settle102. ENTSO-E 
confirmed at the expert workshop that cost-benefit assessment of integrated projects with 
a generation component are more demanding and therefore the meshed grid in the North 
Sea  is  still  a  medium  to  long-term  vision.  The  technical  complexity  was  emphasised 
again by stakeholders present at the expert stakeholder workshop including the Spanish 
and  Austrian  government  representatives,  complemented  by  the  German  representative 
who described the EU as still being in a "learning phase on cooperation". WindEurope 
and MOT103 thus called on the Commission to provide an update of the 2013 guidance 
document among other action.  

In a similar vein, Member State sometimes name the reluctance  of countries to assume 
the  first-mover  risks,  i.e.  engaging  in  cooperation  mechanisms  without  building  on  the 
experience  and  best-practices  of  other  countries  that  have  done  so  previously,  as  a 
barrier:  "Without  first  projects  that  could  be  used  as  a  reference  for  price  setting,  the 
Member State was hesitant to use cooperation mechanisms himself."104 

In  the  2016  online  public  consultation  supporting  the  REFIT  evaluation,  90  %  of 
respondents  considered  uncertain  benefits  for  individual  Member  States  as  a  very 
important  or  important  obstacle.  As  demonstrated  in  a  study  of  the  Institute  of  Energy 
Economics, University of Cologne105 that analysed the national renewables action plans 
of  Member  States  until  2014,  administrative  issues  and  questions  concerning  the  fair 
sharing of costs and benefits between the Member States represent major obstacles that 
need to be tackled in order to reach renewable energy targets at the lowest costs possible. 
EU  MS  declared  that  there  is  no  clear  common  understanding  of  how  cooperation 
mechanisms could work in practice or a lack of information concerning the potential for 
joint  projects  in  other  MS  or  third  countries.  The  Ecofys  2014  study  concludes  on  this 

101 https://www.ecofys.com/files/files/ec-ecofys-tuvienna-2014-cooperation-member-states-res-directive.pdf  
102 MEP Claude TURMES from Luxemburg at the 5th March 2018 expert workshop in Brussels and REFIT evaluation 

supporting the review of the RES Directive SWD (2016) 0416 final. 

103La Mission Opérationnelle Transfrontalière (MOT), French government.  
104https://www.ecofys.com/files/files/ec-ecofys-tuvienna-2014-cooperation-member-states-res-directive.pdf, page 12. 
105https://link.springer.com/content/pdf/10.1007%2Fs12398-014-0125-0.pdf 

72 

 
 
 
 
 
 
                                                            
issue that "further insights to governments on quantifiable costs and benefits of specific 
projects would help to inform the discussion".106  

2.  Domestic  policy  considerations  –  in  particular  communicating  to  the  national 
electorate  the  benefits  of  cooperation  over  reliance  on  domestic  resources  (with  their 
various perceived economic benefits) 

The political willingness of Member States to engage in cooperation is a prerequisite, but 
Member States highlight public acceptance as a barrier preventing them from pursuing 
cooperation  mechanisms  more  actively.  Governments  face  difficulties  to  communicate 
the  costs  and  benefits  of  cooperation  mechanisms  to  their  national  electorate.107 
Interestingly  this  problem  does  not  only  occur  with  the  buying  country  that  needs  to 
explain to  its  tax  payers  that  it  is  partly  sponsoring  investment  abroad, but  also  for  the 
receiving  country  that  could  find  itself  in  a  situation  to  explain  to  its  citizens  why  it  is 
beneficial  to  exploit  domestic  resources  beyond  the  own  energy  needs.  The  public 
consultation underpinning the REFIT evaluation on the RES Directive in 2016 revealed 
again a reluctance to see taxpayers or consumers' money used for investments abroad108 
as main reasons for the limited use of cooperation mechanisms. Indeed, the majority of 
respondents  support  such  view,  arguing  that  benefits  in  the  form  of  employment, 
economic  and  industry  growth,  tax  income  and  security  of  supply  are  thus  not  created 
within the own country. This observation was confirmed again by a representative from 
the  renewables  industry  at  the  expert  workshop  in  2018  stating  that  the  main  barrier  is 
"the  not  unreasonable  view  by  Member  States  that  RES  should  first  and  foremost  be 
deployed  at  home".  The  lack  of  incentive  with  every  Member  State  to  start  including 
cross-border elements results in a first mover disadvantage where the one that moves first 
and without prior agreement by the other actors stands to lose. Besides public acceptance 
issues,  concerns  about  giving  up  national  sovereignty  through  the  engagement  in 
cooperation mechanisms were mentioned. Cooperation mechanisms could interfere with 
domestic  support  schemes  or  domestic  policy  preferences  such  as  the  security  of 
supply.109 

3.  Investments  in  cross-border  RES  projects  can  be  hindered  by  conflicting  national 
interests and/or insufficient coordination between grid operators and RES generation 
project promoters. 

RES potential e.g. in South East Europe may not be exploited because a Member State 
lacks  the  financial  means  or  energy  needs  to  do  so  on  its  own  or  because  the  project 
requires  coordination  with  other  Member  States  to  take  place  (e.g.  investment  in 
interconnections  is  needed  to  reap  full  benefits,  even  though  this  could  bring  benefits 
across several Member States). In 2017, IRENA estimated Southern and Eastern Europe 
to  hold  a  potential  of  renewable  resources  of  740GW110.  This  represents  twice  the 
economically  attractive  potential  by  2030  in  the  North  Seas111.  Also  the  Baltic  Sea  has 

106 https://www.ecofys.com/files/files/ec-ecofys-tuvienna-2014-cooperation-member-states-res-directive.pdf 
107 https://www.ecofys.com/files/files/ec-ecofys-tuvienna-2014-cooperation-member-states-res-directive.pdf  
108 94% of public consultation respondents cite this factor as important or very important 
109https://www.ecofys.com/files/files/ec-ecofys-tuvienna-2014-cooperation-member-states-res-directive.pdf 
110http://www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/IRENA_Cost-

competitive_power_potential_SEE_2017.pdf?la=en&hash=DE44F51BDDFB43D4CB8D880B5AB71713447BA04  

111https://windeurope.org/wp-content/uploads/files/about-wind/reports/Unleashing-Europes-offshore-wind-

potential.pdf  

73 

 
 
 
 
 
                                                            
significant unexploited potential and could according to the wind industry be as big as 9 
GW by 2030. 

National decisions on RES infrastructure (in particular of large projects) can carry cross-
border  impacts  in  terms  of  intangible  benefits,  but  also  on  the  use  of  networks  and 
flexibility needs.  

The importance of coordination between grid developers and RES generation promoters 
was already highlighted as one contributing factor to the delays with the meshed North 
Sea  Grid.  Participation  of  all  relevant  stakeholders,  particularly  market  participants,  to 
ensure  pragmatic  and  practical  solutions  was  also  given  as  one  of  the  most  important 
success factors for renewables cooperation in a 2015 study. 112It could be seen in the past 
(with  cases  of  RES  capacity  additions  that  were  not  fully  matched  with  timely  grid 
developments resulting in curtailment and re-dispatching needs due to congested grids), 
that  having  more  comprehensive  information  on  what  is  planned  on  renewables 
development at the moment when transmission operators plan the grid extensions can be 
useful. Secondly, coordination can lead to lower needs for transmission, generation and 
back up infrastructure.  

2.2. The scope of the problem 

The consequence of the above is that achievement of the EU renewables target and the 
energy  transition  can  become  more  costly  than  necessary  for  EU's  Member  States, 
project promoters, taxpayers and consumers, especially when looking at the "full costs" 
of  RES  (including  in  particular  grid  development  and  integration  costs),  when 
underexploited  areas  with  good  conditions  are not  used,  because  a  Member  State  lacks 
the financial means or energy needs to do so on its own, when Member States interests 
are  not  aligned,  or  when  the  complexities  in  setting  out  such  cooperation  regimes  are 
(perceived) higher than the benefits.  

