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# 52011SC1072

**COMMISSION STAFF WORKING PAPER Report on the first interim evaluation of the Innovative Medicine Initiative Joint UndertakingReport on the first interim evaluation of the Clean Sky Joint Technology Initiative Joint UndertakingReport on the first interim evaluation of the Fuel Cells and Hydrogen Joint Undertaking /\* SEC/2011/1072 final \*/**

  

COMMISSION STAFF WORKING PAPER

Report on the first interim evaluation of
the Innovative Medicine Initiative Joint Undertaking
Report on the first interim evaluation of the Clean Sky Joint Technology
Initiative Joint Undertaking
Report on the first interim evaluation of the Fuel Cells and Hydrogen Joint
Undertaking

Accompanying the document

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

Partnering in Research and
Innovation

Overall
introduction

Joint Technology Initiatives (JTIs) are a
major novelty of the Seventh Framework Programme. On the basis of Article 187
of the Treaty on the Functioning of the European Union, five JTIs have been set
up under 7th Framework Programme (FP7): Innovative Medicines
initiatives (IMI), Advanced Research and Technology for Embedded Intelligence
and Systems (ARTEMIS), Aaeronautics and Air Transport (Clean Sky), European
Nanoelectronics Initiative Advisory Council (ENIAC) and Fuel Cells and Hydrogen
(FCH).

In line with the request to the Commission
under Article 11.2 of the Council Regulations setting up the Joint Undertakings
to implement the Joint Technology Initiatives, independent interim evaluations
of the operation of the Joint Undertakings have recently been carried out.[1]

The Commission response to the interim
evaluations of the ARTEMIS and ENIAC Joint Undertakings has already been
presented in COM(2010) 752 of 16 December 2010[2].

This Staff Working Document presents the
detailed Commission response to the interim evaluations of the IMI, Clean Sky
and Fuel Cells and Hydrogen Joint Undertakings.

Report on the First interim evaluation of
the Innovative Medicine Initiative

1.
Introduction

This report highlights the findings and
recommendations of the first interim evaluation of the Innovative Medicines Initiative
(IMI) Joint Undertaking (JU). The IMI JU was created between the European
Commission and the European Federation of Pharmaceutical Industries and
Associations (EFPIA), the umbrella organisation of the European pharmaceutical
industry, to implement the Joint Technology Initiative in the area of
Innovative Medicines. This report formulates the Commission's initial response
to the evaluation's recommendations and sets out follow-up measures. The
Commission thereby complies with the requirement to report on the first interim
evaluation of the IMI JU, as laid down in the founding act.[3]

2.
Background

In the field of innovative medicines, IMI
was established in 2007 as a Joint Undertaking, based on Article 187 TFEU (ex
Article 171 EC). This EU body constitutes a public-private partnership (PPP)
between the pharmaceutical industry represented by EFPIA, and the European
Union. The aim is to implement a research agenda defined by the European
research communities (pharmaceutical industry, academic/research organisations,
Member States) in the field of pre-competitive pharmaceutical research. This is
to be achieved by means of in-kind contribution from the participating
pharmaceutical companies, matched by a direct financial contribution from the
EU. The JTI IMI thereby aims at increasing the investments in the
biopharmaceutical sector in Europe and provide socio-economic benefits for
European citizens, contribute to the health of European citizens, increase the
competitiveness of Europe and help establish Europe as the most attractive
place for biopharmaceutical research and development.

At the time of the first interim
evaluation, the IMI JU had operated as an autonomous body for approximately one
year, had launched its first two calls and was about to launch the third call.
Fifteen projects from the first call had kicked-off and were ongoing, and a
further 8 projects from the second call were under negotiation. These projects
have been launched in the first few months of 2011. The in-kind contribution
from the EFPIA companies to projects in the first two calls is € 198 million
and the financial contribution from the EU budget, disbursed by the IMI JU is €
190 million. This is slightly lower than what was foreseen at the launch of IMI
(€ 199.5 million).

3.
Conduct of the evaluation

The objective of this evaluation was to
assess the IMI JU against three criteria: the quality and efficiency
of the IMI JU and its progress towards the objectives set. The
Commission invited a panel of independent experts[4]
to perform the first interim evaluation. The experts reviewed evidence and
interviewed stakeholders[5].

The evaluation panel issued its report on
20 December 2010. The full report is available on the EUROPA website (http://www.imi.europa.eu/content/documents#imi\_governance).

4.
Evaluation results and recommendations

The overall appreciation of the panel for
the first interim evaluation of IMI is positive. The experts state that:

"through the IMI JU, Europe has succeeded
in establishing a new business model between public and private sectors"
...by bringing together the pharmaceutical industry, academia, SMEs as well as
regulatory authorities and patient organisations.

This is considered a rare achievement by the
experts.

This cooperation:

"enables mutual learning and the
opportunity to build understanding of the respective rationales and approaches,
with benefits to all parties."

Thereby IMI is a novel model for "open
innovation", having achieved a unique scale in Europe.

The experts consider the scientific scope
of IMI as well targeted and:

"The consortia formed so far carry out
focussed research addressing problems of immediate relevance to industry and
future public health. To have formed and embedded this new, applied research
environment is a significant achievement for Europe."

As critical comments the evaluation panel
underlines that it has heard evidence that the framework of IMI is not
satisfactory for all stakeholders, especially concerning funding rates and
sharing of intellectual property. The experts observed that the IMI:

"Executive Office is not yet fully
staffed, but within this limitation is providing the necessary support to the
programme."

The experts consider that the implementation
of certain aspects of the IMI governance should be refined in order to better
align the different actors in IMI, namely the Governing Board, the Scientific
Committee, the Executive Office and the States Representatives Group.

