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# 52012DC0216

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the European Innovation Partnership on Water /\* COM/2012/0216 final \*/**

  

COMMUNICATION FROM THE COMMISSION TO
THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

on the European Innovation Partnership on
Water

1. Introduction

Floods, water scarcity and droughts have
enormous environmental, social and economic impacts. Insufficient water quality
levels pose threats for public health and bio-diversity and the supply of safe
drinking water and sanitation still poses problems, both within Europe and
outside. To sustainably manage the increasing pressures on water resources, new
and innovative approaches are needed.

The European Innovation Partnerships (EIPs)
as proposed in the Europe 2020 Flagship Initiative "Innovation Union"[1] provides for a strategic
approach and framework to address the weaknesses in the European research and
innovation system to speed up innovations that make a significant contribution
to solving societal challenges. In doing so, Europe's competitiveness should be
enhanced, contributing to job creation and economic growth. EIPs are a means to
pool expertise and resources on key political priorities by mobilising and
linking up all relevant stakeholders across policies, sectors and borders to
bring the benefits of breakthroughs and innovation to people more quickly.

The importance of innovation in the field
of water management is recognized by the EU Member States. On June 21st
2011, the Council of the European Union invited the Commission to 'investigate
an innovation partnership on water in close cooperation with the Member States,
with a view to achieving sustainable and efficient use of water'[2].

The importance for Europe to engage in the
sustainable management of water as a key resource is underlined in the Europe
2020 Resource efficient Europe[3]
flagship initiative. The Roadmap to a resource efficient Europe[4] highlights the efficiency gains
that can be made.

A Blueprint to safeguard Europe's waters, the water milestone on the
Resource efficiency Roadmap, is being developed by the Commission. The Blueprint
will present, by the end of 2012, the policy response to the challenges of the
implementation issues and gaps related to the current framework of EU water
resource management policy. The Blueprint and the EIP
will be developed in close coordination to ensure integration of innovative
approaches and innovation demand side measures in developing and realizing EU water
resource management policy. Furthermore, the EIP will build on the
Eco-Innovation Action Plan[5],
which focuses on boosting innovation that results in or
aims at reducing pressures on the environment and on bridging the gap between
innovation and the market.

2. Seizing
the innovation opportunities

Citizens,
societies, agriculture and industries will increasingly need innovative
solutions to meet the need of using water in a more efficient and effective
way. Innovative thinking and smarter use of innovation have the potential to
bring new solutions quickly and efficiently to the market while responding to
the needs of end users in urban, rural and industrial areas.

Unlocking the
innovation potential in the field of water management can significantly
contribute to job creation, economic growth and competitiveness in Europe. A 1%
increase of the rate of growth of the water industry in Europe may mean between
10,000 and 20,000 new jobs[6]. By seizing new and significant market opportunities, Europe can increasingly
position itself as a global market leader in water related innovation and
technology.

There is significant potential for boosting
the competitiveness and growth of the European water sector, which includes
9000 active SMEs and provides 600,000 direct jobs in water utilities alone6. This potential also exists for other water
related sectors (water using industries, water technology development etc.)
where innovation can create higher operational efficiencies. There is a rapidly growing world water market which is estimated to
be as large as $ 1 trillion by 2020[7].

The European water related sectors already operate
world-wide in developing innovative water solutions, but often do not capture
the benefits of marketing these. Eliminating the obstacles for market
breakthroughs and promoting Europe's comparative advantages in the innovation
value chain will facilitate European companies to bring solutions to the market,
thereby realizing their full economic potential.

Innovative solutions to water related
challenges can directly support wider environmental objectives such as
protecting our natural capital and ecosystems, and the biodiversity that
supports these. In addition, solutions with regard to drinking water and waste
water treatment are to the benefit of public health, which in turn will
generate significant savings. Furthermore, solutions to improve protection of,
and in, flood-prone areas will enhance public safety and prevent potential
economic losses.

3. The societal challenges

Without an effective policy to stimulate
innovation, Europe risks being unable to realise its potential on global markets
in water related innovation and hence may have to unnecessarily acquire
technology from elsewhere to deal with its water challenges.[8]

Recent studies
show that competing demands for scarce water resources may lead to an estimated
40% global water supply shortage by 2030[9],
also affecting large parts of Europe. Competition for clean water is expected
to increasingly lead to social, economic, environmental and global geo-political
consequences.

