Supported from the ERDF (Investment for jobs and growth goal), ESF+, the Cohesion Fund, the JTF and the EMFAF – Article 21(3)
CCI
2021IE16RFPR002
Title in English
Southern, Eastern and Midland Regional Programme 2021–2027
GA – Clár Réigiúnach an Deiscirt, an Oirthir agus Lár na Tíre 2021– 2027
Title in national language(s)
Version
1.1
First year
2021
Last year
2027
Eligible from
01-Jan-2021
Eligible until
31-Dec-2029
Commission decision number
C(2022)8481
Commission decision date
18-Nov-2022
IE05 - Southern IE051 - Mid-West IE052 - South-East IE053 - South-West IE06 - Eastern and Midland IE061 - Dublin
NUTS regions covered by the programme
IE062 - Mid-East IE063 - Midland
Fund(s) concerned
ERDF
under Investment for jobs and growth goal for the outermost regions only
Programme
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Table of Contents Environmental and Do No Significant Harm (DNSH) Statement ................................................................... 5 1. Programme strategy: main challenges and policy responses ................................................................... 7 Table 1...................................................................................................................................................... 15 2. Priorities ................................................................................................................................................... 18 2.1. Priorities other than technical assistance......................................................................................... 18 2.1.1. Priority: SEM1. Smarter and More Competitive Regions .......................................................... 18 2.1.1.1. Specific objective: RSO1.1. Developing and enhancing research and innovation capacities and the uptake of advanced technologies (ERDF)........................................................................... 18 2.1.1.1.1. Interventions of the Funds .............................................................................................. 18 The related types of actions – point (d)(i) of Article 22(3) CPR and Article 6 ESF+ Regulation: . 18 The main target groups - point (d)(iii) of Article 22(3) CPR: ........................................................ 19 Actions safeguarding equality, inclusion and non-discrimination – point (d)(iv) of Article 22(3) CPR and Article 6 ESF+ Regulation............................................................................................... 19 Indication of the specific territories targeted, including the planned use of territorial tools – point (d)(v) of Article 22(3) CPR ................................................................................................... 20 The interregional, cross-border and transnational actions – point (d)(vi) of Article 22(3) CPR.. 20 The planned use of financial instruments – point (d)(vii) of Article 22(3) CPR ........................... 20 2.1.1.1.2. Indicators ......................................................................................................................... 21 Table 2: Output indicators ........................................................................................................... 21 Table 3: Result indicators............................................................................................................. 21 2.1.1.1.3. Indicative breakdown of the programmed resources (EU) by type of intervention....... 22 Table 4: Dimension 1 - intervention field .................................................................................... 22 Table 5: Dimension 2 - form of financing .................................................................................... 22 Table 6: Dimension 3 – territorial delivery mechanism and territorial focus ............................. 22 Table 7: Dimension 6 – ESF+ secondary themes ......................................................................... 22 Table 8: Dimension 7 – ESF+*, ERDF, Cohesion Fund and JTF gender equality dimension ........ 22 2.1.1.1. Specific objective: RSO1.3. Enhancing sustainable growth and competitiveness of SMEs and job creation in SMEs, including by productive investments (ERDF)......................................... 23 2.1.1.1.1. Interventions of the Funds .............................................................................................. 23 The related types of actions – point (d)(i) of Article 22(3) CPR and Article 6 ESF+ Regulation: . 23 The main target groups - point (d)(iii) of Article 22(3) CPR: ........................................................ 24 Actions safeguarding equality, inclusion and non-discrimination – point (d)(iv) of Article 22(3) CPR and Article 6 ESF+ Regulation............................................................................................... 24 Indication of the specific territories targeted, including the planned use of territorial tools – point (d)(v) of Article 22(3) CPR ................................................................................................... 24 The interregional, cross-border and transnational actions – point (d)(vi) of Article 22(3) CPR.. 25 The planned use of financial instruments – point (d)(vii) of Article 22(3) CPR ........................... 25 2.1.1.1.2. Indicators ......................................................................................................................... 26 Table 2: Output indicators ........................................................................................................... 26 Table 3: Result indicators............................................................................................................. 26 2.1.1.1.3. Indicative breakdown of the programmed resources (EU) by type of intervention....... 26 Table 4: Dimension 1 - intervention field .................................................................................... 26 Table 5: Dimension 2 - form of financing .................................................................................... 26 Table 6: Dimension 3 – territorial delivery mechanism and territorial focus ............................. 27 Table 7: Dimension 6 – ESF+ secondary themes ......................................................................... 27 Table 8: Dimension 7 – ESF+*, ERDF, Cohesion Fund and JTF gender equality dimension ........ 27 2.1.1. Priority: SEM2. Low-Carbon Energy Efficient Regions ............................................................... 28
