‘Green’ EU budget to pump more money into brownfields

Brownfield industry 2_small.jpg

This article is part of our special report Industrial revival.

SPECIAL REPORT / The EU's new regional funds for 2014-2020 will see more money allocated to the regeneration of brownfield sites, helping old industrial areas generate new economic activity.

 

The European Parliament's regional committee adopted its position last week in a draft EU regulation that will govern how regional policy money will be allocated under the bloc's upcoming budget for 2014-2020.

The new draft budget rules, which still needs approval from the 27 EU member states, sees a 5% increase in funds allocated for “integrated actions for sustainable urban development”.

This heading includes the recovery of brownfield sites, meaning more EU funding will be made available to regenerate them.

At least 5% of the resources allocated nationally through the European Regional Development Fund – or ERDF, which is part of the cohesion funds and is aimed at helping regions develop – should be allotted for this purpose, according to the draft regulation.

The ERDF “may” also support innovative actions for sustainable urban development, subject to a ceiling of 0.2% of the total annual ERDF allocation. These could include studies and pilot projects to identify or test new solutions to issues relating to sustainable urban development, the new draft regulation says.

Funds secured

Data on the redevelopment of brownfields are patchy and hardly comparable, reflecting the lack of a common definition of the problem across Europe, according to the Copenhagen-based European Environment Agency (EAA).

The regeneration of these sites falls under the urban development actions funded by ERDF funds. 

Member states, during early negotiations with the former Danish presidency of the EU, supported this measure, which was initially proposed by the European Commission in June 2011. 

The agreement between the European Commission, Council and Parliament on this point should protect the money from horse-trading in the negotiations over the future cohesion policy, which the three EU institutions are expected to conclude before the end of the year.

Fit for 2020 goals

The extra money allotted for the revival of brownfields is part of the Europe 2020 goals to support economic growth, create jobs and preserve the environment.  

In its 2014-2020 budget proposals tabled last year, the European Commission asked for €336 billion to be injected into the bloc's regions over the next seven years.

Rejuvenating brownfield sites – which have been previously used for military, mining, industrial or commercial purposes and are now often beset by soil and water contamination – falls under the umbrella of 'green' and innovate solutions for economic growth. Empty brownfield sites, if rehabilitated, could create jobs for the nearby communities, improve the environment and promote innovation, the Commission believes.

However, it is not yet clear yet how much money will be allotted to the ERDF this year, making it uncertain how much will become available under the 5% increase. In fact, member states have not yet put any numbers on the table as the future EU budget is still being negotiated.

The Commission and Parliament have asked for the ERDF to receive at least the same amount as in the current budget (2007-2013). But member states that are net contributors to the EU budget have tried to slim down the overall figure.

'Channelled' spending

The new draft cohesion policy regulation lays down precise rules on how regional money can be spent.

Under the draft, richer regions have to spend 80% of the ERDF funds on 10 investment priorities whilst poorer regions will have to spend 60% on the same priorities.  This means that the amounts member states can use is somewhat regulated.

Additionally, richer regions have to spend at least 22% of the ERDF funds on projects supporting low-carbon technologies and solutions, whilst poorer regions have to spend only around 15% of the ERDF for the same purpose.

"These investment priorities are all supporting more or less the recovery of brownfield sites," said Markus Trilling of Friends of the Earth Europe and CEE Bankwatch. The environmental activist believes, however, that the amount of money allotted through the ERDF is insufficient.

It is "a drop in the ocean for how much is needed to get the regions on track," he said. "But at least we want to make sure they don't spend the money on gas pipelines."

The new EU funds regulation could start a new era for how money is spent on brownfield sites regeneration.  But eventually, it will be up to member states to decide on how to allocate this 'thematic concentration' of money to specific projects.

Trilling said "95% will stay the same. It's not a new era, unless member states decide so. But now they have more of this option."

"The European Commission is now going in the right direction,” he said. “But member states have to map first how many sites are worth regenerating in their country and then start reserving EU money for this".

MEP Reinhard Bütikofer, speaker of the German Greens in the European Parliament, said:

“In the context of the relationship between the economy and the environment, one of my favourite quotes is there is no such thing as a free lunch. [But] we are treating the environment as if there were. So let's put a price on CO2 and then, by creating that framework condition, let's let the industries compete over being more energy efficient.”

“As a party, we want to highlight that to stop soil deterioration has a positive economic impact. Some people think developing brownfield land is a costly business and that it is cheaper to use virgin land. The European Environmental Bureau and Deutscher Naturschutzring [the German League for Nature Conservation and Environmental Protection] did a recent study which found that soil deterioration costs Europe €38 billion. The cost of not developing brownfield sites should also be taken into account.”

The European Commission presented on 29 June 2011 its proposals for the EU's next seven-year budget for 2014-2020 – the so-called Multi-Annual Financial Framework.

The Commission proposed raising the next budget to €1.025 trillion, up from the current €976 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.

Cohesion policy is the second biggest envelope in the EU's multi-annual budget, after the Common Agricultural Policy. The European Commission asked for €336 billion for cohesion spending in the next budget.

  • 24 July: General Affairs Council to discuss the next Multi-annual Financial Framework;
  • 30 August: Informal GAC to discuss MFF;
  • September: Cyprus Presidency will “test some figures"
  • 18-19 October: EU summit to discuss MFF
  • 13 December: EU summit to reach agreement on MFF.
  • 31 Dec. 2012: Negotiations on the EU's next seven-year budget expected to wrap up
  • 1 Jan. 2013: Ireland takes over presidency of the EU

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