Challenges with regard to water quality and
quantity are significant. A substantial proportion of Europe’s freshwaters are
at risk of not achieving the objectives of the EU Water Framework Directive by
2015. According to the preliminary analysis in 2009, 30% of surface waters and
38% of ground waters are at risk of not achieving good status[10]. This has adverse effects on bio-diversity and pubic health and
hampers the provision of eco-system services.

Regarding water quantity, water scarcity
and droughts already affect one third of the EU territory across different latitudes.
A comparison of the impacts of droughts in the EU between 1976-1990 and
1991-2006 shows a doubling in both area and population affected.[11]
In addition, over the past ten years, Europe suffered more than 175 major
floods, causing deaths, the displacement of people and large economic losses11.

These challenges are projected to increase
due to climate change, socio economic developments and increasing
water demand in agriculture to produce food and biomass. Urbanization and rapid industrialization, combined with demographic developments
have accelerated water problems, with ageing water infrastructure posing
further challenges. In addition, water-energy efficiency
gains and interactions will be increasingly important in the sustainable
management of water.

With regard to developing countries, achieving
the Millennium Development Goals in relation to sanitation and drinking water is instrumental to fight
poverty and promote the economic development of millions.

4. The EU response

Protecting water resources and promoting
sustainable economic growth are interlinked and call for an integrated
approach. The EIP will facilitate the search for innovative solutions in
support of an effective EU water policy as well as unlocking business and industry
potential to innovate and gain competitive advantage. In addition to new
approaches to research and technological development also new approaches to
finance, ICT, governance, physical planning, institutions, management and other
disciplines or the interaction between them will be needed.

4.1 EU Added Value

Knowledge and technology in the European water
sector are excellent but scattered. The EIP can create a critical mass by
pooling resources across sectors and borders and promote competition and level
playing field conditions. Action at European level can facilitate coordination
of efforts, prevention of duplication, definition of common objectives, scale-up
initiatives and speed up the delivery of innovative solutions. The EIP will
make best use of existing resources and recommend actions for which additional
support is required. Moreover, an EU approach will provide the necessary economies
of scale, to develop, implement, and foster the dissemination of innovative
solutions.

Water is not confined to administrative
borders. The transboundary characteristics of water management require a
holistic and integrated European approach applied at the river basin level, as
reflected in European water policy. Regional and international coordination is
instrumental to achieve this.

Demand side
measures (procurement, regulatory frameworks, standard setting, etc.) are of
crucial importance to the deployment and uptake of water related innovations,
and should be identified by the EIP. European regulation is a major driver for
innovation and business. The EIP can facilitate innovative solutions to be
adequately translated into policy developments and implementation. The
procurement of water related infrastructure by public authorities and utilities
has the potential to be a key driver for the development and uptake of
innovative solutions. Other regulatory frameworks, such as the Eco-design
directive, could be considered relevant for improving the market uptake of
innovative designs which support policy objectives. Relevant standards may need
to be developed or updated.

EU instruments focusing on the innovation
supply side, e.g. research and development funding, need to be adequately linked
to demand side actions, measures and policies which are needed to foster
innovations. The EIP will combine a strong research and innovation dimension
with demand side measures across political areas to shorten time to market with
innovation support actions at EU and national level (i.e. reviewing regulations
and proposing new rules, accelerating product approvals, fast-tracking standard
settings, deploying public procurement strategies, etc.). Finally, the EIP will
create cross border opportunities for industries, in particular SMEs, to find
partners in developing innovative solutions throughout the entire EU.

4.2 Objectives and targets

In line with the challenges and
opportunities set out above, and in view of the relevance of European level
action, the EIP on Water should contribute to achieving the overall
objectives of EU water policy as defined by the Water Framework Directive and
the Resource Efficiency Roadmap and to overcome implementation
difficulties. More precisely, the strategic objectives of the EIP are by
2020:

·
To provide safe, available and affordable
water for all, while ensuring sufficient water for the environment.