In their performance assessment, as regards
the effectiveness, the experts conclude that after the process of setting up
the structure, IMI is now running well. Also, the first call projects running
so far are working well. While the operation of IMI is overall considered as
efficient, recommendations for improvements are given. Based on the large
response to the calls, the positive reports about the evaluations from the
independent observers as well as the potential of the projects and enthusiasm
of the participants IMI is considered of high quality. The development of
appropriate indicators to objectively measure the quality of IMI is considered
important.

To put the assessment of IMI in a strategic
context, the evaluation panel performed an analysis of the strength, weaknesses,
opportunities and threats for IMI (SWOT analysis). The panel identified many
strengths of IMI, such as the creation of a unique partnership between the
public and private sectors that enables broad engagement of stakeholders and
access to otherwise hidden resources in the pharmaceutical area. Further, the
panel mentions the successful implementation of IMI, support from founding
members, interest in participation and the high quality of the projects.

The panel considers the lack of key
performance indicators and proactive communication activities, including
limited engagement with policy makers as weaknesses. The fact that internal
governance structures are not yet working optimally and lack of autonomy of the
Executive Office are also considered as weaknesses.

The links with regulators, possible
synergisms with programmes at national level, established through the States
Representatives Group and the launching of larger, more strategic projects are
all considered as opportunities for IMI.

The identified weaknesses can become
threats, if not appropriately addressed. The economic crisis and the continued
change in the pharmaceutical industry and the rapid pace of scientific change
can potentially become threats for IMI. The move towards larger projects identified
as an opportunity can also lead to new threats for IMI.

Based on the identified weaknesses in the
areas of governance structures, lack of proactive communication, not optimum
exploitation of the advisory potential of stakeholders such as the European Medicines
Agency and finally the lack of key performance indicators, the evaluation panel
has come up with seven recommendations to make IMI better:

1.
Continuously improve stakeholder involvement in
IMI supported research projects.

2.
Continuously ensure EFPIA and Commission
commitment to IMI’s success and sustainability.

3.
Ensure excellence and exploit new ways to
support IMI scientific objectives.

4.
Improve IMI communication.

5.
Reinforce and streamline decision making and
well-functioning processes.

6.
Ensure best use of IMI results and IMI
sustainability.

7.
Develop monitoring and evaluation processes.

Each of the top-level recommendations is
broken down into several sub-recommendations, addressed to either one or
several of the following: IMI Executive Director, IMI JU Governing Board,
European Commission, EFPIA for a total of 28 recommendations. The detailed
recommendations are listed in the annex.

5.
Planned follow-up actions

The Commission welcomes the interim
evaluation report about IMI JU. It takes note of the recommendation of the
evaluation panel. The Commission is committed to working with EFPIA to
implement the recommendations addressed to the IMI Governing Board, where the
two founding members work together to give strategic direction and oversight to
the IMI JU. The Commission is committed to implementing the recommendations
addressed to it and is open to collaborating with EFPIA and the IMI Executive
Director implementing the recommendations addressed to them.

Most of the recommendations can be
implemented in the short to medium term and indeed many are already being
addressed through actions from the Governing Board and the Executive Office.

The recommendation to setting up public
private partnerships as a 'special body' can only be addressed in the context
of the discussion about the next generation of public - private partnerships
(PPPs).

(a)
Recommendations addressed to the IMI Governing
Board

The evaluation panel has issued the largest
number of recommendations to the Governing Board of IMI, in which EFPIA and the
Commission are equally represented.

The recommendation regarding concerns about
the IMI IP policy has already been addressed by the Governing Board and the
Executive Director. A clarification note to the IMI IP policy had been issued
in 2009, supplemented by a guidance note published in November 2010. An IP Help
Desk has been established by the Executive Director, and operating since
December 2010

The experts recommend that the IMI Board
should reflect on how to best account for resources contributed by EFPIA from
outside of Europe. The Commission welcomes EFPIA company participation in IMI
projects from outside of Europe. EFPIA can inform about this participation,
which is in addition to the in kind contribution that is expected in proportion
to the funding for academic and SME researchers contributed by the public side.

The issue of rates for indirect costs of
academic and SME participants in IMI projects eligible to receive a financial
contribution is addressed by a revision of the IMI grant agreement. In addition
to the current flat rate for indirect costs participants eligible to receive a
financial contribution from IMI will be able to charge actual indirect costs,
including a method for simplified calculation of the actual indirect costs.

The Commission fully endorses the
recommendation of continuing to ensure excellence and exploit new ways to
support the scientific objectives of IMI by implicating the States
Representatives Group and the Scientific Committee. This has been addressed in
the ongoing revision of the Scientific Research Agenda and the preparation of
the topics for the fourth call. Input from the Scientific Committee and the SRG
will continue to be solicited for the definition of the topics for the
remaining IMI calls. The fourth call already contains the first topics for
"Think Big" projects, a trend that will continue. Bringing in
industries converging with the pharmaceutical industry is already happening in
several of the ongoing IMI projects. The Commission would welcome further
examples of this, where scientifically justified.

The Commission agrees that more can be done
as regards communicating about IMI. Together with the Executive Director, the
Governing Board is working on refining the communication strategy for IMI and
putting it into practice. It is clear that the communication strategy of IMI is
led by the Executive Director with support from the founding members.

During the set-up of IMI and its early
implementation, the IMI Governing Board had to address many organisational
issues. As IMI is now moving into the phase of implementing the successive
calls, the Governing Board has more time addressing strategic issues of IMI. In
this context the Commission considers that in the spirit of a true partnership
decisions are taken at the Governing Board in the appropriate time frame.