The  relevance  of  gains  from  cooperation  is  expected  to  increase  in  the  future  with 
renewables  estimated  to  have  around  50  %  share  in  EU  electricity  production  in  2030. 
Renewables  will  continue  to  play  a  major  role  in  the  decarbonisation  of  the  European 
economy and in meeting Europe's commitments under the Paris process. Higher share of 
variable  renewables  also  means  that  grid  and  integration  costs  will  become  an 
increasingly  acute  issue  that  requires  optimisation  of  renewables  planning  and 
deployment, including across Member States.  

IV. NECESSITY AND EU ADDED VALUE  

Necessity 

A legal basis for the extension of the new CEF to renewables is provided by Article 194 
TFEU  that  explicitly  lists  the  promotion  of  renewables  as  one  of  the  objectives  of  EU 
energy policies. In addition Art. 3(4) of the recast Renewables Directive113 stipulates that 
"the Commission shall support the high ambition of Member States through an enabling 

112https://www.ecofys.com/files/files/hbf-ecofys-2015-regional-cooperation-res.pdf  
113COM/2016/0767 final.  

74 

 
 
 
 
 
 
 
 
                                                            
framework  comprising  the  enhanced  use  of  Union  funds,  in  particular  financial 
instruments". 

The  necessity  of  the  EU  to  intervene  is  evident  from  the  above  description  of  the 
underlying  problem  drivers,  which  also  are  due  to  diverging  interests  of  EU  Member 
States  (distribution  of  benefits  and  costs  from  cooperation  fall  uneven  among  Member 
States  and/or  few  incentives  for  a  country  with  high  RES  potential  to  allow  another 
country  to  explore  it)  that  prevent  cooperation  from  happening  and  leave  European 
public goods delivered at sub-optimal levels (e.g.: an optimised deployment of RES). At 
the  same  time  national  energy  policies  increasingly  affect  each  other,  impacting  the 
energy  mix  of  neighbouring  countries  through  cross-border  trade  and  electricity  flows, 
especially in the context of improved cross-border electricity trade.  

The crucial role of the national targets until 2020 for successful cooperation in the past is 
evidenced  in  research,  with  Ecofys  2014  stating  that  "without  strong  incentives  to 
cooperate beyond  2020 such  long-term joint endeavours  and investments are  unlikely". 
The new collective and binding target for renewables for 2030 could also be described as 
a European public good: The European Commission and the Member States are jointly 
bound by this target, but there is the possibility of single Member States to not contribute 
to  it  and  free-ride.  Vice  versa,  the  currently  more  advanced  Member  States  might  feel 
that they have already delivered their share and that others will need to step up.  

EU added value  

Such  coordination  between  Member  States  can  be  done  only  at  macro  regional  level. 
Experience  shows  that  the  Commission's  facilitating  role  has  bene  decisive  in  such 
contexts.  Reinforced  cooperation  can  bring  economies  of  scale,  avoid  duplication  of 
infrastructures,  increase  deployment  across  Europe  to  better  reflect  the  available 
potential, contribute to policy convergence and thus to further market integration (with an 
example  often  referred  to  being  the  different  requirements  for  signalling  red  stripes  on 
windmill  blades  in  different  national  legislation),  knowledge  transfer  and  uptake  and 
replication  of  innovative  technologies  in  the  European  home  market.  It  was  precisely 
such EU added value that provided also the justification for granting support for selected 
offshore  projects  under 
the  European  Energy  Economic  Recovery  Programme 
(Regulation (EC) No 663/2009). 

III. COMPLEMENTARITY WITH OTHER PROGRAMMES  

The TEN-E Regulation and the existing strand of CEF-Energy and its priority corridors 
on electricity transmission grids, and efforts for EU grid integration in a wider sense have 
and  will  need  to  continue  playing  a  key  role  in  supporting  the  transformation  of  the 
energy sector as this brings flexibility that is the key to managing intermittent renewable 
sources.  The  new  supporting  framework  for  renewables  cross-border  cooperation 
shall thus not  crowd out electricity transmission investment, but  rather complement 
and facilitate them further.  

Strengthened regional cooperation including the articulation from all stakeholders in the 
energy sector can provide a solid base for more efficient integration of renewables. Better 
knowledge  on  the  costs  and  benefits  for  renewables  projects  could  help  informing  also 
the  assessment  of  grid  projects  in  the  future,  as  put  forward  by  a  Member  State's 
representative and E3G. 

75 

 
 
 
 
 
 
 
As  could  be  demonstrated  above  and  also  accordingly  to  what  was  stated  in  the  2014 
study on the meshed grid for the Commission114, a more integrated approach to grid and 
RES planning/deployment could be beneficial also for the meshed North Sea grid which 
is currently part of a priority corridor under TEN-E. This was also the main outcome of a 
recent  joint  event  by  the  Renewables  Grid  Initiative  and  WindEurope:  "(…) renewable 
energy  producers  –  including  wind  –  and  grid  operators  need  to  work  together  more 
closely. Defining the future energy landscape requires joint planning on the development 
of  new  transmission  lines. This should  take  into  consideration  the  expansion  of 
renewables and the  electrification  of  other  sectors, as  well  as environmental  and  social 
impacts (…)".115 

The North Seas energy cooperation116 indeed has this more integrated approach also as 
one of its objectives. However, it does not have any budget with which to overcome the 
cross-border related barriers. Also the new cooperation instrument would aim to replicate 
cooperation  in  other  parts  of  Europe  and  on  other  technologies  besides  offshore  wind. 
For example, it might be an important venue for the EU industry in the view of global 
competitiveness  to  develop  hybrid  wind  and  solar  photovoltaic  projects  or  advance  in 
floating or ocean technologies - all of which can for legal base reasons not be done under 
TEN-E  and  is  at  least  for  the  moment  also  not  discussed  in  the  North  Sea  Offshore 
cooperation.  

The  European  Structural  and  Investment  Fund  has  resulted  in  ca  4.8  billion  Euros 
allocated by Member States for renewables under the low carbon earmarking obligation 
in 2014-2020. It did not obligate Member States to invest in renewables (and in fact not 
all of them allocated ESIF to renewables), but those that wished to do so, could support 
local  and  regional  renewables  deployment,  implement  renewables  investments  e.g.  as 
part  of refurbishment of  buildings and/or integrate  a renewables  dimension  into  the so-
called smart specialisation strategies. The EU support via ESIF does not have as an aim 
to  facilitate  Member  States'  joint  planning  or  deployment,  but  rather  supports  regional 
and  urban  action  and  knowledge  sharing.  Transnational  cooperation  under  ESIF 
(INTERREG  B  and  C)  is  supporting  bordering  regions  from  several  countries  facing 
similar challenges and can occasionally include the territory of a full Member State, but 
is not meant to facilitate whole Member States cooperating. The scope of INTERREG B 
and C is wider than renewables, but did in the past support coordination and exchange of 
best practice of bordering regions also for renewables.  

Financing  through  EFSI  has  become  a  major  source  of  funding  for  renewables, 
successfully  contributing  to  de-risking  of  RES  investment  in  particular  for  large 
infrastructure projects. EFSI has already provided EUR 3.2 billion of EFSI financing  to 
renewables resulting in more than 24 billion total investment. The relevance is expected 
to continue in the future with the 40 % earmarking foreseen for energy and climate in the 
new  EFSI.  EFSI  is,  as  well  as  the  new  InvestEU  programme  will  be,  a  bottom-up 
programme  that  relies  on  project  proposals  to  be  driven  by  the  market.  It  will  greatly 
contribute to renewables development in a national context, it can however not overcome 
failures  and  complexities  of  cross-border  projects  as  set  out 
coordination 

114https://ec.europa.eu/energy/sites/ener/files/documents/2014_nsog_report.pdf 
115https://renewables-grid.eu/publications/press-releases/detail/news/smarter-roll-out-of-electricity-grids-makes-
integrating-35-renewables-easier-and-cheaper.html 
116 https://ec.europa.eu/energy/en/topics/infrastructure/north-seas-energy-cooperation  

76 

 
 
 
                                                            
above.Furthermore,  the  new  to  be  set  up  Invest  EU  Fund  will  cover,  as  is  the  case  for 
CEF energy in general, also the RES related financial instruments part.  