·
To achieve the relative decoupling
of the depletion of water resources from the level of economic activity in key
EU sectors (including energy, farming and chemicals).

·
To maintain and enhance the
good status of waters in all EU river basins – in terms of quality,
quantity and use, and in the context of increasing pressures on water
resources.

In order to measure progress towards these
strategic objectives and create an incentive for stakeholders to actively
engage, targets are developed. They reflect the different areas of action
embedded in the strategic objective and the EIP itself. The targets will be
further elaborated in the Strategic Implementation Plan to be developed during
autumn 2012 and will be closely inter-related with the Blueprint for Europe's
waters planned for November 2012.

Under these conditions the EIP
will aim at the following targets for 2020:

·
All River
Basin Management Plans implemented on time in 2015. As pressure on water
continues to develop, the objectives continue to be met with the impacts of
droughts and floods minimised, adapted crops, increased water retention in
soils and efficient irrigation. Alternative water supply options are only
relied upon when no cheaper savings opportunities exist.

·
Water losses
are reduced to sustainable levels across the EU, through innovation
focusing on the regions where such losses are the most acute problem

·
Water
abstraction is below 20% of available renewable water resources in all
regions.

This should lead to the following
innovation and competitiveness benefits:

·
The time to
market of water-related innovations in Europe is shorter than in economies at a
similar level of development. Europe is the global market leader in innovative
solutions that effectively deal with water-related challenges.

·
EU water
management related eco-industries have increased their
EU turn-over by 20% and their employment opportunities by 20% by 2030[12].

·
Sustainable water management practices are brought
to the global market and are integrated into EU and Member States'
water-related cooperation with neighbouring and developing countries.

The EIP itself will have the following
operational targets:

·
By the end of
2012 to agree on a Strategic Implementation Plan.

·
By 2013 to
effectively function as a platform for public and private stakeholders to
cooperate efficiently on developing innovative solutions for water related
challenges.

·
By 2013 to
establish a web-based Market Place for water innovations, which allows supply
and demand side actors across the EU to co-operate.

·
By 2015 to
show first results of actions to remove major barriers to innovation at the EU,
Member State and regional levels to ensure that legislation and financial
instruments support innovations.

·
By 2020 to show
tested solutions for 10 major water related challenges that have been
successfully disseminated and scaled up.

5. Focus areas for innovation

In order to optimize the activities in
addressing barriers to innovation, developing marketable solutions and
designing dissemination strategies, three Work Packages are proposed:
Urban Water Management, Rural Water Management and Industrial Water Management.
Extensive consultations have provided broad support for this approach from
stakeholders. The use of work packages is pragmatic to organize the output activities
of the EIP through a coherent group of stakeholders which deal with relatively
similar challenges. The following indicative description serves as a basis for
the development of the work packages.

·
Urban water management

Urban water management is under increasing
pressure as a result of further urbanization (over 80% of the population is
expected to be living in urban areas in EU countries in 2050[13]). There is a need for an
integrated approach with the urban water cycle at the core, involving all
stakeholders that have an impact on, or have to deal with, water challenges. This
includes professional stakeholders, as well as citizens and local governments
to guarantee acceptance and uptake of innovations. Innovative solutions
focussing on the relationship between water and energy, water efficiency
(domestic and industrial), water quality, water infrastructure, recreation,
public health and ICT-enabled user awareness will be of key importance. Work will be coordinated with the European
Commission's 'Smart Cities and Communities Initiative' in the fields of energy,
transport and ICT.

·
Rural water management

In the rural area, biodiversity,
agriculture, spatial planning and land use management influence each other and
may compete with each other with regard to the available water resources. In
addition, rural areas can play an important part in the prevention of floods
and mitigating the effects of water scarcity and droughts. The EIP on Water will address the interface
between water management at the farm level and the allocation of water
resources to agriculture at the catchment and water body level and the
permissible pressures on water quality. The EIP will coordinate with the EIP on
agricultural productivity and sustainability which will address water quality
and quantity issues at the farm level.

·
Industrial water management

Innovations in industrial processes, ICT
applications and new technologies for more efficient treatment will reduce costs
and energy needs and decrease pollution. In industries with high water use,
like energy production or the chemical industry, innovations to increase water efficiency
in production processes will have positive effects on decreasing the total
water footprint. The EIP on Water will focus on facilitating the possibility for industry and SME's
to disseminate these innovations. Complementarities will be investigated with
the EIP on Raw Materials.

