Source: EURLEX
Language: en
Format: md

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| 9.8.2008 | EN | Official Journal of the European Union | C 204/19 |

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Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation setting up the Fuel Cells and Hydrogen Joint Undertaking

COM(2007) 571 final — 2007/0211 (CNS)

(2008/C 204/04)

On 30 November 2007 the Council decided to consult the European Economic and Social Committee, under Article 95 of the Treaty establishing the European Community, on the

Proposal for a Council Regulation setting up the Fuel Cells and Hydrogen Joint Undertaking

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 February 2008. The rapporteur was Mr Dantin.

At its 443rd plenary session, held on 12 and 13 March 2008 (meeting of 12 March), the European Economic and Social Committee adopted the following opinion by 117 votes, with 7 abstentions.

1.   Conclusions and recommendations

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| 1.1 | The Committee welcomes the decision on setting up the Fuel Cells and Hydrogen Joint Undertaking. It considers that this approach to relaunching investment in R&D has the potential to give European businesses a stable frame of reference, making it possible to overcome the current fragmentation of Community financing and coordinate research, which is often too widely dispersed, thereby helping to make it more effective. |

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| 1.2 | It welcomes the choice of this sector, which ties in with the Lisbon strategy, with the Barcelona objectives on funds devoted to R&D, and also with other Community policies concerning, in particular, the environment and sustainable development. |

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| 1.3 | In welcoming the decision under discussion, the EESC wishes firstly to underline the importance for the EU of the strategy being proposed for investment and coordination of research. In so doing, the Committee feels that the strategy strongly supports the creation of a European research area. |

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| 1.4 | However, in view of the multiplicity of sources of funding, the number of stakeholders and the substantial Community resources involved, the use and ownership of the end products of the research should be better defined, particularly with regard to intellectual property rights and patents. This shortcoming had already been pointed out by the Committee in its opinions on the creation of the IMI and Clean Sky Joint Undertakings. In this JTI, this shortcoming could prove even more sensitive, insofar as the end product will interest rival companies on the market, particularly car manufacturers. |

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| 1.5 | Finally, the Committee feels that the following measures are necessary:   |  |  | | --- | --- | | — | a genuine simplification of procedures, not least because of the negative impact that red tape has had on previous R&D programmes. In this context, the EESC regrets that no serious assessment has been carried out in order to pinpoint the reasons for any difficulties encountered by the European Technology Platforms (ETPs) and prevent any further difficulties; |  |  |  | | --- | --- | | — | an information programme aimed at encouraging the necessary private and public funding to be released; |  |  |  | | --- | --- | | — | the establishment of appropriate vocational training programmes to ensure that the skills of workers match the jobs created by this JTI. | |

2.   Introduction

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| 2.1 | The purpose of the proposed Council regulation is to launch one of the very first European public-private partnerships in the area of research and development. It is one of the six Joint Technology Initiatives (JTIs). This partnership, the Fuel Cells and Hydrogen Joint Undertaking, concerns a strategic sector for the diversification and future availability of energy. |

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| 2.2 | The general aim of this Joint Undertaking is to allow industry, Member States and the Commission to pool their resources in selected research programmes. |

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| 2.3 | Unlike the traditional strategy, which involves providing public funding for projects on a case-by-case basis, JTIs involve large-scale research programmes with shared strategic research goals. This new approach should create a critical mass for European research and innovation, consolidate the scientific community in key strategic sectors, and harmonise the funding of projects so that research findings can be put to use more quickly. JTIs concern key sectors where the current instruments have neither the scale nor the speed to keep or place Europe at the forefront of global competition. These are sectors where national, European and private funding of research can bring substantial added value, especially by stimulating an increase in private R&D expenditure. |

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| 2.4 | Fuel cells are highly efficient energy converters capable of delivering substantial greenhouse gas and pollutant reductions. They offer flexibility to the energy mix as they can be operated on hydrogen and other fuels such as natural gas, ethanol and methanol, thus making a decisive contribution to protecting the environment and combating pollution. |