The Innovation Fund (successor of NER 300) will provide support for innovative low 
carbon  technologies  including  for  renewables  projects.  Innovfin  –  Energy  Demo  – 
Complementing  Horizon  2020  and  NER  300,  provides  financial  instruments  that  target 
the demonstration of innovative RES technologies.  
The  intended  opening  for  cross-border  cooperation  in  renewables  under  CEF  would 
complement  the  aforementioned  instruments  as  it  would  also  provide  support  for  non-
innovations  such  as  action  combining  already  established  RES 
technological 
technologies and/or targeting market uptake. Finally, the new instrument would become 
an effective and complementary tool to help Member States in the reporting and planning 
of  the  national  energy  and  climate  plans  established  in  the  proposed  Governance 
Regulation, in particular with respect to its regional dimension. A possible future link to 
the  financial  platform  to  be  set  up  by  the  Commission  under  Art  27  of  the  proposed 
Governance Regulation could be explored. The new instrument would also underpin the 
provisions  on  mandatory  partial  opening  of  support  schemes  proposed  by  the 
Commission under the recast of the Renewables Directive.  

V. POLICY OBJECTIVES 

In line with the problem statement above and also reflecting the changed policy context 
with a Europeanisation of renewables target achievement after 2020 and innovation and 
leadership  ambitions,  the  objectives  of  the  new  enabling  action  for  cross  border 
cooperation would be the following:  

General  objective:  enabling  a  cost-effective  EU  target  achievement  by  2030  and  cost 
effective energy transition, reflecting also the Juncker Commission ambition of the EU as 
the world leader in renewables 

Specific objectives:  

  Facilitate cooperation in cross-border planning and deployment of renewables by 

overcoming the persisting barriers and disincentives  

  Facilitate that the collective EU-level renewables  target  for 2030 and renewable 
energy integration is met cost-effectively and that CEF further contributes to the 
energy transition and 2030 and 2050 decarbonisation commitments.  

  Contribute to improving the EU's competitive position in renewables and the EU 

leadership ambition for all renewables technologies  

VI. POLICY OPTIONS AND BRIEF OUTLINE OF IMPACTS  

The following options have been identified:  

  Option 1: Business as usual (baseline) 

  Option 2: Reinforced voluntary cooperation and/or revised non-legal guidance  

  Option  3:  Establishing  an  enabling  framework  for  cross-border  cooperation  on 

renewables  

77 

 
 
 
 
 
 
 
 
Variant 1: additional legal provisions to be included in the CEF Regulation, but 
with no financial support 

Variant 2: same as above but with access to additional finance in CEF  

1. Business as usual (baseline) 

Under the baseline scenario we assume that the Clean Energy Package will be adopted 
in  its  integrity  and  that  CEF  is  implemented  as  described  above-  but  not  including  the 
extension  of  scope  towards  renewables.  Also  other  currently  existing  financial 
programmes are assumed to continue with their current scope.  

The  Clean  Energy  package  will  already  include  the  following  provisions  that  are 
expected to contribute to a more regional approach towards renewables deployment and 
planning: An obligation for Member States "to cooperate at regional level to effectively 
meet  the  targets,  objectives  and  contributions  set  out  in  the  integrated  national  energy 
and  climate  plans."  (Article  11  of  the  Governance  Regulation).  The  same  article  then 
continues  to  request  from  Member  States  to  identify  opportunities  for  cooperation,  to 
consult with neighbouring countries and to consider any comments from those countries.  
Again in the same article the Commission is called upon to "facilitate cooperation and 
consultation among the Member States on the draft plans".  

As mentioned above, with regard to the binding EU target for renewables, the approach 
followed  in  the  Clean  Energy  Package  is  to  give  Member  States  the  final  say  in  their 
national contribution towards the target, but also to incentivise high pledges through the 
iterative  process  established  in  the  Governance  regulation,  where  the  Commission  may 
issue recommendations to draft integrated energy and climate plans (Art 9.2 Governance 
Regulation)  taking  into  account  the  level  of  ambition  of  objectives,  targets  and 
contributions in view of collectively achieving the Union’s 2030 target. Additionally, the 
finally adopted version of the revised Renewables Directive will in all likelihood contain 
an Article on partial opening of renewables support schemes (Article 5). The voluntary 
cooperation fora for energy matters (North Seas Offshore Cooperation, BEMIP, CESEC, 
Pentalateral Forum) would continue to operate and the development of the meshed North 
Sea  Grid  would  continue  at  its  current  pace  delivering  in  the  medium  or  long  term  as 
explained above. 

Under  this  option,  it  can  be  expected  that  over  the  next  few  years  some  more  progress 
will  be  made  with  regard  to  regional  cooperation  for  renewables  with  Member  States  -
who  are  under  the  new  2030  Governance  obligated  to  reflect  on  the  cooperation 
opportunities.  The  existing  fora  for  intergovernmental  cooperation  will  continue  their 
work  -  and  in  the  case  of  CESEC  and  BEMIP  start  -  on  renewables  cooperation. 
However, there would still not be targeted action or a budget for the costs associated with 
overcoming the barriers identified above that currently prevent cross-border action from 
happening and Member States from investing into the additional cost of coordination.  

The  Commission  would  under  this  option  also  not  respond  to  the  call  from  the  co-
legislators  to  enable  cross-border  action  in  the  area  of  renewables,  including  through 
finance.  This  might  then  again  make  it  more  difficult  for  the  Commission  to  request 
additional  action  by  Member  States  and  in  particular  on  renewables  as  part  of  the 
recommendations  under  the  Governance  Regulation.  The  finally  agreed  text  on  the 
revised  Renewables  Directive  will  most  probably  contain  some  provisions  for  Member 

78 

 
 
 
 
 
 
 
States to partially open the RES support schemes, although it is at this point in time not 
clear  whether  this  would  become  a  mandatory  or  voluntary  clause.  Whilst  a  partial 
opening  of  national  support  schemes  is  one  element  in  order  to  reap  the  benefits  of  a 
more  coordinated  approach,  this  provision  does  not  apply  to  the  other  forms  of 
cooperation  and  more  importantly  does  not  overcome  the  national  perspective  in 
planning and deployment in the first place. 

It  is  however  to  be  expected  that  not  all  the  benefits  described  in  Section  II.2.1  of  this 
Annex 3 will be realized. It should be noted that in the expert workshop held to gather 
stakeholders view on the extension of scope of CEF, none of the around 60 stakeholder 
present intervened or submitted input describing the baseline as sufficient.  

2. Reinforced voluntary cooperation and/or revised non-legal guidance  

Under this option, the context would evolve as described for the baseline, but in addition, 
the  Commission  would  issue  an  update  of  the  guidance  document  on  cross-border 
cooperation from 2013 and/or reinforce its input to the voluntary cooperation fora 
that  exist.  This  would  take  up  on  a  proposal  that  was  also  put  forward  by  several 
stakeholders  at  the  expert  meeting,  in  particular  if  it  were  to  include  detailed  lessons 
learnt from cooperation that have occurred between 2013 and today. However it should 
be  noted  that  most  of  those  who  intervened  with  suggestions  for  improved  or  updated 
guidance did not feel that this was the only additional element that would be needed, but 
rather  suggested  it  as  part  of  a  package  complemented  e.g.  by  additional  legislative 
provisions to improve coordination. With a revised non-legal guidance document, details 
could be made available on how concretely a bilateral agreement (until now there was no 
trilateral  cooperation)  needs  to  be  drafted  and  topics  to  be  taken  into  account. 
Alternatively  or  additionally,  the  Commission  could  re-enforce  the  support  it  currently 
provides to the intergovernmental fora on energy matters, however this will be within the 
limitations of not having additional resources for that. This option would most certainly 
accelerate  renewables  cooperation  in  those  geographical  areas  and/or  sectors  that  are 
currently covered  by such a forum, even  though it was noted in  a report from 2015117 
that  the  progress  occurred  on  existing  renewables  capacity  rather  than  on  future  RES 
deployment thus far. This progress might not go as far as to address the important issues 
that  will  condition  renewables  deployment  over  the  next  decade  e.g.  the  most  efficient 
use of RES potential across Europe.  