The Commission agrees that knowledge
management processes need to be developed. This is being taken up in the fourth
call and the Commission supports continued attention to this aspect throughout
IMI. This will also support the sharing of knowledge between all IMI projects.

The experts recommend that the IMI Board
should consider how to realise value from excellent but ultimately unfunded
proposals through networking and knowledge management. The Commission agrees
that the second-ranked and following Expressions of Interest that are
considered of high quality in the evaluation represent significant potential.
However, it is unlikely that such projects will be funded in the way they were
proposed. Therefore the Commission considers that it will not be possible to
implement the recommendation of the evaluation panel as proposed. More
generally the Commission considers that it is a good proposal to open up
certain aspects of the knowledge management system of IMI, to incorporate
results from related research funded from other sources. This can for example
be of relevance in cooperation between IMI and other partnerships in
pharmaceutical research at national or international level.

Overall IMI is clearly a key initiative for
the European Commission, which is fully in line with the Europe 2020 Strategy
and the Innovation Union. The Commission is ready to further develop the
partnership in pharmaceutical research to the benefit of patients and to
improve the competitiveness of Europe.

(b)
Recommendations addressed to the Executive
Director

The Commission is ready to support the
Executive Director of IMI and the Executive Office in implementing the
recommendations addressed to him. Indeed, several of the recommendations, notably
as regards improving the communication activities of IMI, are also addressed to
the Governing Board.

The Commission agrees to the importance of
harnessing the innovation potential of SMEs for IMI. The activities of the
Executive Office to be in close contact with SME umbrella organisations are
welcome. The Commission considers that it is worth further reinforcing these
efforts. Meaningful involvement of patient organisations is key for biomedical
research. Amongst the projects that will be launched from the third call one
will specifically address this aspect.

Regulators and in particular the European
Medicines Agency (EMA) are also an important stakeholder in IMI. The Commission
welcomes their involvement in several ongoing projects and considers it relevant
for them to continually be implicated in the further development of IMI.
However, as EMA is also involved in IMI-funded projects, care needs to be taken
to avoid conflicts of interest and for example EMA should not be a member of
the IMI scientific committee.

During the setting up of the Executive
Office a considerable number of staff had to be recruited and some delays were
experienced. This phase is now ending and only the filling of a few more posts
is envisaged. The Commission does not have particular concern in this context.

The continued evaluation of the IMI through
Key Performance Indicators is fully supported by the Commission. Although the
recommendations in this area are addressed to the Executive Director of IMI,
the Governing Board has taken this up as being of key strategic importance and
will work with the Executive Director implementing this aspect.

(c)
Recommendations addressed to EFPIA

The Commission agrees that the leadership
for the definition of the Scientific Research Agenda and its implementation
through the launch of calls must come from EFPIA. The organisation of the
pharmaceutical companies is changing constantly, resulting in changes of staff
involved in IMI from EFPIA side. The Commission considers that after the
successful setting up and launch of IMI there has been some challenge of moving
ahead in the revision of the Scientific Research Agenda as fast as would have
been desirable. This revision is now almost complete and the call topics for
the 4th call have been defined. This call includes the first
"Think Big" topics are considered a success by the Commission.

In light of the volume of funds still to be
committed, for the Commission it will be very important that sufficiently high
commitment for in kind contribution will be made by EFPIA companies in all next
calls.

(d)
Recommendations addressed to the European
Commission

Both the Commission and EFPIA are
recommended to dedicate enough staff to IMI. The Commission considers that both
founding members have shown extraordinary commitment towards the successful
setting up of IMI, including the launch of the IMI JU as an autonomous entity.
Considering the number of processes that had to be established, the Commission
considers that overall this has succeeded well, while recognising that some
delays have occurred. It is inherent in a partnership between partners as
different as EFPIA and the European Commission that it takes some time to agree
on certain points, especially at the beginning. With the IMI JU Executive
Office now almost fully staffed, all operational responsibility has moved to
it. Indeed, the Commission is committed to giving the Executive Director full
autonomy for this responsibility. Accordingly, the number of staff dedicated to
IMI has been reduced at the Commission, without any loss of capacity to dealing
with the issues at hand.

The recommendation to develop a simpler
legal framework than the current set-up of IMI as a community body is in line
with the recommendations made by the JTI Sherpas' Group[6].
Changes to the Financial Regulation applicable to the general budget of the
European Union are required to make this possible.

Report on the First interim evaluation of
the Clean Sky Initiative

1.
INTRODUCTION

This document highlights the findings and
recommendations of the first interim evaluation of Clean Sky. Clean Sky is a
Joint Undertaking (JU) implementing the Joint Technology Initiative (JTI) in
the field of environmentally friendly aeronautical technologies. It formulates
the Commission’s initial response to the evaluation’s recommendations and sets
out follow-up measures. Thereby the Commission complies with the requirement to
report on the first interim evaluation of Clean Sky as laid down in its
founding act[7].

2.
BACKGROUND

The Clean Sky Joint Undertaking contributes
to the implementation of the Seventh Framework Programme of the European
Community for research, technological development and demonstration activities
(2007-2013) and particularly to the Specific Programme "Cooperation"
on its theme "Transport". Its objective is to develop innovative
technologies with low environmental impact for all flying segments of the Air
Transport System, allowing substantial reduction of noise, fuel consumption and
emission of noxious gases in line with the targets set by the Technology
Platform for Aeronautics ACARE. Its activities will consist in technical
development up to full scale final demonstrators covered by Grant Agreement to
named beneficiaries and by further partners selected through Calls for
Proposals.