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2.1.1.1. Specific objective: RSO2.1. Promoting energy efficiency and reducing greenhouse gas emissions (ERDF).............................................................................................................................. 28 2.1.1.1.1. Interventions of the Funds .............................................................................................. 28 The related types of actions – point (d)(i) of Article 22(3) CPR and Article 6 ESF+ Regulation: . 28 The main target groups - point (d)(iii) of Article 22(3) CPR: ........................................................ 29 Actions safeguarding equality, inclusion and non-discrimination – point (d)(iv) of Article 22(3) CPR and Article 6 ESF+ Regulation............................................................................................... 29 Indication of the specific territories targeted, including the planned use of territorial tools – point (d)(v) of Article 22(3) CPR ................................................................................................... 29 The interregional, cross-border and transnational actions – point (d)(vi) of Article 22(3) CPR.. 29 The planned use of financial instruments – point (d)(vii) of Article 22(3) CPR ........................... 29 2.1.1.1.2. Indicators ......................................................................................................................... 30 Table 2: Output indicators ........................................................................................................... 30 Table 3: Result indicators............................................................................................................. 30 2.1.1.1.3. Indicative breakdown of the programmed resources (EU) by type of intervention....... 30 Table 4: Dimension 1 - intervention field .................................................................................... 30 Table 5: Dimension 2 - form of financing .................................................................................... 30 Table 6: Dimension 3 – territorial delivery mechanism and territorial focus ............................. 31 Table 7: Dimension 6 – ESF+ secondary themes ......................................................................... 31 Table 8: Dimension 7 – ESF+*, ERDF, Cohesion Fund and JTF gender equality dimension ........ 31 2.1.1. Priority: SEM3. Sustainable and Integrated Urban Development............................................. 32 2.1.1.1. Specific objective: RSO5.1. Fostering the integrated and inclusive social, economic and environmental development, culture, natural heritage, sustainable tourism, and security in urban areas (ERDF) ..................................................................................................................................... 32 2.1.1.1.1. Interventions of the Funds .............................................................................................. 32 The related types of actions – point (d)(i) of Article 22(3) CPR and Article 6 ESF+ Regulation: . 32 The main target groups - point (d)(iii) of Article 22(3) CPR: ........................................................ 33 Actions safeguarding equality, inclusion and non-discrimination – point (d)(iv) of Article 22(3) CPR and Article 6 ESF+ Regulation............................................................................................... 33 Indication of the specific territories targeted, including the planned use of territorial tools – point (d)(v) of Article 22(3) CPR ................................................................................................... 33 The interregional, cross-border and transnational actions – point (d)(vi) of Article 22(3) CPR.. 33 The planned use of financial instruments – point (d)(vii) of Article 22(3) CPR ........................... 33 2.1.1.1.2. Indicators ......................................................................................................................... 34 Table 2: Output indicators ........................................................................................................... 34 Table 3: Result indicators............................................................................................................. 34 2.1.1.1.3. Indicative breakdown of the programmed resources (EU) by type of intervention....... 34 Table 4: Dimension 1 - intervention field .................................................................................... 34 Table 5: Dimension 2 - form of financing .................................................................................... 35 Table 6: Dimension 3 – territorial delivery mechanism and territorial focus ............................. 35 Table 7: Dimension 6 – ESF+ secondary themes ......................................................................... 35 Table 8: Dimension 7 – ESF+*, ERDF, Cohesion Fund and JTF gender equality dimension ........ 35 2.2. Technical assistance priorities .......................................................................................................... 36 3. Financing plan .......................................................................................................................................... 37 3.1. Transfers and contributions (1) ........................................................................................................ 37 Table 15A: Contributions to InvestEU* (breakdown by year) ......................................................... 37 Table 15B: Contributions to InvestEU* (summary) ......................................................................... 37 Justification, taking into account how those amounts contribute to the achievement of policy objectives selected in the programme in accordance with Article 10(1) of the InvestEU Regulation .......................................................................................................................................................... 37 Table 16A: Transfers to instruments under direct or indirect management (breakdown by year) 37 Table 16B: Transfers to instruments under direct or indirect management* (summary).............. 38
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Transfers to instruments under direct or indirect management - Justification.............................. 38 Table 17A: Transfers between ERDF, ESF+ and Cohesion Fund or to another Fund or Funds* (breakdown by year) ........................................................................................................................ 38 Table 17B: Transfers between ERDF, ESF+ and Cohesion Fund or to another Fund or Funds (summary) ........................................................................................................................................ 38 Transfers between shared management funds, including between cohesion policy funds - Justification ...................................................................................................................................... 38 3.2. JTF: allocation in the programme and transfers (1) ......................................................................... 39 3.3. Transfers between categories of region resulting from the mid-term review................................. 