3. Establishing an enabling framework for cross-border cooperation on renewables 

Variant  1:  additional  legal  provisions  to  be  included  in  the  CEF  Regulation,  but 
with no financial support 

Variant 2: same as above but with access to additional finance in CEF  

Both variants can be combined with the content of option 2.  

Replicating  the  logic  established  with  the  TEN-E  framework,  two  variants  will  be 
considered  for  the  extension  of  scope:  One  in  which  only  a  regulatory  enabling 
framework for cross border cooperation will be set up (variant 1) vs. one in which such a 

117 https://www.ecofys.com/files/files/hbf-ecofys-2015-regional-cooperation-res.pdf 

79 

 
 
 
 
 
 
 
 
 
                                                            
framework will also be complemented by financial support through the EU budget (CEF) 
(variant  2).  The  cross-border  component  on  renewables  will  not  be  underpinned  by 
separate  sectoral  guidelines  as  is  the  case  for  the  current  energy  part  under  CEF. 
However,  the  Clean  Energy  Package  already  contains  a  number  of  provisions  that 
actually address regulatory issues for cross border cooperation:  
-  The  proposed  revised  Directive  for  Renewables  foresees  an  Article  on  limits  for 
duration for authorisation procedures (for all RES projects, not only cross-border ones), 
basic principles for support schemes including partial opening,  

The proposed Electricity Regulation contains rules on RES market integration, including 
principles on rules on grid costs and grid connection rules.  

The  subsidiarity  assessment  underpinning  the  Clean  Energy  Package  of  2016  has  not 
changed  and  further  regulatory  alignment  seems  to  be  disproportionate  and  will  in  any 
event  never  be  able  to  cover  all  national  specificities,  which  also  extend  in  into  other 
areas  of  strict  national  competence  such  as  spatial  planning  and  taxation.  Even  more 
importantly,  and  confirmed  both  by  research  and  statements  from  Member  States  and 
other stakeholders the by far biggest obstacle is indeed the lacking incentive to engage or 
invest in such cooperation.  

However the CEF Regulation will contain for both variants a definition of cross-border 
cooperation on renewables, the definition of the criteria that need to be met in order for a 
cooperation to be selected for the status of a cross-border project in the field of renewable  
energy  ,  the  process  with  which  this  selection  is  being  made  and  the  information  and 
methodology  that  is  being  used  in  order  to  select  projects.  Under  variant  two,  it would 
also  contain  provisions  on  how  to  provide  financial  support  for  cross-border  project  in 
the field of renewable energy. The cross-border project in the field of renewable energy 
status would not result in any fast track procedure or priority treatment.  

To  address  the  issue  of  uncertainty  around  the  allocation  of  benefits  and  costs  among 
various Member States, it could be envisaged to include provisions similar to those in the 
TEN-E (Article 12) guidelines specifying rules on the allocation of costs (variant 1) or 
under  variant  2  financial  support  for  studies  could  be  offered  to  Member  States  that 
could be used for exactly such purpose. Variant 2 seems more appropriate to underline in 
the light of the responses received from Member States and other stakeholders.  

With  regard  to  maximum  permit  granting  period,  Art  16  of  the  proposal  for  a  revised 
Renewables Directive already introduces new rule for permitting procedures (for all RES 
projects, not only  cross-border  ones). There is no need  for amending those rules  as the 
prosed  3  years  maximum  permitting  period  seems  to  be  already  sufficiently  fat  for  the 
generally more complex cross border projects.  

Both  variants  would  contribute  to  a  more  integrated  approach  between  renewables  and 
grid development, with variant 1 expected to provide input for anticipatory grid planning 
by making visible the planned cross-border cooperation in the area of renewables.  

The  new  enabling  framework  would  also  be complementary  and in  line  with  what  was 
announced recently with regard to outermost regions118 and deliver on the EU's territorial 

118 SWD (2017) 349 final. 

80 

 
 
 
 
 
 
 
 
                                                            
cohesion objectives and "take account in particular of the need to link island, landlocked 
and  peripheral  regions  with  the  central  regions  of  the  Union".  A  pure  energy 
transmission  connection  to  the  mainland  is  for  some  of  those  regions  not  the  most 
attractive  and  effective  solution,  hence  integrating  renewables  into  cross  border  action 
can  make  the  new  CEF  more  relevant  for  those  regions  that  tend  to  have  a  significant 
RES potential.  

However,  it  will  be  only  under  variant  2  that  the  biggest  impediments  (such  as  the 
Member  States  reluctance  to  be  the  first  mover,  to  invest  abroad  or  to  invest  in  such 
cooperation without knowing to what extent benefits and costs will fall between Member 
States) will be addressed 

The  enabling  framework  could  put  the  Commission  into  a  better  position  in  order  to 
facilitate target achievement under the 2030 Governance and contribute to all innovation 
efforts  under  the  new  MFF  with  an  emphasis  on  innovative  combinations  of  existing 
technologies and technologies in the stage of market uptake needing upscaling. Variant 1 
without financial support will however be significantly less powerful in overcoming the 
domestic policy concerns that prevent Member States in cooperating more. Only setting 
up new rules and not offering also a component of financial support (as requested by the 
co-legislators) would add to the costs of cooperation that are already present today and 
the EU would also not directly contributing to the collective target.  

Thanks  to  these  enabling  measures  by  the  EU,  it  is  expected  that  cross-border 
cooperation  will  be  put  into  action  leading  to  a  more  cost-effective  deployment  of 
renewables in across the EU. Under variant 1, certain hurdles e.g. the cross border cost 
allocation  would  be  addressed  with  provisions,  its  effectiveness  can  be  expected  to  be 
limited  (as  the  estimation  of  potential  gains  and  attribution  to  specific  Member  States 
may be costly  or  impossible and the benefits may go wider than what can  be allocated 
among the directly involved Member States). The financial component under Variant 2 
could  therefore  finance  programme  support  actions,  technical  assistance  facilitating  the 
coordination among Member States, studies notably to facilitate the cost-benefit analysis 
of rational projects and grants to compensate for the positive externalities, such as wider 
economic  benefits  to  the  society  which  however  represent  additional  costs  to  the 
promoters. 

An EU financial contribution could finally be justified based on the delivery of EU wide 
benefits  such  as  collective  target  achievement,  an  optimised  grid  or  the  innovative 
dividend that can help towards the global leader ambition.  
Based  on  the  above  it  seems  that  regulatory  issues  are  addressed  sufficiently  in  the 
proposed  Clean  Energy Package  so that  additional  provisions  are  only need  in  order to 
define cross border cooperation on renewables, renewables projects of European Interest 
and  their  eligibility  criteria  and  selection  processes.  Given  that  the  biggest  persisting 
barriers  cannot  be  solved  without  addressing  the  costs  of  the  increased  coordination, 
variant 2 is chosen.  

Delivery mechanisms:  

Cross-border project in the field of renewable energy will be eligible for  

81 

 
 
 
 
 
 
 
 
-  grants for studies and technical assistance aimed at identifying and assessing the 
expected impact and costs and benefits of cross-border cooperation in the field of 
renewables 
grants for studies for the implementation of projects 
- 
- 
grants for works for a limited number of projects – only for those projects that can 
demonstrate significant positive externalities of regional significance (such as security of 
supply,  solidarity  or  innovation)  and  that  the  project  would  not  materialise  or  not  be 
commercially viable in the absence of a grant. 

The intervention would be geared towards overcoming the identified market/coordination 
failures/incentive  structure  and  therefore  cover  the  additional  costs  arising  from  cross-
border  and  multi-purpose  infrastructure  planning/  development;  providing  an  incentive 
for  Member  States  to  explore  such cooperation instead  of  only  planning  and  deploying 
nationally and/or compensate for positive externalities occurring elsewhere e.g. for grid 
stability and security of supply.  