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| 2.5 | In the fuel cells and hydrogen sector, the purpose of the Fuel Cells and Hydrogen Joint Undertaking is to help develop key competences in the sector and thus strengthen Europe's competitiveness. The proposed regulation sets down the legal framework needed to set up this kind of joint undertaking. |

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| 2.6 | The Fuel Cells and Hydrogen Joint Undertaking also contributes to the implementation of the Environmental Technologies Action Plan (ETAP) provided for by Communication COM(2004) 38 final, which included this technological platform among the priority actions of the ETAP. |

3.   Context and general considerations

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| 3.1 | The scarcity of energy and the constant insecurity of supply sources compromise people's quality of life and make it hard for European enterprises to remain competitive. This could have a serious impact in the future, creating permanent instability and increasing energy prices. |

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| 3.2 | For these reasons, hydrogen-based fuel cells are an extremely useful solution for the future: as well as making it possible to diversify available energy sources, they are clean energy converters, as they only emit steam. Other types of fuel cells, using natural gas or other fossil fuels, also reduce emissions as a result of their higher efficiency. |

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| 3.3 | The introduction of hydrogen as a flexible energy carrier can contribute positively to energy security and stabilise energy prices, as it can be produced from any primary energy source, and as such can introduce diversity into the transport mix, which is currently 98 % dependent on oil. |

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| 3.4 | The annual world turnover of the fuel cell industry in 2005 amounted to about EUR 300 million, of which Europe accounted for only 12 %; meanwhile, world investment in research was estimated at about EUR 700 million, 78 % of which was in North America against only 10 % in Europe. |

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| 3.5 | The present structure of the fuel cell and hydrogen industries in Europe is therefore unsatisfactory, even though significant EU public funds have already been invested, with the topic already included in the FP7 energy and transport research portfolio. Europe's research efforts are too far behind those in other regions of the world; according to an EC study (the ‘HyLights’ project by DG TREN), the EU is five years behind Japan and North America when it comes to fuel cell vehicles. |

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| 3.6 | Without new, specific R&D efforts, the industrial development of a key sector such as fuel cells and hydrogen could fall even further behind the global competitors, and this would have a negative impact on industrial development and employment in the sector. |

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| 3.7 | The main problems brought to light by the Commission's analyses and consultations stem from the complexity of research needed in the sector, and the lack of a specific Community agreement for a long-term investment plan. |

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| 3.8 | In this context, given the work needed in terms of innovation, which requires considerable resources, it seems clear that no enterprise or institution can carry out the necessary research alone. |

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| 3.9 | As well as being insufficient, the resources currently available are not put to the best use, as evidenced by the gaps in programmes and/or needless overlaps; these resources are not enough to fund a large scale, EU-wide programme. |

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| 3.10 | Moreover, the European fuel cell sector is not sufficiently coordinated between different countries and activity areas (academia, new industrial companies, high-tech SMEs, etc.) which restricts the exchange and pooling of knowledge and experience, and the technical breakthroughs needed to improve performance and materials and reduce system costs to meet the expectations of potential customers. |

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| 3.11 | Bringing a European dimension to research in fuel cells and hydrogen is an essential option; indeed, it may well be the only possible solution to the difficult challenges that the sector must face. |

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| 3.12 | The choice of a public-private joint undertaking should make it possible for Community R&D in the sector to move towards more effective research, as this is currently undergoing problems in achieving the necessary critical mass. This is vital to overcome the current fragmentation of research programmes in the various Member States which are unable to reach the essential critical mass due to their lack of resources to fund the necessary programmes. |

4.   Consistency

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| 4.1 | The starting point for research programmes is the Seventh Framework Programme (FP7). In order to achieve a competitive, dynamic economy, it is essential to give new impetus to R&D investment. |