39 Table 19A: Transfers between categories of region resulting from the mid-term review within the programme (breakdown by year).................................................................................................... 39 Table 19B: Transfers between categories of region resulting from the mid-term review, to other programmes (breakdown by year) .................................................................................................. 39 3.4. Transfers back (1).............................................................................................................................. 39 Table 20A: Transfers back (breakdown by year) ............................................................................. 39 Table 20B: Transfers back* (summary)............................................................................................ 39 3.5. Financial appropriations by year....................................................................................................... 40 Table 10: Financial appropriations by year...................................................................................... 40 3.6. Total financial appropriations by fund and national co-financing.................................................... 41 Table 11: Total financial allocations by fund and national contribution......................................... 41 4. Enabling conditions.................................................................................................................................. 42 5. Programme authorities ............................................................................................................................ 60 Table 13: Programme authorities ............................................................................................................ 60 The repartition of the reimbursed amounts for technical assistance pursuant to Article 36(5) CPR if more bodies are identified to receive payments from the Commission................................................. 60 6. Partnership............................................................................................................................................... 61 7. Communication and visibility................................................................................................................... 64 8. Use of unit costs, lump sums, flat rates and financing not linked to costs ............................................. 66 Table 14: Use of unit costs, lump sums, flat rates and financing not linked to costs ............................. 66 Appendix 1: Union contribution based on unit costs, lump sums and flat rates ........................................ 67 A. Summary of the main elements .......................................................................................................... 67 B. Details by type of operation ................................................................................................................ 67 C. Calculation of the standard scale of unit costs, lump sums or flat rates ............................................ 67 1. Source of data used to calculate the standard scale of unit costs, lump sums or flat rates (who produced, collected and recorded the data, where the data is stored, cut-off dates, validation, etc.). 67 2. Please specify why the proposed method and calculation based on Article 94(2) CPR is relevant to the type of operation. .............................................................................................................................. 67 3. Please specify how the calculations were made, in particular including any assumptions made in terms of quality or quantities. Where relevant, statistical evidence and benchmarks should be used and, if requested, provided in a format that is usable by the Commission. ........................................... 67 4. Please explain how you have ensured that only eligible expenditure was included in the calculation of the standard scale of unit cost, lump sum or flat rate. ....................................................................... 67 5. Assessment of the audit authority(ies) of the calculation methodology and amounts and the arrangements to ensure the verification, quality, collection and storage of data.................................. 67 Appendix 2: Union contribution based on financing not linked to costs .................................................... 68 A. Summary of the main elements .......................................................................................................... 68 B. Details by type of operation ................................................................................................................ 68 Appendix 3: List of planned operations of strategic importance with a timetable..................................... 68 DOCUMENTS ................................................................................................... Error! Bookmark not defined.
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Environmental and Do No Significant Harm (DNSH) Statement The programme area has a wealth of environmental assets from Ireland’s highest mountains, dramatic coastlines, and remote rural areas to fertile agricultural landscapes. Our rich urban environment includes a strong and historic network of cities, towns and villages. These have associated flora, fauna, biodiversity and cultural heritage assets, many of which are protected through European and National legislation, including Special Areas of Conservation, Special Protection Areas, Natural Heritage Areas and Proposed Natural Heritage Areas. The Programme includes environmental assessment documents, on Strategic Environmental Assessment (SEA), an Appropriate Assessment (AA) and a Strategic Flood Risk Appraisal Screening (SFRA). Reflecting the importance of tackling climate change in line with the Union’s commitments to implement the Paris Agreement and the United Nations Sustainable Development Goals, the programme will contribute to mainstreaming climate actions and to support activities that would respect the climate and environmental standards and priorities of the Union and would Do No Significant Harm (DNSH) to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council. To ensure compliance with the requirements for DNSH the programme will endeavour to support projects and activities that protect biodiversity, water, air & land quality, and marine resources, that encourages circular economy initiatives that reduce waste and increases recycling and that reduce greenhouse gas emissions. At the project level, all applications for development consents for projects emanating from any policies that may give rise to likely significant effects on the environment will need to be accompanied by one or more of the following, as relevant: Ecological Impact Assessment Report (EcIA); Environmental Report; Environmental Impact Assessment Report - if necessary, under the relevant