The Clean Sky Joint Undertaking became
autonomous on 19 November 2009, meaning that it has the operational capacity to
implement its own budget.

After the first 2.5 years of operation,
members in Clean Sky have performed activities for a cumulated value of € 232
million across all programme areas and the first flight tests of innovative
technologies have been accomplished. In addition to the members' activities,
seven Calls for Proposals have been launched so far for additional € 63 million
of funding (€97.5 million total scope of activities), engaging some 374
partners in 201 projects with an average duration of three years.

While this represents a considerable
engagement of facilities, resources and budget, delays with respect to the
original time plan have accumulated, due to initial difficulties in
establishing the Clean Sky Joint Undertaking internal procedures and
regulations as well as building up the technical teams and unfolding the
technical programme.

3.
CONDUCT OF THE EVALUATION

The objective of this evaluation was to
assess the effectiveness, efficiency and quality of the JTI operations, both
with regard to the Joint Undertaking and its operating bodies and the technical
activities carried out by its members and partners, as well as the progress of
Clean Sky towards its objectives as set up in Article 2 of the Clean Sky
Regulation. To this end, the Commission invited a panel of independent experts[8]
to conduct the evaluation.

The evaluation was carried out over the
period from 29 September to 7 December 2010, and the evaluation panel issued
its report on 15 December 2010. The evidence base for this evaluation included
legal, financial and other documents setting up Clean Sky, technical and annual
reports, project information and participation statistics. Interviews were
carried out with representatives from the JU, members and partners of Clean
Sky, including industry (and SMEs), research organisations and universities.

4.
THE EVALUATION RESULTS AND RECOMMENDATIONS

The evaluation panel recognises the
appropriateness of the Clean Sky Joint Undertaking (CSJU) concept and
acknowledges a number of achievements:

·
The setting up of an entirely new Public Private
Partnership.

·
Successful stimulation of developments towards
environmental targets.

·
Wide high level participation from all EU key
industries, and inclusion of a large number of SMEs, thereby forging new
collaborations and enhancing European integration.

At the same time, the experts express their
concern that Clean Sky has incurred significant delays in the technical
programme and urge for a robust action to ensure that the final technical
objectives are reached in full within the regulatory time frame. The panel
notes the following:

·
The start of the CSJU activities was slow as
compared to initial plans due to the time needed to establish and implement the
rules of procedures and the time required to build up the working teams for
both Integrated Technology Demonstrators and the Joint Undertaking Executive
Team.

·
The panel sees clear requirements for special
provisions for the implementation and the specific operating needs of Joint
Undertakings for Joint Technology Initiatives such as Clean Sky and for
developing a specific model regulation for PPPs as foreseen by Article 201 of
the proposed new Financial Regulation.

·
For future Joint Technology Initiatives, a clear
separation should be made between formal establishment and formal start of
technical activities. The Commission should ensure that prior to the formal
start of technical activities, the resources and administrative tools are
essentially available and that an in-depth review of the technical programme is
carried out.

5.
PLANNED FOLLOW-UP ACTIONS

The Commission welcomes the interim
evaluation report and takes note of the evaluation panel’s recommendations. The
Commission is committed to address its part of the recommendations and to work
with the stakeholders on the private side of the partnership and the Joint
Undertaking to help them address their parts. The Commission will undertake:

(1)
immediate actions for the existing Joint
Undertaking (i.e. the JTI activities in the period 2011-2013) to be followed up
through their governance structures, such as strengthening the analysis of
contents of traditional projects and JU topics, support
a revision of the delegations granted to the Executive Director by the
Governing Board and contributing to streamlining
administrative requirements within the current reporting duties; and

(2)
longer-term actions for the potential next
generation of PPPs. An assessment of the role and options for PPPs within the
Common Strategic Framework for Research and Innovation[9]
is now underway.

(a)
General recommendations

The Commission notes the positive opinion
of the panel on the Clean Sky JU concept, in spite of the delays and
underspending which have accumulated at programme start. It agrees that the JTI
model should be analysed further and is committed to assess the operational
aspects of the JTI in order to optimize its effectiveness in the context of
determining the "ideal house" infrastructure for future PPPs.

(b)
Recommendations to the European Commission

The Commission agrees with the panel's
views that a thorough analysis of the "Community Body" legal
framework should be carried out in line with the findings of the JTI Sherpas'
report[10]. Nevertheless, the
Commission considers that, after the initial period, the JTI JU appears to have
increased its efficiency, and that the technical work plan has been reviewed
thoroughly.

It recognises that the "Community
Body" approach is too rigid in some of its aspects to be applied to a
Joint Undertaking of the size of Clean Sky.

The Commission recognises the need to
better coordinate the calls published by Clean Sky and those published by the
Commission under the Framework Programme. It agrees with the panel which
recommends formalising the process of coordination between the two work
programmes. An appropriate procedure is being established.

It also recognises the need for
streamlining the coordination between the activities of the SESAR Joint
Undertaking and Clean Sky. It is noted that this task is under the
responsibility of the JUs concerned and the Commission is prepared to act as a
facilitator.

The Commission agrees with the panel
conclusion that the Clean Sky JU should be continued with special attention
towards adhering to the main objectives and work plans. It already closely
monitors and stresses the need to achieve the objectives set out in the Clean
Sky Regulation (article 2). However, the technical choices necessary to this
end are under the responsibility of the JU and in particular its industrial
members.

The Commission acknowledges the relevance
of regulatory measures to accelerate the introduction of new 'green'
technologies demonstrated in Clean Sky on aircraft. The inclusion of aviation
in the EU Emissions Trading Scheme (ETS) as of 1 January 2012 constitutes a
step in this direction.

