Strategic Technologies for Europe Platform (‘STEP’)

In “A Europe Fit for the Digital Age”

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On 20 June 2023, the Commission presented the mid-term revision of the EU's Multiannual Financial Framework 2021-2027. The revision includes a proposal for a regulation establishing a Strategic Technologies for Europe Platform (‘STEP’). 

The proposed regulation would set up a Strategic Technologies for Europe Platform to support critical and emerging strategic technologies, establish the objectives of the platform, the amount of financial support available under the platform, and rules for the implementation of the 'Sovereignty Seal' and 'Sovereignty portal'.

The Platform would support the development or manufacturing, or safeguarding and strengthening the respective value chains, of critical technologies in deep and digital technologies, clean technologies and biotechnologies. It would also address shortages of labour and skills in these sectors.

The Commission would award a quality label ('Sovereignty Seal') to any action contributing to any of the platform objectives. It would help projects attract public and private investments by certifying its contribution to the objectives of the platform. 

The Commission would also launched a dedicated website (‘Sovereignty portal’), providing investors with information about funding opportunities for projects linked to the platform and make them more visible. 

The platform would provide flexibility in existing EU funding instruments (such as creating a new priority in cohesion policy funds, or a new window in InvestEU), reinforce the financial means of existing instruments with additional €10 billion (€3 billion for InvestEU, €0.5 billion for Horizon Europe, €5 billion for the Innovation Fund, and €1.5 billion to the European Defence Fund), and create synergies among existing instruments.

In Parliament, the file was allocated jointly to the Committee on Industry, Research and Energy (ITRE) and to the Committee on Budgets (BUDG). In total, 397 amendments to the Commission proposal were tabled in the joint committee. The joint draft report, including 79 amendments to the Commission proposal, was published on 4 September and discussed by MEPs on 7 September. In total, 397 amendments were tabled in the joint committee.

The report was adopted on 9 October 2023 with 43 votes in favour, six against, and 15 abstentions. The report would further align the proposed regulation with the relevant EU regulatory framework (Decision (EU) 2022/2481 on the Digital Decade policy programme, and the upcoming critical raw materials act and net-zero industry act). The critical technologies covered would be 'digital technologies', 'net-zero technologies' (as defined in the net-zero industry act), and biotechnologies and life sciences, including medicinal products on the EU list of critical medicinal products, as well as their components. A new annex on biotechnologies, including their definition, would be added to the proposed regulation.

The proposed amount of 'fresh' funding available for STEP would also be aligned with the amounts mentioned in Parliament's resolution of 3 October 2023 on the proposal for a mid-term revision of the MFF 2021-2027 (with €3 billion more for STEP). 

The European Commission would also establish a STEP committee, composed of Commission experts. It would award and promote the sovereignty seal, set up and manage the sovereignty portal, and liaise with other structures such as the critical raw materials board and the net-zero Europe platform. The interim evaluation report on the implementation of STEP, to be published by the Commission by the end of December 2025, would have to be accompanied by a proposal for amendments to the proposed regulation, or by a new legislative proposal for a fully-fledged European sovereignty fund. If the Commission decides not to present a legislative proposal for such a fund, it would have to justify its decision in the interim evaluation report.

Parliament adopted its position on 17 October 2023. Following the European Council (EUCO) meeting on 1 February 2024, the Council updated its mandate on the mid-term revision of the 2021-2027 MFF. The Council mandate would for instance add the deployment (in addition to the development and manufacturing) of critical technologies under the scope of the STEP. 

On 7 February 2024, the Parliament and the Council reached a provisional agreement on the 
proposal. The agreed text requires formal adoption by both institutions.

Under the co-legislators' provisional agreement, STEP will support projects that develop or manufacture critical technologies and strengthen their value chains, in the following sectors: digital technologies and deep tech innovation; clean and resource efficient technologies; and biotechnologies, including medicinal products. Strategic projects under the net-zero industry act or the critical raw materials act will be deemed to contribute to the STEP objectives. STEP will receive additional MFF funding of only €1.5 billion, allocated to the European Defence Fund. This is a significant cut compared to the Commission proposal and to Parliament's position (€10 billion and €13 billion respectively). To facilitate the use of cohesion policy funds in support of STEP, it will be possible, for instance, for relevant projects financed under the structural and investment funds to benefit from a one-off 30 % pre-financing rate and to apply a 100 % co-financing rate retroactively for the 2023-2024 accounting year. However, a funding cap of 20 % of the initial national allocation of the European Regional Development Fund for STEP investments will apply.

The new regulation was published on 29 February 2024. 



Further reading:

Author: Guillaume Ragonnaud, Members' Research Service,

As of 20/05/2024.