legislation; Natura Impact Statement - if necessary, under the relevant legislation. Environmental Assessment (a) Any reference to support for all plans, projects, activities and development in the Programme should be considered to refer to ‘environmentally sustainable development’ that has no adverse effects on the integrity of European sites and no net loss of biodiversity, that shall be subject to appropriate feasibility studies, best practice site/route selection (to consider environmental constraints such as landscape, cultural heritage, the protection of water quality, flood risks and biodiversity as a minimum), environmental assessment including EcIA to support development management and where required, the completion of statutory SEA, EIA and AA processes as appropriate (b) The Programme seeks to protect, manage, and through enhanced ecological connectivity, improve the coherence of the Natura 2000 Network in the Region. (c) Support for other plans/ programmes (and initiatives arising) is based on appropriate SEA, SFRA, EIA and AA processes being undertaken to ensure the avoidance of adverse effects on European Sites and ensure implementation of mitigation measures where required. (d) The Programme supports relevant development proposals that aim to protect of inland surface waters, transitional waters, coastal waters and groundwater, preventing pollution, further deterioration of water quality, promotes sustainable water use and enhances improvement of the aquatic environment. (e) Any planning consent process emanating from support through the programme will ensure compliance with the EU’s Waste Framework Directive and EU Action Plan for the Circular Economy as such projects will be subject to: i. the objectives of City and County Development Plans and Local Area Plans supporting the circular economy and prioritizing waste prevention followed by re-use, recycling and recovery before landfill; ii. adhere to Best Practice Guidelines on the Preparation of Waste Management Plans for Construction and Demolition Projects published by the Department of Housing Local Government and Heritage and any updated guidelines and
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iii. adhere to the new National Waste Management Plan for a Circular Economy (NWMPCE), which will replace the Southern Region Waste Management Plan 2015-2021 and the Eastern and Midland Waste Management Plan 2015-2021. Thereby, minimising the use of natural resource inputs, reducing waste, pollution and carbon emissions and improving the productivity of resources used in development through extending the life span of materials and facilitating the repurposing, recycling and re-use of these resources at end of life.
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1. Programme strategy: main challenges and policy responses Reference: points (a)(i) to (viii) and point (a)(x) of Article 22(3) and point (b) of Article 22(3) of Regulation (EU) 2021/1060 (CPR) INTRODUCTION The Southern, Eastern and Midland Regional Programme 2021-2027 [‘the Programme’] is an ERDF co-funded investment programme that supports balanced regional development across two of the three NUTS2 regions of Ireland, the Southern Region and the Eastern and Midland Region. The two regions comprise eighteen counties and include the four metropolitan city areas of Dublin, Cork, Waterford and Limerick-Shannon, the regional growth centres of Athlone in the Midlands and Drogheda-Dundalk-Newry on the Dublin-Belfast corridor, a network of twenty-five key towns and an extensive rural hinterland. This €663 million co-funded programme of investment is supported by €265 million of EU funding and €398 million of national funding provided by the Government of Ireland. The Programme assists the Government’s aim of promoting balanced regional development by supporting the implementation of the Regional Economic and Spatial Strategies in each of the two regions in the programme area and is focused on the following key strategic outcomes: Developing Smarter More Competitive Regions by building RD&I capacity within the public research institutions in our regions, by accelerating the translation of cutting-edge research into commercial applications at a regional level, by supporting innovation diffusion and by strengthening regional innovation ecosystems in line with Ireland's Smart Specialisation Strategy and the Regional Enterprise Plans. Creating Greener More Energy Efficient Regions and a Just Transition by focusing on scaling up investment in actions that improve the energy efficiency of residential homes while targeting homeowners in, or at risk of, energy poverty. Supporting Sustainable Urban Development in our Regions by taking an integrated strategic approach to the regeneration of our towns using a Town Centres First Framework. PROGRAMME DEVELOPMENT The key challenges and future ambitions for the programme area are clearly articulated in the Regional Spatial and Economic Strategy for the Southern Region (2020) and the Regional Spatial and Economic Strategy for the Eastern and Midland Region (2019) [‘the RSES’]. The RSES are strategic plans and investment frameworks to shape the future development of Ireland’s regions to 2031 and beyond. The making of each RSES required detailed research and an extensive public and stakeholder consultation process. The RSES are informed by Project Ireland 2040 – the National Planning Framework and the National Development Plan – and by economic and other relevant policies of the government, including climate change plans and the ten-year capital investment plan. The Programme supports the implementation of each RSES, taking into account lessons learnt from past experience, the Country Reports (CR2019, CR2020), an independent Needs Analysis for ERDF and ESF+ Funding (2020), the National Recovery and Resilience Plan (NRRP2021), the National Development Plan Review (NDP2021), public consultations, and a wide range of national and EU reports and policy documents. There is a particular focus on aligning the Programme with other EU, national and private sector actions and investment under Ireland’s Climate Action Plan (2021), Smart Specialisation Strategy (2022), and Town Centre First – a Policy Approach for Irish Towns (2022). The Programme is framed by EU policy objectives, the thematic concentration and climate change contribution requirements set out in the regulations, the opportunity to complement other EU, national and regional investments and the limited amount of ERDF funding available relative to the scale of the challenges in the regions. In this respect, the Programme seeks to avoid competing with other public or private investment and focuses instead on key challenges and investment needs where ERDF can make a strong and visible impact to the benefit of the regions and their citizens. The Programme focuses on three selected Policy Objectives and has been structured under three priorities to reflect this.