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| 4.2 | The proposed regulation appears to be consistent with Community policies in research, with the Lisbon strategy (competitiveness), and with the Barcelona objectives (research spending) under which the EU is to invest 3 % of its GDP by 2010. |

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| 4.3 | It also appears consistent with the Commission communication on the initiative for An Energy Policy for Europe, launched in January 2007, and with the European Strategic Energy Technology Plan (SET Plan), on which the EESC is currently drawing up an opinion[(1)](#ntr1-C_2008204EN.01001901-E0001), and which has the aim of guiding the course of energy technology innovation over the coming decade. It is also consistent with other fields of Community action, such as the environment and sustainable development. |

5.   The Commission proposal

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| 5.1 | The proposed Council Regulation setting up the Fuel Cells and Hydrogen Joint Undertaking (COM(2007) 571 final) refers to the provisions of the 7th Framework Programme (FP7) covered by Decision 1982/2006/EEC, providing for a Community contribution towards the establishment of long-term public-private partnerships at European level in the area of research. |

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| 5.2 | These partnerships take the form of Joint Technology Initiatives (JTI) and arise from the work of the former European Technology Platforms (ETP). |

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| 5.3 | The Council, in its Decision No 971/2006/EC on the Specific Programme ‘Cooperation’, emphasised the need to set up public-private partnerships and identified six areas in which the creation of joint technology initiatives is appropriate with a view to relaunching European research:   |  |  | | --- | --- | | — | hydrogen cells and fuel cells; |  |  |  | | --- | --- | | — | aeronautics and air transport[(2)](#ntr2-C_2008204EN.01001901-E0002); |  |  |  | | --- | --- | | — | innovative medicines[(3)](#ntr3-C_2008204EN.01001901-E0003); |  |  |  | | --- | --- | | — | embedded computing systems[(4)](#ntr4-C_2008204EN.01001901-E0004); |  |  |  | | --- | --- | | — | nanoelectronics[(5)](#ntr5-C_2008204EN.01001901-E0005); |  |  |  | | --- | --- | | — | GMES (global monitoring for environment and security). | |

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| 5.4 | In the context of this general strategy, the regulation proposed in COM(2007) 571 final provides for the implementation of the Joint Technology Initiative (JTI) on fuel cells and hydrogen by means of setting up a Fuel Cells and Hydrogen Joint Undertaking. |

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| 5.5 | The Joint Undertaking is to be considered as an international body with a legal personality within the meaning of Article 22 of Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004, and Article 15 of Directive 2004/18/EC. Its seat will be in Brussels and its activities will cease on 31 December 2017, unless extended by Council decision amending the regulation under consideration. |

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| 5.6 | The Commission's main objectives in setting up this Joint Undertaking are explained in detail in Article 1.2 of the Statutes of the Joint Undertaking appended to the proposed regulation:   |  |  | | --- | --- | | — | to place Europe at the forefront of fuel cell and hydrogen technologies worldwide; |  |  |  | | --- | --- | | — | to enable the market breakthrough of fuel cell and hydrogen technologies, enabling commercial market forces to drive the substantial public benefits; |  |  |  | | --- | --- | | — | to reach the critical mass of research effort to give confidence to industry, public and private investors, decision-makers and other stakeholders to embark on a long-term programme; |  |  |  | | --- | --- | | — | to leverage further industrial, national and regional RTD&D investment; |  |  |  | | --- | --- | | — | to build the European Research Area; |  |  |  | | --- | --- | | — | to stimulate innovation and the emergence of new value chains including SMEs; |  |  |  | | --- | --- | | — | to facilitate the interaction between industry, universities and research centres on basic research; |  |  |  | | --- | --- | | — | to encourage the participation of the new Member States and candidate countries; |  |  |  | | --- | --- | | — | to support the development of new regulations and standards to eliminate artificial barriers to hydrogen trading; |  |  |  | | --- | --- | | — | to provide reliable information to the general public on hydrogen safety, and the benefits of the new technologies for the environment, security of supply, energy costs, and employment. | |