In  the  case  of  grants,  it  shall  be  provided  in  the  form  of  upfront  investment  aid.  The 
resulting lower cost of the project to the Member State would be the incentive for them to 
engage  in  such  mutual  beneficial  cooperation  In  particular,  it  could  help  overcome 
political acceptance issues (i.e. preference for deploying RES in the domestic market), by 
making very visible the support cost reduction achieved thanks to the participation of EU 
funds.  The  EU  financial  contribution  would  represent  the  EU's  contribution  to  an  EU-
level  target,  complementing  thus  Member  States  contributions.–  based  on  which  then 
companies in competitive tenders could develop projects. 

The expert workshop also revealed that financial instruments could be particularly useful 
to ensure funding at attractive rates (e.g. loans, equity, junior debt or first loss guarantees, 
EU  budget  guarantee).  In  line  with  Art.  3(4) of  the  recast  Renewables  Directive119  that 
stipulates  that  "the  Commission  shall  support  the  high  ambition  of  Member  States 
through  an  enabling  framework  comprising  the  enhanced  use  of  Union  funds,  in 
particular financial instruments", blending will be a significant component of the future 
instrument and will be fully embedded in the future InvestEU Single Investment Fund.  

VIII MONITORING AND EVALUATION  

The main output indicator would be the number of cooperation mechanisms and Cross-
border  projects  in  the  field  of  renewable  energy  that  emerges  once  the  enabling 
framework  is  in  place.  This  main  indicator  could  be  complemented  by  the  number  of 
intended cooperation (that do not materialize) and the number of preparatory studies by 
Member States that were initiated.  

A  relevant  source  of  information  for  the  progress  on  cross-border  cooperation  on 
renewables will be the reporting under the new Governance Regulation where if adopted 
as  proposed  the  annexed  template  to  be  used  includes  information  on  the  role  that 
regional cooperation plays for all headings (one of which is renewables) and a section in 
which Member States describe the impact of their plan on other Member States.  

119COM/2016/0767 final 

82 

 
 
 
 
 
 
 
 
                                                            
ANNEX 4: FURTHER BACKGROUND REGARDING THE SCOPE OF CEF DIGITAL 

1. CONTEXT 

Delivering  a  digital  single  market  is  the  first  priority  set  for  the  second  half  of  the 
Juncker  Commission's  mandate.  The  benefits  of  a  functioning  digital  single  market  (€ 
415 billion per year to the EU's economy, hundreds of thousands of new jobs) can only 
be  realised  if  the  underlying  broadband  connectivity  is  in  place.  Flagship  projects  like 
5G, the digitisation of European industry, or the modernisation of sectors like healthcare 
or  public  administration  depend  on  universal  access  to  reliable,  affordable  and  high-
quality digital networks. Tomorrow's innovations and their wide take-up can only emerge 
if Europe becomes a truly connected continent.  

Ubiquitous connectivity has become one of the decisive factors to close economic, social 
and territorial divides, making sure that every EU region, including rural and peripheral 
ones,  contributes  to  growth.  In  education  and  life-long  learning,  all  EU  citizens  should 
have access to basic (e-)services. Connectivity increases the capacity of labour market to 
adapt  to  new  challenges  even  in  the  most  disadvantaged  areas,  and  allows  for  a  better 
link between demand and offer, regardless of geographic location. It creates new markets 
and growth environment for SMEs. It also supports the modernisation of local economies 
and  sectors  underpinning  the  diversification  of  economic  activities.  Telemedicine 
technologies and electronic health records not only help reducing the costs of health care, 
especially of elderly care, but also pave the way to a new generation of personalised care, 
patient-centric  and  preventive.  Connectivity  improves  mobility  from  an  efficiency, 
safety,  and  comfort  perspective;  it  supports  an  efficient  energy  grid  management  and 
consumption.  

On  October  2017,  the  European  Council  has  called  for  a  first  rate  infrastructure  and 
communications  network  in  Europe,  in  order  to  successfully  build  a  Digital  Europe, 
which requires  cooperation at the EU level, inter  alia with the aim of achieving world-
class very high-speed fixed and mobile networks (5G) all across the EU. 

In  its  report  on  the  next  MFF:  "Preparing  the  Parliament’s  position  on  the  MFF  post-
2020", the Parliament underlined the importance of ensuring financing for completing the 
digital  single  market  by  making  full  use  of  the  spectrum,  5G  deployment  and  gigabit 
connectivity  

In  the  Opinion  on  "Boosting  broadband  connectivity  in  Europe"120,  the  European 
Committee  of  the  Regions  "supports  efforts  to  promote  broadband  expansion  by 
strengthening cohesion policy, inter alia to ensure it can address the most severe market 
failures in the rural, sparsely populated areas of the EU" and "supports an enhanced role 
for the Connecting Europe Facility (CEF) and EFSI in funding financial instruments and 
blending  facilities  (combining  grants  with  financial  instruments)  to  address  more 
moderate types of market failures […]. Such complementary interventions would ensure 
a high quality broadband connectivity across all regions of the EU". 

The  Proposal  for  a  European  Electronic  Communications  Code,  revising  the  regulatory 
framework  for  electronic  communications  networks  and  services  providers,  aims  inter 

120  

SEDEC-VI/034 

83 

 
 
 
 
 
 
                                                            
alia at promoting access to and take up of very high capacity connectivity, both fixed and 
mobile  by  all  Union  citizens  and  businesses,  by  means  of  creating  a  regulatory 
environment which incentivises private investments in digital connectivity networks. It is 
nevertheless clear that network deployments will remain commercially unviable in many 
areas  throughout  the  European  Union,  due  to  various  factors  such  as  remoteness,  low 
population density, and various other socio-economic factors. 

The  Communication  on  "Connectivity  for  a  Competitive  Digital  Single  Market  - 
Towards a European Gigabit Society"121 (the Gigabit Society Strategy) sets out strategic 
objectives  for  2025,  in  view  of  optimising  investment  in  new  very-high  capacity 
networks:  

Gigabit  connectivity  for  all  main  socio-economic  drivers such  as  schools, 
1.  
transport  hubs  and  main  providers  of  public  services  as  well  as  digitally  intensive 
enterprises. Supporting connectivity for such anchor customers/engines of digital growth 
will significantly improve the business case for operators to serve entire areas where they 
are located, by stimulating demand and lowering deployment costs at the same time. In 
2013  for  example  less  than  10%  of  all  schools122  and  only  16%  of  the  European 
hospitals123 were connected to speeds of 100MBps or above. Nowadays Gigabit speeds 
are still largely confined to some universities, university hospitals and some enterprises.  

2.  
High  performance  5G  connectivity:  by  2020  a  fully-fledged  commercial  service 
in at least one major city in each of the 28 Member States and by 2025 uninterrupted 5G 
coverage of all urban areas and major terrestrial transport paths. The deployment of 5G is 
expected  to  generate  € 213 billion  revenues  worldwide  in  2025  and  could  lead  to 
€ 113 billion  in  benefits  per  year  across  four  industrial  sectors  (automotive,  health, 
transport  and  energy).  The  success  of  the  commercial  deployment  of  5G  will  depend 
critically on the timeliness and intensity of investments in two key areas: (1) investments 
in  infrastructure,  mainly  to  lay  out  a  dense  fibre  network  infrastructure  to  ensure  the 
backhauling  of  5G  cells,  as  well  as  to  finance  the  installation  of  the  actual  5G  cell 
equipment  and  (2)  investments  in  service  innovation  to  stimulate  the  emergence  of  the 
new 5G-enabled services.  

3.  
All European households, rural or urban, to have access to Internet connectivity 
offering  download  speed  of  at  least  100  Mbps,  upgradable  to  Gigabit  speeds.  The 
ultimate success of innovative digital services depends on the access of all Europeans to 
high  speed  connectivity.  In  January  2017,  less  than  76 %  of  European  households  had 
access to connections above 30 Mbps; in rural areas, that percentage goes down to less 
than 40 %. Domestic demand is expected to grow exponentially with the launch of digital 
services.  For  instance,  while  North  America  is  the  world's  most  advanced  smart  home 
market,  with  almost  22  million  smart  homes,  the  European  market  only  counted  8.5 
million homes at the end of 2016 and is expected to grow at a compound annual rate of 
57 % in the next five years, reaching 80.6 million smart homes by 2021.  