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Priority 1: SMARTER AND MORE COMPETITIVE REGIONS The vision set out in Ireland’s Smart Specialisation Strategy (2022) [‘S3’] is to “embrace a regional approach to addressing Ireland’s Research, Development and Innovation (RD&I) challenges and to “provide a ‘bridge’ between regional and national innovation strategy building and decision making, bringing coherence to RD&I planning for the benefit of enterprise and advancing the RD&I agenda regionally and nationally”. The vision for the Southern Region – to become one of Europe’s most creative, innovative, greenest and liveable regions – and the vision for the Eastern and Midland Region – the creation of a sustainable and competitive region that supports the health and wellbeing of people and places – are set out in the RSES for the Southern Region (2020) and the RSES for the Eastern and Midland Region (2019) respectively. Each RSES includes high level strategic objectives and Regional Policy Objectives (RPOs) consistent with the five specific objectives for the ERDF under policy objective 1 [‘PO1’] “a more competitive and smarter Europe by promoting innovative and smart economic transformation and regional ICT connectivity”. The RSES for the Southern Region sets out an economic vision for the region based on “five economic principles of smart specialisation, clustering, placemaking for enterprise development, knowledge diffusion, and capacity building”. The RSES for the Eastern and Midland Region’s preferred economic strategy promotes “smart specialisation strategies based on identified strengths and competitive advantages, combined with cluster policies that promote economies of scale and network effects in certain locations. The strategy should also support diversification of local economies and development of innovation and entrepreneurial ecosystems for sustained national growth that can withstand external shocks”. A key factor to ensuring sustainable economic development is the degree to which a region’s enterprise base can remain competitive and productive, with CR2019 and CR2020 noting that differences in regional competitiveness in Ireland are sizeable and that significant productivity gaps remain between lagging domestic firms and highly productive multinational companies. While both regions in the programme area are assigned to the second strongest innovation group in the Regional Innovation Scoreboard 2021 - the Strong Innovators, this can hide underperformance and regional imbalances both within and between the two regions. The Eastern and Midland Region continues to perform above both the State and EU average, with index scores of 102.2 and 110.5 respectively. Despite this, the region’s RIS index score has decreased in both absolute and relative terms since 2011. The Southern Region has the lowest real growth rate of regional Gross Value Added (GVA) and total business expenditure on R&I amounted to €489 per head of population in 2019, below the State average of €662 (Central Statistics Office). From a labour market perspective, a total of 6,242 people were engaged as R&I staff – in the private sector – in the Southern Region in 2019, accounting for 0.79% of the region’s labour force (Q4, 2019), which was the lowest ratio out of the three NUTS 2 regions of Ireland and below the State average of 1.12%. According to the Regional Competitiveness Index (RCI) 2019, the Southern Region was ranked the 129th most competitive region out of 268 regions in the EU, with the region underperforming with respect to infrastructure and market size, and – to a lesser extent – labour market efficiency and innovation. Interlinked to the region’s competitiveness performance is the underlying challenge of lagging productivity levels in domestic SMEs in Ireland – as documented in the Country Reports, with the enterprise base of the region very reliant on these types of enterprises. As of 2018, 83,596 or 99.7 % of enterprises based in the Southern Region were classified as SMEs, and of the three NUTS 2 Regions, the Southern Region was the most reliant on these types of enterprises. Meanwhile, the Eastern and Midland Region was ranked the 89th most competitive region in the EU, as per the findings of the RCI 2019. In this regard, the region underperforms relative to its peer regions with respect to labour market efficiency and market size. Like the other NUTS 2 Regions, the Eastern and Midland Region enterprise base is also notably reliant on SMEs, with 137,049 or 99.5 % of the region’s enterprises classified as SMEs.
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Relative to the EU average in 2019, the programme area underperforms across the following key innovation indicators which can be addressed by PO1; Trademark applications, Innovative SMEs collaborating with others, Lifelong learning, Non-R&D expenditure business sector, R&D expenditure business sector, Sales of new-to- market and new-to-firm innovations, Design applications, R&D expenditure public sector, and EPO patent applications. The Programme responds to the S3 and to the RSES, together with challenges and policy responses set out in Innovation 2020, the NDP, the National Economic Recovery Plan, Enterprise 2025 Renewed, SME and Entrepreneurship Growth Plan, the National AI Strategy, Industry 4.0 Strategy, Our Rural Future, Science Foundation Ireland Strategy 2025 and the Regional Enterprise Plans.