6.   Legal basis

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| 6.1 | The proposal consists of a Council Regulation with the statutes of the joint undertaking in an annex. It is based on Article 171 of the Treaty. The Joint Undertaking is to be a Community body, and its balance sheet will fall under Article 185 of Council Regulation 1605/2002/EC, Euratom. It will therefore have to take account of the fact that, through its very nature, this initiative involves public-private partnerships with a large private-sector contribution at least equal to that of the public sector. |

7.   Membership

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| 7.1 | The founding members of the Joint Undertaking are:   |  |  | | --- | --- | | a) | the European Community represented by the Commission; |  |  |  | | --- | --- | | b) | the European Fuel Cell and Hydrogen Joint Technology Initiative Industry Grouping. | |

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| 7.2 | A research grouping, representing non-profit research organisations, may become a member, after the establishment of the Joint Undertaking, provided an entity to represent the research community has been established. |

8.   Funding

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| 8.1 | The running costs of the Joint Undertaking, explained in detail in Article 5 of the regulation, will be covered in equal parts by the founding members. |

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| 8.2 | The operational costs for RTD&D will be jointly funded through the financial contribution of the Community and through in-kind contributions from the private legal entities participating in the activities. Their contribution from private legal entities should correspond to an amount at least equal to the Community's contributions. |

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| 8.3 | The maximum Community contribution to the running costs and operational costs of the Joint Undertaking will be EUR 470 million. The EESC considers that this sum could have been higher given the significance of the research to which this JTI is devoted. Moreover, the running costs are estimated not to exceed EUR 20 million. The contributions will come from the ‘Cooperation’ Specific Programme implementing the Seventh Framework Programme for research, technological development and demonstration, according to the provisions of Article 54(2)(b) of Regulation (EC, Euratom) No 1605/2002. |

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| 8.4 | If a research grouping is established (see point 7.2), it will contribute one twelfth of the running costs, in which case the Commission contribution will decrease correspondingly. |

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| 8.5 | Unless funding is provided after 2013 (when FP7 ends), only projects for which a grant agreement has been signed at the latest by 31 December 2013 will continue in the years 2014-2017. |

9.   General comments

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| 9.1 | The EESC supports the decision to create the Fuel Cells and Hydrogen Joint Undertaking and endorses the related proposal for a regulation COM(2007) 572 final. The EESC particularly highlights the importance for the EU of the strategy proposed with regard to investment and research coordination which, with regard to this JTI, can lead to greater diversity in the energy mix, especially when it comes to the transport sector[(6)](#ntr6-C_2008204EN.01001901-E0006). |

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| 9.2 | As the Committee has already stated in opinions on other regulations arising from Council Decision 971/2006/EC concerning the Specific Programme ‘Cooperation’, it believes that relaunching investment in R&D is an appropriate way of giving businesses a stable frame of reference that makes it possible to overcome the current fragmentation of Community financing and prevents programmes from being too widely scattered. |

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| 9.3 | Since the outset, and as evidenced in numerous opinions, the EESC has been strongly in favour of an ever-greater commitment from the EU towards R&D. Although it is not possible to cite every reference, it is worth mentioning the two most recent opinions on this subject, adopted by a large majority at the EESC's plenary session of 24 and 25 October, relating to the Clean Sky and ENIAC Joint Undertakings. |

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| 9.4 | In general terms: in its opinion[(7)](#ntr7-C_2008204EN.01001901-E0007) on the Green Paper on The European Research Area: New Perspectives, the EESC states that it ‘supports the objective of creating world-class science and technology infrastructure, but this must be backed up by long-term, reliable funding,’ noting that‘the success and purpose of this investment is contingent on the involvement of the relevant institutes and university groups in the Member States being involved, and on committed participation of industry in technology projects.’ |

