The draft paper is member states' response to a European Commission proposal to finance the Strategic Energy Technology (SET) plan, presented in October last year (EurActiv 07/10/09).
The plan called for the EU's energy research budget to be increased by €50 billion over the next ten years, requiring yearly public and private investment to almost triple.
The paper stresses that "given the scale of the funding required for the medium term, an increase in the proportion of public investment at EU level will be needed, which should therefore be given due consideration in the next Financial Framework".
Nevertheless, the conclusions state that the level of EU funding should depend on member states' interest in co-financing the European Industrial Initiatives (EIIs) that were set up for different technologies under the SET Plan. It specifically mentions that sovereignty over national research funding must be preserved in joint programmes.
The response follows the Commission's line on harnessing existing EU programmes to develop clean technologies rather than create new instruments. Member states are therefore asking the EU executive to investigate how they can provide a "more predictable and stable framework to industry and private sector investors".
Moreover, they call on the Commission and the European Investment Bank to present as soon as possible "a proposal for an instrument to finance renewable energy and energy efficiency projects". This would, however, only involve existing financial sources in "an optimal combination".
The paper encourages national public authorities to offer incentives to promote the SET Plan objectives, "and, if necessary, to significantly increase the public funding of low-carbon technology development".
"Delegations are for the moment just making general comments," said a spokesperson at the EU Council of Ministers.
"Finance is a very sensitive issue," she said, adding that it would eventually be decided at ministerial level.
EU negotiations on energy financing tend to be protracted when the interests of 27 member states come into play. This became evident when allocating money to energy projects under the European Economic Recovery Plan (EERP), first proposed by the Commission in January 2009.
After much wrangling between member states over priorities, European leaders approved the plan in March 2009. But it took until December to approve eligible offshore wind and CCS projects, while infrastructure projects were left for the next energy commissioner to approve (EurActiv 10/12/09).
Spain, which holds the EU's rotating presidency, hopes to discuss SET Plan financing at the March European Council.