A number of Transversal Themes will
be defined to deal with cross-cutting issues which are relevant for the
activities of two or all three work packages. They could include, for example,
river basin management, climate change and water, the energy and water nexus,
water governance, water related development cooperation, financial engineering
or standardization.

6. Implementation of the EIP

A Strategic Implementation Plan (SIP)
will form the foundation for the output of the EIP. Through a bottom-up
approach, the SIP will set out the priorities for actions within the work
packages and determine the transversal themes that should be addressed. The SIP
will take full account of the relevant EU funding programmes[14] and initiatives to optimise
the impact of funding and contribute to the EIP objectives. The SIP will also
scrutinize the targets of the EIP, taking into account the Blueprint to safeguard
Europe's waters.

6.1 Output

The implementation of the EIP will lead to
the following outputs:

·
Innovation Sites

A first set of Innovation Sites will be
launched by 2013 to identify barriers to innovation, develop, test and
demonstrate concrete activities, actions, prototypes and solutions in line with
the SIP, in relation to a particular water challenge. They can range from
physical demonstration sites to cooperation projects or development of networks.
The Innovation Sites will play a key role in the implementation of the EIP.

·
Dissemination of innovative solutions

The EIP will facilitate the development of strategies
to disseminate breakthroughs and innovative solutions for the major water
related challenges, accelerating their market uptake.

·
Addressing water innovation barriers

The development of solutions to bring
innovations successfully to the market and disseminate them is hampered by a
variety of barriers (regulatory, financial, standardization, technical, social,
etc.). The EIP will identify major barriers to innovation. The EIP will
undertake a mapping of the measures and actions needed to overcome the
bottlenecks and define opportunities for speeding-up breakthroughs and innovation
for every step of the value chain from research to market.

·
Water innovation 'Market Place'

A web-based Market Place will be developed
and established by 2013. The Market place will allow those who own the problems
and those who can provide the solutions to interact regardless of their
geographical location. The Market Place will be monitored through the
governance structure of the EIP and will be connected to the other areas of
output.

6.2 Funding

The EIP will identify how different funding
programmes at EU, national and regional level as well as private sources can
best interact in order to accelerate the development of innovative solutions,
for example through making use of the network of eco-innovation financiers,
established under the Eco-Innovation Action Plan. The EC will consider relevant
support for the activities under the EIP through the 7th Framework
Programme. Member States are encouraged to include relevant investments in the
future programmes under the Structural Funds 2014-2020.

7. Governance

The EIP will require the participation and
commitment of all relevant stakeholders representing the entire innovation
value chain.

The EIP will make use of and closely
coordinate with the activities and outcomes of existing European, national and
regional initiatives. These include the relevant Joint Programming Initiatives,
national and regional research and innovation programmes, European Technology
Platforms, financial mechanisms, other EIPs and other innovation initiatives,
in order to avoid duplication and promote synergies.

The governance model will allow for a
bottom up approach to prioritize areas in which innovation actions can and should
be pursued. At the same time, it will ensure the commitment at the highest
decision making level from all involved stakeholders.

Figure 1:
Visual presentation of the governance model

A High Level Steering Group (HLSG) will
be established, upon invitation by the European Commission. The HLSG will be
chaired by the Commissioner for the Environment and will be comprised of other
European Commissioners, Member State representatives, the European Parliament
and a wide variety of stakeholders. Members will be invited in their personal
capacity and will represent the entire innovation value chain. The HLSG will
set the mandate for the EIP and will adopt the SIP and a multi-annual roadmap
for 2012-2020. The role of the HLSG during the
implementation stage will be reviewed following the adoption of the SIP.

The HLSG will appoint a Task Force
which will mirror the composition of the HLSG, linking the operational and decision making levels. The Task Force will be
responsible for drafting the SIP, guaranteeing a bottom up approach. After the
adoption of the SIP, the configuration of the Task Force can be reviewed, with
the possibility of increasing the number of stakeholders to be represented during
the implementation phase while maintaining effective decision making capacity. During
the implementation phase of the EIP, the Task Force will be instrumental in
monitoring the progress of the activities based on the targets that have been
set. In addition, the Task Force will provide coordination and cross
fertilisation between the activities of the EIP and will support the
development of dissemination strategies.