The programme focuses on addressing the following five key challenges in the programme area under PO1.
(i) RD&I capacity building Technological Universities (TUs) are a part of the changing face of higher education in Ireland. These multi- campus technological universities will drive access, excellence, and regional development, strengthening the links with enterprise and employers in their regions and beyond. The first TU in the country, Technological University Dublin, was established in the programme area in January 2019. It has now been joined by three new TUs in the programme area; Munster Technological University (MTU), established January 2021; Technological University of the Shannon: Midlands Midwest, established October 2021; and South East Technological University, established May 2022. The technological universities have a critical role to play in supporting higher levels of investment, both public and private, in industry-focused research in the regions. This will require significant capacity building. The Programme will focus on strengthening the TUs’ research and innovation offices and the industry gateways that support delivery of collaborative projects. This increased capacity will support far greater engagement with enterprises in the regions, recognizing that collaboration with SMEs in particular will frequently begin through smaller non-financial supports. (ii) Supporting knowledge transfer The S3 consultation emphasized the importance of funding the Technology Transfer Offices (TTOs) in the universities, technological universities and Institutes of Technology in the regions, building on the success of the Technology Transfer Strengthening Initiative (TTSI) that is due to end in 2022. These TTOs support: the increased use of national template agreements to simplify and speed up contracting with higher education institutes, as well as to bring more consistency for companies and innovators; the collection and publication of information on the facilities, equipment and supports available to companies to access within the third level and State- funded research base at national and regional level; the need to orchestrate existing and emerging capacities in regional areas and to raise the profile nationally and internationally; the continuity of industry-academic collaborations beyond a completed project to help companies to bring a project’s innovations to market; and the development of spin out companies. (iii) Accelerating the translation of cutting-edge research into commercial applications The OECD study on SME and Entrepreneurship Policy in Ireland (2019) stated that “Ireland is a successful generator of high-growth firms and its SMEs are innovative. Attitudes toward entrepreneurship are also positive overall. However, business dynamism and the start-up rate are relatively low, Irish SMEs are not very active in international markets, and SME productivity growth is stagnant. Approaches are also needed to connect SMEs and entrepreneurs in remote regions with broader entrepreneurship ecosystems in urban centres and larger cities”. Science Foundation Ireland’s 2025 strategy recognizes that the human capital, innovation and technology created by SFI-funded research must be transferred effectively to the domestic SME sector. The Programme will support SFI’s new strategy to help boost the productivity of domestically owned enterprises by focusing on building partnerships and connections between SMEs and Higher Education Institutions in the regions. This will be done through knowledge exchange, through formal technology licensing, through new SME supports, through spinning out new companies, and through working with Enterprise Ireland, the Institutes of Technology, the universities and the new technological universities. One of SFI’s KPIs is the creation of a ‘unicorn’ company (value > €1bn) by 2025. This ambitious target sets the bar for what SFI believes can be achieved from its funded research.
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(iv) Driving the development of skills needed for ‘needs led’ innovation in the regions Smart Specialisation in our regions will drive the development of skills needed for enhancing innovation activity across the regional economies. This will be achieved in the programme area through new and enhanced supports based on creating the necessary skills for ‘needs led’ innovation, informed by existing international and national best practice and by our smart specialisation analysis and findings. (v) Strengthening and developing functional regional innovation ecosystems Smart Specialisation in our regions will encourage more regionally dispersed RD&I, strengthen the enterprise base and identify emerging areas of opportunity. This will be achieved by leveraging and building on the analysis of Irish regions’ strengths and emerging areas of opportunity undertaken as part of the development of Ireland’s S3; addressing gaps in existing regional innovation infrastructures and systems by supporting projects aligned with the nine Regional Enterprise Plans (REPs); and seeking out opportunities to enable inter-regional collaboration through structures like the REP national oversight group. These regional challenges are aligned under two of the PO1 specific objectives: developing and enhancing research and innovation capacities and the uptake of advanced technologies (RSO1.1); and enhancing sustainable growth and competitiveness of SMEs and job creation in SMEs, including by productive investments (RSO1.3) Investment needs under the three remaining PO1 specific objectives will be met through other sources of public and private investment. This will include national funding of a wide range of grant supports and financial instruments for SMEs and public research bodies, including for example, the research centres, innovation partnership programme, commercialisation fund and the microenterprise schemes that were ERDF co-financed in 2014-2020. The Programme will complement actions under the NRRP to support the digitalisation of businesses, to drive reforms in regional skills development, digital infrastructure in schools, staff and curriculum development in the technological universities, and to use mission-oriented challenges to incentivise researchers to deliver tangible impact for society in areas such as health, agriculture and climate through a new National Grand Challenges Programme in research. Enterprise Ireland, an Intermediary Body under the Programme, leads the National Support