The Commission agrees with the panel that
EU funding should target high risk R&D activities where the market failure
component is substantial. The programme of Clean Sky fulfils this condition
while the necessary controls and monitoring activities are in place, including
the possibility of carrying out technical audits. It is noted that the JU has
the responsibility of ensuring that the activities undertaken are focused on
meeting the Clean Sky objectives which include novel and advanced technological
concepts requiring full scale demonstration before being considered for
deployment.

(c)
Recommendations to the Governing Board

As a member of the Governing Board, the
Commission agrees to review the level of decisions this body is called upon in
order for it to focus on strategic decision and to conduct reviews of research
needs and policy priorities, when necessary with the involvement of Clean Sky's
Scientific and Technical Advisory Board and/or external experts. The Commission
would support to the extent possible a revision of the delegations granted to
the Executive Director to enable the Governing Board to focus on strategic
decisions, leaving the daily management to the Executive Director. The
Executive Director should be fully responsible for the implementation of the
budget, within the boundaries set out by the Annual Implementation Plan as
adopted by the Governing Board.

In particular, the Commission supports the
recommendation of the panel calling for an increase of staff levels to enable
the Executive Team led by the Executive Director to fully exercise its
coordinating and monitoring role. The Commission would welcome a proposal of the
Executive Director on this point.

The Commission understands the need for a
contingency budget as underlined by the panel to cover unforeseen changes,
repairs etc. It looks forward to a proposal on this point from the Joint
Undertaking, in line with the current Commission financial regulatory
framework.

The panel recommends introducing
multi-annual grant agreements for the members of Clean Sky. The Commission
points out that the need to have annual amendment to the grant agreements of
the members derives from the availability of the Commission budget which is
subject to the annuality principle governing the general budget of the European
Union, as well as for practical reasons of accounting transparency. However,
the Commission has recognised the need to reduce the administrative burden
which arises from the annual grant agreement cycle. In addition, after 2013,
the Members' activities will already be covered by multi-annual grant
agreements, as the end of FP7 will lead to a final commitment to cover all the
remaining activities of the JU.

(d)
Recommendations to the Joint Undertaking

The Commission agrees that a number of
streamlining measures should be put in place in order to increase the
effectiveness and control capability of the JU over technical activities
carried out by members and partners. It notes further that some procedures were
newly developed as Clean Sky is part of the first wave of JTIs being
implemented, and considers that adequate processes and tools should be put in
place in order to monitor and analyse the strategic achievements of Clean Sky.
In particular, the panel recommends a number of measures to be implemented to
ensure that all objectives are reached in full, including auditing strategies
and the monitoring of roadmaps. While the Commission agrees with the aim of the
recommendation, it is up to the JU to respond on practical issues of
implementation.

The Commission agrees with the request of
speedy and efficient implementation of the panel recommendations.

The panel highlights the importance of
proper communication both within and outside Clean Sky. The Commission agrees
to this, and notes that a Communication strategy document has been prepared by
the JU to that effect.

Finally, the Commission shares the panel's
opinion that the Technology Evaluator has a central role in Clean Sky, both
technically and politically. It endorses the recommendation of raising the
profile of the Technology Evaluator and agrees to a more proactive role for it
at the later stages of the Clean Sky programme, also in view of future
developments of the JTI concept.

(e)
Recommendations to the Stakeholders

The Commission notes that the panel
highlights the need for streamlining technical activities in order to ensure
reaching the Clean Sky targets. The Commission supports this view. It also
supports the position that it is imperative for Clean Sky to reach its
objectives in full as a condition for developing further the JTI concept in the
aviation domain.

(f)
Conclusions

The Commission acknowledges the thorough
and in-depth work carried out by the Interim Assessment panel. Its
recommendations are valuable in order to identify and focus on specific areas
the improvement of which would increase the effectiveness of the Clean Sky JU programme.

It is satisfied that the validity of the
JTI approach is recognised by the panel and undertakes to implement corrective
measures when appropriate within its powers of intervention and invites other
bodies (JU, stakeholders, Governing Board members) to act accordingly.

The recommendations are taken on board and,
when it comes to operational aspects (mostly addressed to the JU), actions have
been proposed and, when appropriate, a deadline identified.

First interim evaluation of the Fuel Cells
and Hydrogen Initiative

1.
INTRODUCTION

This section
highlights the findings, recommendations and conclusions of the first interim
evaluation of the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) performed
by a panel of independent experts. It also formulates the Commission’s initial
response and position to the panel’s recommendations and proposes follow-up
measures.

2.
BACKGROUND

The Seventh Framework Programme (FP7) for
research, technological development and demonstration activities, the European
Union provides for a financial contribution for the establishment of long term
public-private partnerships in the form of Joint Technology Initiatives
(hereinafter referred to as JTI) which could be implemented through Joint
Undertakings within the meaning of Article 171 of the EC Treaty (now Article
187 of the TFEU) and defines specific criteria to identify them.

The Fuel Cells and Hydrogen Joint
Undertaking (hereinafter referred as FCH JU) was established via Council
Regulation[11]. The FCH JU is a
public-private partnership that has as members the European Union represented
by the European Commission, the fuel cell and hydrogen industries represented
by the "NEW" Industry Grouping and the research community represented
by the "N.ERGHY" Research Grouping. Its main aim is to accelerate the
market introduction of these technologies, realising their potential as an
instrument in achieving a carbon-lean energy system.

As for the other JTIs, the process of
creation of the FCH JU was rather slow and complex due to the constraints and
requirements arising from its status as a "Community body". The FCH
JU became autonomous on 15th November 2010, when it reached the operational
capacity to implement its own budget. During the period May 2008 - November
2010, the responsibility for managing the FCH JU was with the European
Commission.