121  
122  

123  

COM(2016) 587 final 
Survey of schools: ICT in Education - see 
http://ec.europa.eu/information_society/newsroom/cf/dae/document.cfm?doc_id=1800  
European Hospital Survey – Benchmarking Deployment of eHealth Services – see 
https://ec.europa.eu/digital-single-market/en/news/european-hospital-survey-benchmarking-deployment-
ehealth-services-2012-2013  

84 

 
 
 
 
 
 
                                                            
Important synergies can be achieved between the deployment of 5G and of other (mostly 
fixed)  connectivity  networks.  A  dense  5G  network  reaching  all  urban  areas  and  major 
transport  paths  -  based  on  backhaul  fibre  to  the  5G  cells  -  will  also  benefit  the 
deployment of wider networks for connectivity of both households and socio-economic 
drivers located in the area, e.g. by bringing the fibre network closer to homes as domestic 
needs  and  demand  evolve.  Connecting  anchor  customers  lowers  the  costs  of  covering 
households in the respective areas.  

II. ASSESSMENT OF THE INVESTMENT NEEDS  

The combined investment needed to meet the three connectivity objectives by 2025 and 
to  bring  major  benefits  across  sectors  and  across  borders  has  been  estimated  at  € 500 
billion.  To  meet  this,  an  additional  €  155  billion  is  required  over  and  above  a  simple 
continuation of the trend of current network investment and modernisation efforts of the 
connectivity providers124.The improved regulatory environment that inter alia the future 
Electronic  Communications  Code  will  bring  about  and  the  savings  from  increased 
synergies  across  sectors  will  reduce  this  amount.  However,,  a  significant  infrastructure 
investment  gap  to  reach  the  EU's  objectives  is  expected  to  persist  after  2020,  spread 
throughout  the  entire  territory  of  the  EU  and  mostly  affecting  its  rural  areas.  The  EU 
budget should support Member States' own efforts, to unlock, maximise and complement 
private investments in digital networks in order to reach EU's connectivity objectives.  

Based on the current trends, taking into account the existing public support for network 
investment  (national  broadband  plans)  as  well  as  the  expected  positive  effects  of  the 
regulatory  changes,  we  estimate  that  50-70  million  households  in  various  areas  –  both 
sub-urban  and  rural  areas  across  the  EU  –  will  have  no  access  to  very  high  capacity 
connectivity  in  2020.  Unless  the  EU  supports  Member  States  and  acts  as  a  catalyst  for 
more  commercial  deployments  and  connects  areas  showing  lower  population  density, 
remoteness, or less developed demand, the broadband targets will not be met. Many areas 
will not see the deployment of 5G or other Gigabit-ready networks in the next decade and 
will  miss  out  on  economic  growth  and  jobs.  While  5G  networks  are  believed  to  bring 
significant  growth  and  gains  across  sectors  and  services,  their  deployment  is  currently 
associated with many risks and the scenarios regarding the participation of / agreement 
among the various industries remain highly uncertain. It is important to note that gaps in 
coverage – be them gaps in coverage of communities, of business/industrial areas, or o 
transport paths – represent missed opportunities, unexploited potential and bottlenecks in 
the completion of the Digital Singe Market, as discussed further below under sections IV 
and V. 

The next map below shows the estimated investment gap, limited to household coverage, 
account  taken  of  already  planned  national  and  EFSI  funding  (up  to  2020)  and  after 
expected market investments projected until 2025. The map differentiates areas where:  

 

in yellow, the market is expected to cover most of the identified investment gap 
until  2025  and/or  sufficient  public  funding  is  currently  available  to  address  the 
remaining (rural) market failure; and 

124  

Commission Communication "Connectivity for a Competitive Digital Single Market - Towards a European 
Gigabit Society" (COM(2016) 587; 14.09.2016). 

85 

 
 
 
 
 
 
                                                            
 

in red, areas where continued public intervention will be required in order to meet 
the Gigabit Society strategic objectives. 

Note that the map is based on NUT3 level statistics and that many smaller size areas of 
market failure can be encountered within the regions identified in yellow.  

The  overall  investment  gap  across  the  red  areas  is  about  EUR  70  billion.  Within  these 
areas, it is estimated that the majority of households that will remain uncovered will be 
rural households, representing an estimated investment gap for rural households of about 
EUR  52,5  billion.  To  meet  the  Gigabit  Society  targets,  it  is  evident  that  public 
intervention is required to, on the one hand maximise the footprint of market investment 
in areas bordering commercial viability and on the other hand ensure the availability of 
funds for publicly driven deployments. 

Map 1: Estimated NUTS3 regions needing public support post 2020 

86 

 
 
 
 
 
 
III. ANALYSIS OF PREDECESSOR PROGRAMMES 

The  current  public  interventions in  support  of  broadband  networks  include:  (i)  national 
Broadband  Plans  amounting  currently  to  € 13.5  billion125,  (ii)  a  € 6 billion  envelope 
dedicated  to  broadband  under  ESIF  (reaching  an  estimated  € 10  billion  together  with 
national  co-funding),  (iii)  EFSI  support  (€ 2.3 billion  until  now)  and  (iv)  smaller  but 
innovative interventions under CEF (WiFi4EU, CEBF) for around € 240 million. 

European Structural and Investment Funds (ESIF) on broadband have been concentrated 
in a few countries (Poland, Italy, France, the Czech Republic and Spain account for over 
half  of  the  planned  ERDF/EARDF  investments)126,  supporting  mainly  public  driven 
deployments through grants in market failure areas. Where there is no business case for 
private  operators  ("white  areas"  according  to  state  aid  rules),  so  far  progress  has  been 
slow  in  closing  digital  and  territorial  divides  as  the  areas  addressed  are  not  always  the 
ones most in need and the focus has often been on less performant technologies. In many 
Member  States,  the  ERDF  investments  focused  primarily  on  productive  sites  in 
urban/semi-urban areas while EARFD managing authorities also prefer to invest on other 
rural  development  projects  than  broadband  rollout127,  so  the  most  peripheral  and  rural 
areas  will  therefore  likely  not  even meet  the  current  Digital  Agenda  for  Europe  (DAE) 
targets by the end of the current programming period.  

At  the  other  end  of  the  spectrum,  European  Fund  for  Strategic  Investments  (EFSI) 
interventions  along  with  European  Investment  Bank  lending  operations  are  improving 
credit conditions and providing support to commercially driven, larger scale deployments 
for  which  there  is  a  medium-term  business  case.  Up  to  now,  projects  for  above  € 2.3 
billion have been approved by the EIB, mostly undertaken by well-established operators. 

With  the  very  small  envelope  dedicated  to  broadband,  the  current  Connecting  Europe 
Facility  (CEF)  is  putting  in  place  two  innovative  interventions,  complemented  by 
technical  assistance  actions.  Firstly,  the  CEF-  and  EFSI-funded  Connecting  Europe 
Broadband  Fund  (CEBF)  seeks  to  address  a  demand  for  equity/long-term  finance  for 
smaller-scale and riskier commercially driven projects. This type of demand is currently 
unmet by either the market or existing EC instruments. The CEBF will allow funding to 
reach projects that would otherwise not meet current investment criteria and to address a 
clearly  identified  gap  in  the  finance  market,  an  opportunity  estimated  by  the  EIB's 
consultants at €33 billion128. The set-up of the fund has confirmed that, while there is a 
persistent need for supporting the provision of equity (in particular for smaller operators 
and smaller projects), it remains difficult to impose coverage obligations with this type of 
instrument  (for  instance,  to  impose  that  project  promoters  include  non-profitable 
locations within the project deployment area). 

125  

126  

127  

128  

Based on a study of the National Broadband Programmes, we estimate that currently €13.5 billion is 
dedicated to broadband rollout via purely national schemes – see https://ec.europa.eu/digital-single-
market/en/news/study-national-broadband-plans-eu-28-connectivity-targets-and-measures  
Source: ICT Monitoring Tool: http://s3platform.jrc.ec.europa.eu/ict-monitoring/-
/tool/search?code=7a3841fa59e74e34a67be9189f4f874b   
As illustrated in the 2010 European Economic Recovery Package (EERP), only about a third of the resources 
available were eventually programmed on broadband (Ares(2013)107783 - 29/01/2013). 
Market study conducted for the EIB to assess the market potential for the CEBF: Assessment of potential for 
a broadband infrastructure fund, May 2016. 

