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Next Generation EU and National Recovery Plans

On 27 May 2020, the European Commission proposed a temporary recovery instrument called Next Generation EU (NGEU), meant to address the unprecedented crisis caused by COVID-19. Currently, Member States are submitting their National Recovery and Resilience Plans on the basis of the European Commission’s recommendations. As of 30 April 2021, 14 national plans have been tabled, and the remaining 13 are expected to come within the next days and weeks.

Next Generation EU: The basics

The Next Generation EU is an envelope of €750 billion representing the largest stimulus package ever financed by the EU and is designed to boost the recovery of EU economy on the basis of two clear targets:

  • 37% for green investments and reforms. Each Member State will have to include a minimum of 37% of expenditure related to climate and other environmental objectives.
  • 20% for digital investments and reforms. Each Member State will have to include a minimum of 20% of expenditure to foster the digital transition.

To achieve the targets outlined above, the Member States had until 30 April 2021 to advance a National Recovery and Resilience Plan. Almost all Member States have worked hard to to set up their national recovery and resilience plans, with a constant activity following the guidance provided by the European Commission (I and II). The Member States also integrated their recovery and resilience plans with the annual national reform programs in line with the European Semester objectives.

Two concrete case examples in Belgium and Italy, which have already formulated their plans, provide a vivid example of current and future opportunities for businesses to profit in the sustainability sector.

European Green Deal Impact Scan

Dr2 Consultants is expertly placed to assist your company in identifying the opportunities in the National Recovery and Resilience Plans. Our expertise in sustainability and digital topics neatly overlaps with proposed activities at national and European level. Get in touch with us for more information.

National Recovery and Resilience Plans

Belgium

Regarding Next Generation EU in Belgium, the different governments have on 11 January 2021 found an agreement on the distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities.

National Recovery Plan: Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Belgium officially submitted its National Recovery and Resilience Plan (‘Relance plan’) before the deadline of 30 April, which had to be agreed between the six different governments. However, it is clear that the plan will centre around six key themes:

  1. Climate, sustainability and innovation;
  2. Digital transformation;
  3. Mobility;
  4. Social issues and society;
  5. Economy of the future and productivity;
  6. Government finances.

Within the sustainability pillar, the plan will have a major focus on energy renovation of buildings, renewable energy sources, biodiversity and circular economy activities. A shortlist of potential projects can be found here. It is clear that within the first pillar, the focus lies very much on the renovation of existing buildings, the development of an economy based on hydrogen and other green gases, and the restoration of biodiversity. Belgian companies which are active in the above mentioned sectors are thus highly encouraged to seek close contact with the cabinet of Minister for Recovery, Thomas Dermine.

Italy

On 1 May 2021, the Italian Government has presented to the European Commission its Piano Nazionale di Ripresa e Resilienza (PNRR) which has a budget of €191.5 billion and outlines the trajectory that the country will follow to achieve the goals of Next Generation EU.

Based on 6 missions spanning from digitalization to green transition and mobility, the PNRR covers various projects to make Italy a more modern, more digital, more sustainable and more inclusive country. Mission 2 called “Green Revolution and Ecological Transition” is at the core of the plan, envisaging to earmark €59.3 billion to four components:

  1. Circular economy and sustainable agriculture;
  2. Renewable energy and sustainable mobility;
  3. Energy efficiency and building requalification;
  4. Protection of territory and water resources.

Mission 2 is predominantly oriented towards the pursuit of environmental sustainability, but it also has considerable digitization content. The investment actions will be accompanied by specific reforms aimed at promoting the energy transition and the use of renewable sources, providing the necessary infrastructure for their integration into the national electricity system. The largest amount of investments is dedicated to heading 2, with allocations for rapid mass transport and a new generation of vehicles for local public transport. The ultimate aim is to achieve the overall EU decarbonization targets, which envisage a fleet of 6 million electrical vehicles by 2030. Local authorities and businesses will be a key player in implementing this line of action.

The interventions will be consistent with the European Circular Economy Action Plan, with the aim of reducing the net production of waste and the landfill of all processed waste, and will ultimately contribute to the achievement of the EU climate objectives, made even more challenging by the provisional agreement reached by the European Parliament and the Council on the Climate Law proposal on 21 April 2021, which targets a collective net greenhouse emission reduction of at least 55% by 2030 in comparison to 1990.

The Government will also publish a governance model that identifies responsibilities for its implementation, ensures coordination with relevant ministers and monitors progress on spending.

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