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| 9.5 | In specific terms: in its opinion[(8)](#ntr8-C_2008204EN.01001901-E0008) on the Communication from the Commission to the Council and the European Parliament — Biofuels Progress Report — Report on the progress made in the use of biofuels and other renewable fuels, the EESC strongly supported the development of research programmes relating to the subject covered by the present regulation. |

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| 9.5.1 | In the opinion, the EESC stated that it ‘believes that particular attention should focus on research in the biofuels sector, especially for second-generation fuels, without sacrificing other possibilities such as those produced by the development of solar hydrogen or biomass processing.’ |

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| 9.5.2 | The EESC went on to point out that ‘In spite of the recent development of research geared to producing hydrogen from biomass, sometimes with the use of biotechnologies or renewable sources, the potential widespread use and marketing of hydrogen-fuelled cars is also determined by the high cost of the fuel cells’, and declared that‘For hydrogen to become an economically practicable alternative energy source, production costs must be brought down .’The Committee then stated that it ‘believes support should be given to research into biofuel cell technologies, i.e. biofuel cells that use biocatalysts to convert chemical energy into electricity’. |

10.   Specific comments

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| 10.1 | In the light of the multiple, composite financing system that has been set up and of the significant volume of Community resources involved, the EESC believes that it would be appropriate to better define the use and allocation of the end products of the research in question. To this end, the issue of patents and intellectual property — as defined in Article 17 of the proposed regulation and Article 1.24 of the Statutes of the Joint Undertaking appended thereto, which limit themselves to setting out principles — ought to be more precise and more explicit, lest it become a sticking point in the implementation and running of the Fuel Cells and Hydrogen JTI. This shortcoming had already been pointed out by the EESC in its opinions on the creation of the IMI and Clean Sky Joint Undertakings. In this JTI, this shortcoming could prove even more sensitive, insofar as the end product resulting from the research will interest rival companies on the market, particularly car manufacturers, many of which will be part of the joint undertaking. In this regard, because of the significant Community funding, it would be appropriate to consider mechanisms that promote a return on European investment or, at least, for this concern to be reflected in the document under consideration. |

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| 10.2 | As stated under point 5.2, JTIs arise out of the former European Technology Platforms (ETPs). However, the latter did not always achieve their stated aim of strategically relaunching research in Europe. The creation of JTIs is based in particular on any difficulties encountered by the ETPs, whose role was essentially to make a key contribution to industry in the area of competitiveness. |

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| 10.2.1 | In the light of this, the EESC regrets the absence from the Commission proposal of a more detailed outline of the work previously carried out by the European Technology Platforms (ETPs); there is no assessment, the results are not mentioned, and there are no bibliographical references. A serious assessment with the aim of pinpointing the reasons for any difficulties encountered by the ETPs would have helped to prevent difficulties in the new initiative. |

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| 10.3 | To achieve the aims of the Fuel Cells and Hydrogen JTI and maximise the potential that this new instrument offers, the EESC considers the following to be necessary:   |  |  | | --- | --- | | — | a genuine simplification of procedures, not least because of the negative impact that red tape has had on previous R&D programmes. Moreover, the EESC highlights the need for all parties to participate in selecting the objectives and analysing the final results; |  |  |  | | --- | --- | | — | a wide-ranging information programme on the opportunities provided by the ITC, inter alia on its ability to mobilise the necessary economic resources in the light of the new forms of financing; |  |  |  | | --- | --- | | — | the establishment of appropriate vocational training programmes to create a highly-skilled workforce with the knowledge needed for the R&D supported by this Joint Undertaking; this knowledge being highly strategic for the EU's industrial future. These high-level qualifications will provide the technical skills needed for the R&D jobs that will be created, will serve to slow the brain drain, and will provide one of the necessary conditions for ensuring leadership in these sectors, which are of strategic importance from both an industrial and an environmental perspective. | |

Brussels, 12 March 2008.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

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