87 

 
 
 
 
 
                                                            
Secondly, the WiFi4EU initiative is a demand-stimulating measure that aims to provide 
free access to high-speed wireless connectivity in public spaces, thus promoting the take-
up  of  broadband  by  local  authorities  and  facilitating  the  access  of  citizens  to  digital 
services. This initiative is based on an innovative approach to direct management through 
simple online tools of small-value grants, providing standardised support in the form of a 
voucher scheme. The experience of launching the program has shown the great interest 
generated  at  local  level  by  the  initiative,  and  the  roaming  functionality  that  will  be 
available in the future will further enhance the EU level effect anticipated.  

The overview above illustrates that certain type of projects and interventions have been 
clearly  absent  in  the  current  multi-annual  financial  programme.  For  example,  cross-
border  links  have  clearly  been  totally  absent  under  the  existing  intra-EU  schemes, 
including ESIF investments since it was decided that INTERREG 2014-2020 would not 
invest  in  digital  networks  and  since  most  other  Operational  Programmes  are  based  on 
(Member  States')  national 
cross-border 
infrastructure  projects  are  important  in  the  context  of  the  Digital  Single  Market,  e.g. 
providing  seamless  connectivity  along  transport  routes  that  cross  national  territories. 
Cross-border international connectivity networks (e.g. submarine cables, interconnectors) 
and associated servers form a key backbone for today's connectivity. These core digital 
networks  increase  capacity  and  ensure  vital  redundancy,  and  thus  improve  investment 
prospects  for  entire  sub-regions  of  the  European  continent  and  islands  to  be  more 
attractive for the world's data centres.  

core-to-periphery  models.  However, 

Border  areas  and  international  connectivity  are  however  not  the  only  areas/types  of 
intervention  which  remain  uncovered  by  the  current  programmes:  several  gaps  in 
connectivity  –  "pockets"  of  small  but  not  insignificant  size  -  persist  in  otherwise  well-
developed  regions  throughout  the  EU.  Covering  relatively  small  areas  in  an  otherwise 
covered  territory  is  extremely  uneconomic  and  therefore  not  done  by  private  investors. 
Covering such areas is also not among the objectives of any of the current programmes. 
On  the  other  hand,  such  gaps  represent  significant  unexploited  potential  on  the  Digital 
Single Market, and handicaps for socio-economic drivers in these areas.  

IV. POLICY OPTIONS  

Continuing the status quo would amount to seeing the EU efforts for the deployment of 
broadband  continue,  yet  far  below  what  is  required  to  meet  the  EU  Gigabit  Society 
strategic  objectives.  De  facto,  this  scenario  entails  broadening  the  digital  divide  and 
leaving  a  majority  of  rural  households  uncovered,  as  well  as  putting  at  risking  the 
achievement  of  the  second  Gigabit  Society  target  concerning  the  deployment  of  5G. 
While a broader geographic deployment of broadband networks may contribute to some 
extent to the availability of high capacity networks that form the underlying prerequisite 
(fixed  backhaul)  for  5G  deployment,  it  would  not  permit  the  deployment  of  5G  along 
major EU transport corridors, nor the deployment of a dense network of 5G cells to cover 
all urban areas. In addition, international connectivity and other cross-border deployment 
would not be addressed.  

Should these investments not be prioritised within the envelope foreseen in this scenario, 
the  investment  gap  in  rural  areas  would  be  significantly  higher.  This  would  also  imply 
that socio-economic drivers would not be sufficiently supported in particular, making the 
investment  in  disadvantaged  areas,  of  which  many  are  rural  areas,  more  difficult.  The 

88 

 
 
 
 
 
challenge  of  reaching  the  Gigabit  Society  strategic  objectives  and  of  delivering  the 
underlying  connectivity  for  a  functional  Digital  Single  Market  is  therefore  not  only 
quantitative: the nature of the current public interventions supporting broadband rollout 
leave several areas and types of projects uncovered, across the whole EU territory. 

Given  the  importance  of  investments  in  very  high  capacity  networks,  size  of  the 
investment gap and based on the profiles and strengths of the current programmes, it is 
necessary  for  rollouts  to  be  supported  via  a  set  of  well-targeted,  efficient  and 
complementary interventions beyond 2020. Based on the experience gained in the current 
MFF,  a  mix  of  instruments  using  grants,  financial  instruments  (including  budgetary 
guarantees  and  thematic  instruments)  and  blending  between  these  various  forms  of 
assistance  will  maximise  the  impact  of  EU  support  in  the  next  Multi-annual  Financial 
Framework.  
In  this  context,  the  intervention  via  the  Connecting  Europe  Facility  must  be 
complementary  to  other  sources  of  funding  for  the  deployment  of  very  high  capacity 
networks,  in  particular  ESIF and  InvestEU.  It  is  also  necessary  to  address  the  scope  of 
CEF Digital in view of the new Digital Europe Programme. The resulting scope of CEF 
Digital  has  been  a  re-focus  on  the  core  business  of  CEF,  namely  support  of  digital 
connectivity infrastructure, whereas digital services will be supported through the Digital 
Europe Programme. Moreover, CEF Digital will now strongly focus on strategic projects 
aligned with the EU strategic connectivity objectives, considered essential to the success 
of the Digital Single Market. 

As  regards  the  cross-border  focus,  the  particularity  of  Internet  networks  is  that,  even 
when deployed locally, they have global effects, due to the structure of the network and 
scale effects of the applications and services running over the Internet. In that sense, all 
digital connectivity networks, which are connected to the Internet, are intrinsically cross-
border.  For this  reason, all  deployments into  very  high  capacity  networks in  the digital 
area,  which  are  able  to  support  EU's  digital  transformation,  are  considered  projects  of 
common interest in the sense of trans-European digital networks. In view of the limited 
resources  available,  priority  for  support  via  the  Connecting  Europe  Facility  should  be 
given to projects with the highest expected impact on the Digital Single Market, inter alia 
through 
the  Gigabit  Society  Strategy 
the  objectives  of 
Communication  or  through  their  strong  cross-sector  and/or  cross-border  characteristics, 
and for which market failures have been observed. The proposed areas of intervention for 
CEF Digital are presented in detail below.  

their  alignment  with 

V. NEW SCOPE OF INTERVENTION UNDER CEF DIGITAL  

In view of the above, the scope of CEF Digital has been adjusted with a view to: 

- 

-  continue  supporting  measures  which  enhance  connectivity  for  citizens,  such  as 
the  WiFi4EU  initiative,  a  voucher  scheme  for  providing  local  wireless 
connectivity to citizens and visitors;  
focus its new scope on digital connectivity infrastructure projects contributing to 
the achievement of the strategic objectives set out in the 2016 Communication for 
a  Gigabit  Society,  by  scaling  up  support  for  coverage  of  territories  and 
households  with  very  high  capacity  networks,  by  providing  support  to  Gigabit 
connectivity to socio-economic drivers as well as grant-based schemes to deploy 
5G corridors and backbone networks; and to 

89 

 
 
 
 
-  enhance synergies within the programme and by contributing to the digitisation of 

transport and energy networks.  

In particular, CEF should provide support for the following actions:  

1. Gigabit connectivity for socio-economic drivers  

Schools, universities, libraries, local, regional or national administrations, main providers 
of  public  services,  hospitals  and  medical  centres,  transport  hubs  and  digitally  intensive 
enterprises,  etc.  are  entities  and  places  that  can  drive  important  socio-economic 
developments in the area where they are located. Such socio-economic drivers need to be 
at the cutting edge of Gigabit connectivity and to provide access to the best services and 
applications for European citizens, business and local communities in order to maximise 
the positive spill-over effects on the wider economy and society, including by generating 
wider demand for such connectivity and services.  