Network for Horizon Europe and as such will provide important opportunities for complementarities between Horizon Europe and ERDF supported actions. The Programme responds to S3 ambitions by strengthening the new TUs to be regional innovation leaders. These TUs have had some success in Horizon Europe but had not had the real capacity needed to compete in this environment or to bring regional actors such as SMEs and TUs together in a meaningful way. This new capacity is designed to address that very issue, the Programme is therefore highly complementary to and synergistic with Horizon Europe ambitions. The Programme will also complement funding and activities under the other CPR funds, Connecting Europe Facility, LIFE programme, InvestEU and other financial instruments managed by the European Investment Bank. This includes activities that support the objectives of the Atlantic Action Plan 2.0. For example, investment in RD&I capacity building in the programme area will support EMFAF investment in research to tackle climate actions, knowledge sharing, development of process innovation to support operational optimisation in the processing sector and research to quantify the potential of coastal habitats as carbon sinks . Actions under PO1 are closely aligned to many of the actions set out under the European Research Area (ERA) policy agenda, in particular Action 15 to Build-Up Regional and National R&I Ecosystems to Improve Regional/National Excellence and Competitiveness, Action 16 to Improve EU-Wide Access to Excellence, and Action 17 to Enhance the Strategic Capacity of Europe’s Public Research Performing Organisations. For example, the focus on strengthening RDI capacity in the TUs will see TUs extend latent research and innovation excellence into their regions (but also nationally and internationally), by working with enterprise actors to create and exploit knowledge in line with the ERA policy agenda.
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Priority 2: LOW-CARBON ENERGY EFFICIENT REGIONS The RSES for the Southern Region (2020) and the RSES for the Eastern and Midland Region (2019) both have climate action and the protection of the environment at their core. Each RSES includes Regional Policy Objectives (RPOs) consistent with the eight specific objectives for the ERDF under policy objective 2 [‘PO2’] “A greener, low- carbon transitioning towards a net zero carbon economy and resilient Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility”. CR2019 and the National Energy & Climate Plan 2021-2030 highlighted that economic growth and GHG emissions had yet to be decoupled, warning that Ireland was falling further behind in decarbonising its economy and the lack of progress would make the challenge of meeting EU obligations more difficult, while also increasing the cost of future action. National projections on GHG indicated that cumulated emissions would be 20 percentage points short of the reduction target. CR2020 reported some progress and acknowledged that the publication of the Climate Action Plan 2019 represented “a much-needed breakthrough and a stepping stone in the transition to a climate neutral and circular economy” but stated that greenhouse emissions in the transport, building and agriculture sectors are high and on a rising trend. It suggested “there is scope for improvement in…reducing greenhouse emissions, increasing the share of renewables, energy efficiency and poverty reduction”. The independent Needs Analysis for ERDF and ESF+ in Ireland (2020) also identified the need to accelerate progress to address climate change objectives and the green economy. Potential for development was identified in various sectors, including investment to enhance the energy efficiency of the building stock, to reduce waste, to promote the circular economy and to reduce the use of private transport, while noting that “this will require a range of policies and a scale of resources outside of the scope of the [ERDF] funds.” The Climate Action and Low Carbon Development (Amendment) Bill 2021 recognizes the scale of the climate challenge and increases the ambition to “support Ireland’s transition to Net Zero and achieve a climate neutral economy by no later than 2050”. The Climate Action Plan 2021 [‘CAP21’] provides a sectoral roadmap for meeting Ireland’s 2050 national climate objective. CAP21 estimates that €125 billion of capital investment (additional and reallocated) in low-carbon technologies and infrastructure will be required in the period 2021 to 2030. This includes investment of €51 billion in transport and €35 billion in buildings. The largest incremental increases are foreseen in buildings (75%), energy (50%) and agriculture (50%). CAP21 identifies significant public investment under the NDP, complemented by investment under the NRRP, the EU Just Transition Fund (JTF) and the ERDF but notes that relying solely on public funding “is neither affordable nor adequate to the scale of the challenge to be addressed” and identifies a role for private investment, regulation and taxation policy. The scale of the investment required to meet climate action ambitions in the programme area is reflected in the decision to focus programme resources on one specific objective – promoting energy efficiency and reducing greenhouse gas emissions (RSO2.1) – rather than attempting to spread the investment over multiple specific objectives. Simply put, while there are many other investment needs in the programme area under PO2, these will have to be met by other sources of public and private investment. CAP21 identifies some of the other sources of investment that will support investment needs under PO2. Measures in the energy area, including those envisaged under RSO2.2 and RSO2.3, will be financed “through a variety of mechanisms in combination with private investment: direct Exchequer capital supports; displacing fossil fuel imports; the Public Service Obligation (PSO) Levy; and, in respect of investment in the regulated gas and electricity networks by the system operators, through network charges”. The NRRP commits €518 million towards decarbonising projects such as retrofitting, ecosystem resilience and regeneration, climate mitigation and adaptation, and green data systems (RSO2.1, RSO2.4, RSO2.7). The NDP and the NRRP commit significant funding towards Sustainable Urban Mobility (RSO2.8). EAFRD will continue to play a role in supporting resource efficiency and energy efficiency in agriculture, food and forestry sectors.