Three annual
calls for proposals have already been completed up to date and a balanced
portfolio of projects has been selected. Those from the first two calls for
proposals (44 projects already on-going) will receive grants for a cumulative
value of ~ 100 million Euros, engaging some 250 different partners. The
negotiations for projects of the 2010 call for proposals (estimated 43 grants
for a value of ~ 89 million Euros) should be completed by the end of July 2011.
The 2011 call was published on 3rd of May 2011. Consequently, the
operational delivery of the FCH JU to date is as originally planned.

On April 20th
2011, the Commission adopted a draft proposal for amending the Council
Regulation (EC) N° 521/2008.This amendment recognises the important role of the
Research grouping and the research community and at the same time will allow to
better align the FCH JU maximum funding rates to those of FP7 making them more
predictable and competitive than at present.

3.
CONDUCT OF THE EVALUATION

The objective of this evaluation was to
assess the effectiveness, efficiency and quality of the FCH JU operations, both
with regard to the Joint Undertaking and its operating bodies and the technical
activities carried out by its members and project participants. In particular,
emphasis was put on the progress of the FCH JU towards its objectives as set up
in article 2 of the FCH JU Regulation. To this end, the Commission invited a
panel of independent experts[12] to produce a final
report based on the review of evidence obtained from the background material
procured by the Commission and, mainly, from interviewing a representative group
of selected stakeholders.

The experts' evaluation was undertaken
between mid-December 2010 and mid-April 2011, i.e. in the first few months of
the FCH JU autonomous operation. During this time the Commission services
provided the necessary secretarial assistance to the expert panel. The
background material procured by the Commission for this evaluation consisted
inter alia of legal, financial and other documents related to the setting up
the FCH JU, technical and annual reports, minutes of meetings, and information
and statistics on calls for proposals and projects. The main evidence base was
obtained through interviews carried out with a representative and balanced
group of people covering the whole spectrum of stakeholders of the FCH JU.

4.
THE EVALUATION RESULTS AND RECOMMENDATIONS

The primary
outcome of the experts' report is that the "FCH JU should be maintained
and supported to implement its work as originally envisaged". However,
the experts have also identified a number of issues and problems encountered by
the FCH JU as well as some areas where its operation could be improved, and
they had made a number of specific recommendations to this end.

First of all,
the report states that the establishment of the FCH JU as an industry-led
public-private partnership (PPP) is an achievement in its own right and
represents a valuable instrument for the European Union. It is considered a
unique platform and instrument at European level involving the most important
stakeholders in defining objectives and implementing and monitoring activities
towards deployment of fuel cells and hydrogen technologies. The evaluation
found also that the overall technical objectives of the FCH JU as defined in
the Multi-Annual Implementation Plan (MAIP) remain ambitious and competitive in
comparison with efforts world-wide. It concluded that the FCH JU approach is
generally regarded as a good mean to enhance public-private activities in the
field and perceived as an improvement to the research landscape.

However, the experts consider that the set-up of the FCH JU took too
long and conclude that the current legal framework as a “Community/Union body”
is not best-suited to industry led public-private partnerships like JTIs and
should be streamlined. They also highlight that funding rates for FCH JU
projects have proved variable from year to year and, in addition, always
considerably lower than those of FP7. Other expressed concerns requiring due
attention are the inadequate resources of the Programme Office for effective
project monitoring and management, the insufficient cohesion and collaboration
with Member States’ related programmes and, the lack of a formal communications
plan and an international cooperation strategy.

In order to
address the different issues and difficulties identified in the report, the
experts' panel makes a series of recommendations that aim to remove or reduce
weaknesses as identified in the current operations of the FCH JU and to improve
its effectiveness and quality. The recommendations have been grouped in five
broad categories:

(1)
Reinforce portfolio management

(2)
Ensure high agility of operations and
adaptability to changing competitive forces

(3)
Improve visibility, communication and outreach

(4)
Improve collaboration and alignment with Member
States

(5)
Ensure high efficiency of operations

The position and response of the Commission to these recommendations
is presented in the following section.

5.
PLANNED FOLLOW-UP ACTIONS

In general, the Commission agrees with the
panel overall views and conclusions as well as with most of the specific
recommendations. The Commission is committed to address its part of the
recommendations and to work together with the other FCH JU stakeholders and
bodies to treat the recommendations addressed to them. The Commission will
undertake:

Short-term actions
affecting the operational aspects of the FCH JU in the period 2011-2013; and

Longer-term
actions of relevance for the potential next generation of PPPs within the
Innovation Union initiative launched to address the Europe 2020 strategy.

The Commission notes the positive opinion
of the panel on the FCH JU concept, in spite of the difficulties encountered
and the issues identified. It also agrees that the potential continuation of
the FCH JU, or an equivalent initiative, in a new phase of EU support following
FP7 should be further reviewed at a later date.