This  type  of  intervention  will  directly  support  important  digitisation  efforts  uand  also 
(through  the  infrastructures  funded)  improve  the  business  case  for  wider  network 
deployments  in  the  respective  areas.  It  will  also  stimulate  future  demand  for  Gigabit 
connectivity by exposing whole communities to the benefits of advanced digital services. 
This  grant-based  scheme,  taking  the  form  of  simplified  forms  of  grants  (i.e.  vouchers) 
would complement ESIF intervention and a few existing national schemes. 

As an example, Europe has achieved important progress as regards eHealth services and 
their interoperability. These eHealth services are expected to improve quality of services 
and realise important savings. For instance, large net savings in elderly/home  care have 
been estimated in Sweden resulting from a more extensive introduction of digital health 
services (e.g. net savings of about EUR 60 million per large city with 500.000 residents 
by 2020). The successful deployment of many new digital applications and services will 
however depend on the availability of 5G/Gigabit connectivity for hospitals and smaller 
medical centres, as well as the connectivity of patients (i.e. households).  

2. Wireless connectivity for local communities  

Building on the experience and significant success of the WiFi4EU initiative so far, very 
high quality local wireless connectivity should be provided free of charge in the centres 
of local public life, including entities with a public mission such as public authorities and 
providers of public services as well as outdoor spaces accessible to the general public, in 
order  to  support  EU's  digital  vision.  As  in  the  current  period,  the  scheme  should  be 
implemented  without  interfering  with  the  commercial  deployments  and  offers  and  by 
using simplified forms of grants (i.e. vouchers).  

3. Support for the deployment of 5G corridors  

In the context of the 5G Action Plan129, the Commission is working on the definition of 
a network of 5G corridors together with the Member States, to ensure uninterrupted 5G 
coverage  for  Connected  and  Automated  Driving  /  Mobility.  The  investment  in  such 
major  terrestrial  transport  paths  is  a  prerequisite  to  achieve  the  key  benefits  of  5G 

129  

Communication of the Commission : "5G for Europe: an Action Plan"; COM(2016) 588 of 14.09.2016. 

90 

 
 
 
 
 
 
 
 
 
 
                                                            
technologies and ensure a scalable rollout across sectors and across borders. Once such a 
major enabling infrastructure is deployed, for which market investment is not foreseeable 
on  an  optimal  timeline  or  scale  because  of  the  many  beneficial  externalities,  major 
impacts are expected in several areas including mobility, health and public connectivity. 
This  grant-based  scheme  would  help  funding  deployments  complementing  any  private 
initiative. 

4. Backbone and international connectivity projects  

Today  only  4%  of  the  world's  data  is  stored  in  the  EU  and  the  EU  has  only  14%  of 
revenues in the cloud service providers market.130 To make the EU more attractive for 
the  world's  data  centres,  the  underlying  connectivity  needs  to  be  ensured.  Several 
Member States have recognised the importance of connectivity as a 'digital harbour' for 
'digital goods' as a key enabler for the digital economy. For example in France Marseille 
is  a  key  hub  for  international  connectivity;  after  the  completion  of  the  new  submarine 
cable between Germany and Finland (providing more bandwidth and improved latency) 
the Finnish government is now actively pursuing an extension to Japan and China via the 
Arctic  route;  similarly  Malta  is  today  only  linked  to  Sicily  and  is  concerned  about  the 
reliability and resilience of this link and prices that are significantly higher compared to 
others.  In  addition,  to  further  international  bandwidth  for  research131  the  EU  has 
supported  the  establishment  of  Ella  Link,  linking  Brazil  with  the  EU  and  offering  a 
competitive  alternative  to  the  US  submarine  cables  that  currently  channel  most  traffic 
between the continents. 

The  deployment  of  backbone  electronic  communications  networks,  including  with 
submarine cables connecting European territories to third countries on other continents or 
connecting European islands or overseas territories to the mainland, are needed in order 
to  build  redundancy,  and  increase  the  capacity  and  resilience  of  EU's  digital  networks. 
However, such projects are often commercially non-viable.  

5. Targeted support for household and territories coverage  

All  European  households,  rural  or  urban,  should  have  access  to  adequate  fixed  or 
wireless connectivity. In view of ensuring coherence with other funding programmes and 
taking into account the new forms of interventions foreseen (grants instead of financial 
instruments),  CEF  should  focus  on  those  local  deployments  which  contribute  to  this 
objective, for which market failures are observed, but which can be deployed using low 
intensity grants, alone or in combination with financial instruments.  

As  explained  above,  financial  instruments  only  work  within  certain  territories,  in 
particular  in  urban  and  sub-urban  territories,  or  in  wealthier  areas  where  there  is  a 
commercial case for deployment, even if the investment is riskier than market standard 

130  

Commission staff working document on the free flow of data and emerging issues of the European data 
economy, January 2017, see: http://ec.europa.eu/newsroom/dae/document.cfm?doc_id=41247  

131 International connectivity investments allow the scientific community to fully exploit research data produced by 

big-data factories and HPCs. Existing communication networks will have to be upgraded (e.g. the link 
Bologna – Trento – Innsbruck to enable for transfer of Copernicus data, or the Nordic network to exploit new 
Artic links) and new networks will have to be laid down (e.g. between Italy and the Balkans, to improve 
connectivity with that region). If properly funded, the pull effect created by the scientific demand for 
increased network capacity will improve the bankability of international connectivity projects. 

91 

 
 
 
 
 
 
 
                                                            
ones. Financial instruments can improve the business case, but cannot create one. On the 
other  hand,  ESIF  often  focuses  on  deployments  which  are  purely  public  driven,  and 
where high-intensity grants are necessary, typically covering more rural and poorer semi-
urban  territories.  In  between  these  extremes,  there  are  several  areas  throughout  the  EU 
which,  as  discussed  above,  risk  to  remain  uncovered  in  the  absence  of  public 
intervention,  and  which  represent  significant  unexploited  potential  and  bottlenecks  for 
the Digital Single Market.  

In view of an efficient and effective intervention, CEF seek to focus on these "middle" 
areas,  and  to  cover  them  comprehensively  via  low  intensity  grants,  including  via 
blending.  Such  intervention  would  bring  the  principles  and  efficiency  of  financial 
instruments  to  poorer  and  more  rural  areas,  including  in  poorer  Member  States,  where 
risk  capital  alone  would  typically  not  go.  Moreover,  providing  a  grant  allows  also 
imposing  conditionalities,  in  terms  of  which  households  and  which  socio-economic 
drivers are to be covered in a certain area. The intervention will be done in full respect of 
state  aid  principles,  in  particular  by  taking  into  account  existing  and  planned  private 
investments.  

6. Contributing to the digitisation of transport and energy networks  

Significant positive impacts, for the sectors, and for the economy and society as a whole, 
are expected from the digitalisation of energy and transport networks. The funding of 5G 
corridors  are  one  example  of  synergy  action,  expected  to  be  followed  by  many  others. 
One of the objectives of CEF Digital is to contribute indeed the digitalisation of transport 
and energy networks. 

VII. COMPLEMENTARITY WITH OTHER PROGRAMMES 

In the new MFF, the intervention under CEF described above will be complementary in 
particular with:  

 

InvestEU will intervene to support economically viable projects, which present a 
potential  capacity  to  generate  revenues,  via  budgetary  guarantees,  in  order  to 
overcome issues of access to finance, to support an increased risk taken by private 
investors  and  to  support  the  rapid  deployment  of  the  newest  technologies 
throughout Europe;  

  ESIF is expected to ensure the rollout of digital networks in view of covering all 
territories  throughout  the  EU,  including  rural,  isolated,  and  sparsely  populated 
areas,  focusing  on  areas  where  more  severe  market  failures  are  observed  and 
where  higher  intensity  grants  are  required  to  render  the  network  deployment 
viable.  ESIF  intervention  can  be  complemented  by  high  speed  connectivity 
vouchers  to  specific  demand  drivers  and  anchor  customers,  e.g.  eHealth 
practitioners, schools, local administrations, etc. located in these areas, which can 
be implemented through a simplified direct management approach;  

  Digital Europe Programme will fund digital services, while CEF refocuses on the 

underlying digital infrastructure.  

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