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Timing is also a factor in the decision to focus on RSO2.1. While actions to promote the Circular Economy (RSO2.6) and to enhance biodiversity (RSO2.7) will be required in the programme area and are consistent with regional policy objectives, regional actions towards meeting these objectives are best delivered under two forthcoming national policy frameworks, not yet published. The “Whole-of-Government Circular Economy Strategy” will provide an overall national policy framework for the circular transition and will include measures to improve Ireland’s circularity performance above the EU average by 2030. Ireland’s “4th National Biodiversity Action Plan (2022- 2026)” has been drafted following a comprehensive review of national, European and international biodiversity policies and other relevant plans and strategies. It will take a “a whole-of-government, whole-of-society approach” and will be finalised and published following a period of public consultation later this year. Focusing investment on promoting energy efficiency is not intended to downplay the importance of addressing other areas of climate action, it simply recognizes that the Programme has limited resources and other sources of funding will have a role to play in delivering on the specific objectives under PO2. This focus remains aligned with the RSES, both of which emphasize that improving energy efficiency is vital to reduce energy consumption while improving economic growth. The supported actions also prioritise operations that respect the ‘energy efficiency first’ principle in support of objective of achieving a climate-neutral Union by 2050, as per recital 60 of Reg (EU) 2021/1060. In assessing the actions to be supported under RSO2.1, it was important to consider how they would complement other investments and how they could build on lessons learnt under previous programmes. Some consideration was given to supporting actions to promote energy efficiency in public sector buildings. CAP21 includes plans for a Public Sector Energy Efficiency and Decarbonisation Programme to address all major building portfolios in the sector. The NRRP and NDP funding is supporting pathfinder projects and there are commitments to develop an EPC delivery vehicle for up to €1 billion of privately-funded EPCs in public buildings. However, there are very significant short-term barriers to be overcome, including developing mechanisms and guidance to support off-balance sheet treatment, capacity building in the public sector and supply-side issues, all of which would impact on absorption and programme delivery. Instead, the focus will be supporting the regional delivery of the new National Retrofit Plan. This plan aims to reduce emissions from the Residential sector from 7 Mt CO2 eq. in 2018 to between 3.5-4.5 Mt CO2eq. in 2030. The overarching need to improve the energy efficiency of the Southern Region’s residential sector is evident from the low levels of audited households to register a Building Energy Rating (BER) between “A” and “B”. Between 2009 and 2020, only 19 per cent of audited households in Ireland registered a BER between “A” and “B”, with the corresponding ratios for households based in the Southern Region – particularly in the Mid-West and South-East – notably low and in most cases below the State average. The Southern Region’s challenge of improving household energy efficiency is also reflected in the fact that many households – particularly in rural based areas – continue to rely on solid fuels as their source of energy for their main space heating system . Between 2009 and 2020, 5% of the homes in Ireland – that were audited for a BER – noted that they used solid fuels as their main space heating fuel, with above average proportions predominantly registered in rural based areas across the Southern Region. The decarbonisation of the Eastern and Midland Region’s residential market represents a significant development challenge, particularly considering its size in absolute terms. Although the Eastern and Midland Region – specifically in Dublin and the Mid-East – recorded above average proportions of households with a BER between A” and “B”, these proportions continue to remain notably low in the more rural parts of the region. Households in Dublin and the Mid-East were generally not dependent on using solid fuels as their household’s heating fuel source. Under the NRRP, the Government is working with the Strategic Banking Corporation of Ireland and the European Investment Bank to develop a retrofit loan guarantee scheme and associated low-cost residential retrofit loans. This will make comprehensive home energy efficiency upgrades more affordable to middle- and high-income households and noncorporate landlords. It will address a key investment need in the regions. However, it is
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