5.1.
Group of Recommendations 1: "Reinforce
portfolio management"
5.1.1.
The Commission acknowledges
the panel comment on the need for a thorough review and update of the Multi
Annual Implementation Plan (MAIP) before the production of the Annual
Implementation plan (AIP) for 2012. However, it notes that such a revision is
currently on going with a final version of the document expected in the third
quarter of 2011. It also notes that the Commission lead service for the
Technologies Information System (SETIS) has committed to produce a methodology
for reviewing and testing the correlation between the project targets and the
overall achievement of objectives and to contribute to the development of a
roadmap for fuel cell and hydrogen technologies extending up to 2020.
5.1.2.
The Commission is also
aware that breakthroughs are needed for hydrogen production, storage and
distribution and that the FCH JU current projects portfolio is light on this
critical area. However, it notes that in the AIP 2011 a higher share of the
funding is foreseen for this Application Area. The Commission will oversee that
this is also the trend for AIPs 2012 and 2013. The FCH JU programme should also
look at synergies between hydrogen and renewable electricity and integrated
infrastructure solutions for fuel cell and battery electric vehicles (FCVs,
BEVs). Also quality manufacturing methods should be considered.
5.1.3.
The Commission agrees
that the priorities for Regulations, Codes and Standards (RCS) should be
formulated by industry. The Commission also agrees on the relevance of RCS to
accelerate the introduction of fuel cell and hydrogen technologies in the
market and feels that it is an area where more effort and coordination with
international partners are needed.
5.1.4.
The Commission fully
agrees that the structure and composition of the annual calls for proposals
should explicitly support the objectives of the FCH JU. The Programme Office
should make sure that the call topics and subsequent projects are wholly in
response to challenges identified as arising from the FCH JU objectives and
this aspect should prevail over specific industrial interests and/or
established competences of specialised expert communities. To that end, the
Commission advices the Executive Director to make sure that the Project
Managers of the FCH JU get involved early in the process of elaborating the
Annual Implementation Plans.
5.1.5.
The Commission
recognises that basic research seeking radical innovation is not sufficiently
addressed in the FCH JU Annual Implementation Plans and notes that it has
already raised this point to the Governing Board. The Commission feels that
complementary support to this kind of research could be explored through the
"Future and Emerging Technologies" calls of the FP7 energy theme. The
agreement of the Energy Programme Committee will be sought to that end.
5.2.
Group of Recommendations 2: "Ensure high
agility of operations and adaptability to changing competitive forces"
5.2.1.
The Commission agrees
that all stakeholders of the value chain should be involved in the FCH JU. In
particular, the role of Regions and Municipalities (through “HyRaMP”) should be
enhanced. Furthermore, the Executive Director could explore potential links
with the financial sector - especially EIB and Venture Capital community -
as well as trade associations for industry users and various potential consumer
bodies.
5.2.2.
The Commission agrees
with the panel that the establishment of an SME contact point at the Programme
Office would facilitate participation of SMEs in product development and early
markets projects and encourages the Executive Director to provide the necessary
means and resources to that end.
5.2.3.
The Commission commits
to work together with the FCH JU to explore opportunities for complementarity
between fuel cell and battery electric vehicles (FCVs, BEVs) in the market
place. The recent report on automotive applications “A portfolio of
power-trains for Europe: a fact-based analysis” performed by McKinsey could be
used as the guidance document. The relevant Commission Services, the Programme
Office and the Industry Grouping should take the necessary steps in order to
explore these opportunities.
5.2.4.
The Commission
recognises the need for a strategy to strengthen the development plans for
stationary applications in a similar way to what has been done for automotive
applications (i.e. the above-mentioned “McKinsey report “). However, the
Commission notes that a public procurement for a contract to establish an
independent fact base for fuel cell technology in stationary applications as
well as a European based roll out plan is foreseen in the FCH JU Annual
Implementation Plan 2011.
5.3.
Group of Recommendations 3: "Improve
visibility, communication and outreach"
5.3.1.
&
5.3.2.
The Commission
acknowledges the need for an effective communication strategy and dissemination
plan both within and outside the FCH JU in order to increase the
"visibility" of hydrogen and fuel cell technologies identified by the
panel. However, it notes the positive steps already taken since the appointment
of the "Policy and Communications Officer" and the "Stakeholder
Relationship Manager", which have resulted inter alia in the development
of a new website and in the first draft of a FCH JU Communication (internal and
external) strategy. The Commission also welcomes the proposal of the Programme
Office of linking the Stakeholders General Assembly with the review of all FP7
ongoing projects on FCH and will contribute to the definition of a suitable
approach.
5.3.3.
The Commission agrees
with the panel recommendation to best involve the States Representatives Group
in the FCH JU communication and outreach activities.
5.3.4.
The panel's views that
an appropriate strategy and priorities should be developed and agreed for
international cooperation are also shared by the Commission. The FCH JU should
be able to define the level of international engagement or participation
required to support the achievement of its programme objectives, building on
previous experiences. Existing cooperation schemes such as the International
Partnership for Hydrogen and Fuels Cells in the Economy (IPHE) and the EU-EU
Energy Council should continue with an increasing support of the Programme
Office.
5.3.5.
The different services
of the Commission involved in the activities of the FCH JU should coordinate
their effort to ensure that the outputs from the FCH JU projects are integrated
into, and used to support to the relevant EU policies, particularly those
stemming from the EU 2020 Strategy such as the "Innovation Union" and
"Resource efficient Europe" Flagship Initiatives.
5.4.
Group of Recommendations 3: "Improve
collaboration and alignment with Member States"
5.4.1.
&
5.4.2.
The Commission takes
note of the panel's view that the States Representatives Group (SRG) needs to
significantly improve the interaction and coordination between the activities
of the FCH JU and the Member States’ programmes. To that end, the Commission
agrees that the profile of the SRG members needs to be revised so that they are
connected directly to their domestic policy and programme delivery and able to
identify opportunities for alignment of national activities to those of the FCH
JU. The Commission also recognises the need to further involve the SRG members in the activities of the FCH JU.
5.4.3.
The Commission fully
supports the panel recommendation to explore joint funding schemes between FCH
JU and Member States, in particular, the FCH JU should consider using some of
the funding mechanisms currently being tested by some of the European Industry
Initiatives (EIIs) of the SET Plan. The mapping exercise currently being
performed by the responsible Commission service is considered as an important
first step.
5.5.
Group of Recommendations 5: "Ensure high
efficiency of operations"
5.5.1.
The Commission
acknowledges the panel's general view that the current legal framework as a
Community/Union body is not best-suited to industry led public-private
partnerships like JTIs and notes the panel's support to the related
recommendations of the JTI’s Sherpa Group. In addition, the Commission
recognises that the resources for project management and monitoring might have
to be strengthened and agrees that the possibility of sharing resources for
required administrative functions between the different JUs to reduce costs is
worth to be considered. The Commission would welcome proposals from the
Executive Directors on these points.
5.5.2.
The Commission takes
note of the panel's view that interaction and exchange between projects should
be promoted and that the planned Stakeholder General Assemblies will include
the review of all FP7 on-going projects (see position on recommendations R3.1
and R3.2 above). However, the Commission underlines that all FCH JU projects are
still at their early stages.
5.5.3.
The Commission
recognises the need for the establishment of a robust system for project
monitoring and assessment. However, it notes that a proposal received in the
call 2010 for the development of a framework for technology monitoring and
assessments (TMA) is currently being negotiated and, if successful, could
provide the necessary tools for
assessing progress of projects and of the programme.
5.5.4.
The Commission
acknowledges the need to establish international benchmarking against
comparable schemes in order to help guide targets for the selection of future
projects. The TMA framework, to be developed in the above-mentioned proposal,
should provide the necessary tool also to that endeavour.
6.
Conclusions