Operational Networks will be
established for each work package, consisting of all the stakeholders relevant
to each work package and of the actors that participate in the Innovation
Sites. In order to ensure maximal exchange of knowledge and experiences and stimulate
the extension of the activities of the EIP, the networks will be open to other
water related innovation activities in Europe. The signature of a Declaration
of Commitment will be required for all members to the networks. The
networks will be responsible for coordination between the work packages,
liaising with the Innovation Sites and for facilitating the EIP output actions
(finding market opportunities, addressing the various barriers to innovation,
identifying funding opportunities and developing dissemination strategies). The
activities of the networks will be coordinated and supervised by the Task
Force.

An annual 'EIP on Water meeting'
will be organized, to allow for all actors to convene and discuss the output
actions of the EIP. At this meeting, the networks will gather to report on the
activities, monitor developments and assess progress of the Innovation Sites. After
the meeting of the work package networks, the transversal themes will come
together to discuss progress and areas where future action is required. After
these meetings, the Task Force will convene, where the networks and transversal
themes will report and receive strategic guidance. During these meetings, the
advancement towards the targets will be measured.

The European Commission will function as a
driver and facilitator of the process of the EIP. An EIP secretariat will
be established by the European Commission, which will support the Task Force in
the development of the SIP and support the implementation phase of the EIP.
After the adoption of the SIP, the European Commission will assess the Plan and
propose how it will contribute to the delivery of the objectives of the EIP.

8. Next steps

The European Commission envisages the
following milestones:

·
Consideration of the EIP Communication by the
European Parliament and the Council by May 2012.

·
Establishment of the HLSG and kick off meeting
before summer 2012.

·
Appointment of the Task Force and establishment
of the EIP secretariat by September 2012.

·
Development of the SIP by the Task Force before
December 2012.

·
Adoption of the SIP by the HLSG in December 2012.
The Commission will present this Plan to the European Parliament and Council
together with its response to the Plan.

·
From early 2013, start the implementation of the
EIP: e.g. selection of the 1st Innovation Sites, establishment of the work
package networks, implementation of demand side measures, development of the
web based market place etc

·
The European Commission will organize a review
of EIPs during 2013 to assess progress.

·
Regular reviews of progress in implementation and
against the targets.

[1]               Communication COM(2010) 546 final

[2]               Council of the European Union Conclusions of 21 June
2011. (doc. 11308/11)

[3]               Resource efficient Europe, COM(2011)21
final

[4]               Roadmap to a resource efficient Europe, COM(2011)
571 final

[5]               COM(2011) 899 final

[6]               Commission Staff Working Paper Research Joint
Programming Initiative on Water (doc. SEC(2011) 1250 final)

[7]               LUX Research report "Water Cultivation: The Path
to Profit in Meeting Water Needs", 2008

[8]               Global Water Intelligence, 2011. Global Water Market
2011 - Meeting the world's water and wastewater needs until 2016

[9]               McKinsey & Company, 2009. Charting our Water
Future: Economic frameworks to inform decision-making.

[10]             Note for Water Directors, 'Preliminary analysis of the
River Basin Management Plans in 2009'. Water Directors meeting, Warsaw, 8-9
December 2011.

[11]             European Environment Agency (EEA), 2010. Water
resources: quantity and flows - SOER 2010 thematic assessment.

[12]             Water related industries account for 33% of the global
market for eco-industries, estimated at EUR 1.15 trillion in turnover a year in
2010. Employment in water related industries account for 22% of the total
employment in eco-industries in Europe in 2010. Ecorys study on the number of
jobs dependent on the Environment and Resource Efficiency improvements
(February 2012).

[13]             Population Division of the Department of Economic and
Social Affairs of the United Nations Secretariat, World Population
Prospects: The 2006 Revision and World Urbanization Prospects: The 2007
Revision, http://esa.un.org/unup

[14]             Including through national and regional research
and innovation strategies of the future EU Cohesion policy

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