The Commission acknowledges the thorough
and in-depth work carried out by the Evaluation Panel and is satisfied that the
panel recognises the validity of the JTI approach. It also appreciates the
positive views about the future prospects of the FCH JU.

The Panel recommendations are considered
very valuable for removing or at least reducing weaknesses identified in the
current operations of the FCH JU and for improving its effectiveness and
efficiency.

The Commission undertakes to implement
corrective measures when appropriate within its powers of intervention. It also
commits to work together with the other FCH JU stakeholders and bodies to
address the recommendations appropriately.

[1]               First Interim Evaluation of the ARTEMIS and ENIAC
Joint Technology Initiatives (30 July 2010), Clean Sky 1st Interim Evaluation
(15 December 2010), First Interim Evaluation of the Innovative Medicines
Initiative Joint Undertaking (20 December 2010), First Interim Evaluation of
the Fuel Cell & Hydrogen Joint Undertaking (13 April 2011)

[2]               http://ec.europa.eu/dgs/information\_society/evaluation/rtd/jti/

[3]               Council Regulation No 73/2008 of 20 December 2007
setting up the Joint Undertaking for the implementation of the Joint Technology
Initiative on Innovative Medicines.

[4]               The expert panel was composed of the following
experts: Dr Fred Gvillo (chairman) – formerly of Schering AG, Prof. Magdalene
Rosenmöller (rapporteur) - IESE Business School, Tom Andersen – European
Investment Bank, Prof. Manfred Horvath - Vienna University of Technology, Ruth
Keir – Archea Ltd., Bart Wijnberg – former employee at the Dutch ministry of
health.

[5]               The IMI-related documents and information consulted
included the legal documents for setting up IMI, documents describing the
functioning of the IMI JU, the JTI Sherpa report and published articles about
IMI as well as information including statistics about the projects selected so
far.

[6]               Designing together the 'ideal house' for
public-private partnerships in European research- JTI Sherpa’s' Group – Final
Report – January 2010, ftp://ftp.cordis.europa.eu/pub/fp7/docs/jti/jti-sherpas-report-2010\_en.pdf

[7]               Council
Regulation No 71/2008 of 20 December 2007 setting up the Clean Sky Joint
Undertaking

[8]               The expert panel consisted of the following members:
Dr. Michel Huguet (chairman) (FR), formerly Technical Director of the JET Joint
Undertaking; Prof. Enzo Bertolini (IT), Director of the Astronomical
Observatory of Valle d'Aosta, formerly Head of the Power Supply Division of the
JET Joint Undertaking; Dr. Dietrich Eckardt (DE),Senior
Engineering Consultant, Alstom Switzerland Ltd; Prof.
Peter Hecker (Rapporteur) (DE),Managing Director - Institute of Flight Guidance, Technical University
of Braunschweig; Dr. Ivonne Herrera (NO),Research
Scientist, SINTEF; Prof. Manfred Horvat (AT), Vienna
University of Technology ;

[9]               COM(2011) 48: Green Paper: From Challenges to
Opportunities: Towards a Common Strategic Framework for EU Research and
Innovation funding

[10]             "Designing Together the 'ideal house' for
public-private partnerships in European research", JTI Sherpas'
Report, Final Report - January 2010

[11]             Council Regulation (EC) No 521/2008 of 30 May 2008

[12]             The expert panel consisted of the following members: Elisabet
Fjermestad Hagen (Chair) (NO), formerly Director for business development of
new energy markets of Norsk Hydro ASA; John Loughhead (Rapporteur) (UK),
Executive Director of the UK Energy Research Centre;
Dr. Jens Rostrup-Nielsen (DK), formerly Executive Vice
President (R&D) at Haldor Topsøe A/S and adjunct professor at the Technical
University of Denmark; Maria Rosaria Di Nucci (IT), Associate senior research fellow at the Environmental Policy
Research Centre of the Freie Universität Berlin; Ana Sofia Caires Branco (PT),
Technology Transfer expert having worked in several energy and transport
agencies and research centres (e.g. AREAM, CIDAUT; Prof. Manfred Horvat (AT),
Vienna University of Technology.

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