The European Union has limited financial resources (at least compared to its Member States) but much wider regulatory reach. It is logical therefore for it to concentrate its financial resources on key industries and to coordinate this with regulatory interventions.
We have already mentioned in a previous blogpost how the EU is turning its attention to industrial policy and in this contribution we look at how the EU is seeking to focus its own resources and those of its Member States on what it identifies as critical technologies.
The Strategic Technologies for Europe Platform Regulation – STEP
The recently adopted Strategic Technologies for Europe Platform Regulation ("STEP") continues the EU's targeted approach to industrial policy by identifying objectives to be achieved, establishing a list of technology sectors to be supported and laying down criteria for deeming technologies to be "critical".
These objectives of STEP are defined as:
- supporting the development or manufacturing of critical technologies throughout the Union, and
- safeguarding and strengthening value chains.
The three broad technological sectors that are within the scope of STEP are:
- digital technologies,
- clean and resource efficient technologies and
- biotechnologies.
These sectors are further elaborated in Commission Guidance on the implementation of STEP which refers to the list of ten critical technologies identified in the annex to the Commission Recommendation of 3 October 2023. We set out at the end of this blog post the sectors and technologies indicatively listed in the Commission Guidance. The Guidance does however specify that "criticality is a qualitative criterion" and that it can evolve with the development of technology and the geopolitical situation. It is noteworthy that the list of technologies is similar to that for which the Commission has asked the Member States to conduct risk assessments for vulnerabilities in connection with its initiatives on promoting economic security.
Support for Projects
A specific portal has been set up by the Commission to allow the implementation of STEP to be tracked and to assist projects in obtaining information and funding.
STEP does not provide any new EU funding for projects but harnesses the funds available under existing EU programmes.
The Commission has already launched calls for proposals under the Digital Europe Programme, the European Defence Fund, the EU4Health programme, Horizon Europe, or the Innovation Fund. Further calls for proposals under programmes managed jointly with the Member States or indirectly via implementing partners are to be launched during this year for: InvestEU, the Recovery and Resilience Facility, and the Cohesion Policy funds, including the Cohesion Fund, the European Regional Development Fund, the European Social Fund+ and the Just Transition Fund.
Projects recognised as strategic under the Net Zero Industry Act ("NZIA") or the Critical Raw Materials Act ("CRMA") will automatically be considered to contribute to STEP objectives. So also will projects in the three STEP technological sectors that are declared by the Commission as important projects of common European interest in the context of a State aid approval pursuant to Article 107(3) TFEU.
The Sovereignty Seal
An interesting feature of the STEP Regulation is the creation of what the STEP Regulation calls the "Sovereignty Seal" (and the Commission now refers to as the "STEP Seal"). This Seal is awarded to projects that satisfy the minimum qualification requirements under one of the funding programs coordinated through the STEP Regulation and that contribute to achieving STEP objectives.
The Seal can be obtained by any organisation or consortium established in any of the 27 EU Member States (or consortium for which at least one member is established in a EU Member State), even for projects that are not successful in obtaining funding under these programmes, provided that they satisfy the minimum qualification requirements of the programmes.
The Seal will be valid for the duration of the project. Its validity will however expire if the project is relocated outside the Union or if it has not started within 5 years of the award of the Seal.
The Seal will enhance access to EU funding by avoiding some paperwork and will facilitate alternative cumulative or combined funding from several EU budget instruments.
For example, Member States will be able to grant support from Cohesion Policy funds to projects having been awarded a Seal directly, without any additional selection procedures.
In addition, the Commission has undertaken to publish a list of projects awarded this Seal by the end of 2024. This is designed to provide them with additional visibility towards investors and may help attract public and private funding by certifying their quality and contribution to the STEP objectives.
Indicative list of sectors within the scope of STEP
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Biotechnology areas |
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DNA/RNA |
Genomics; pharmacogenomics; gene probes; genetic engineering; DNA/RNA sequencing/synthesis/amplification; gene expression profiling, and use of antisense technology; large-scale DNA synthesis; new genomic techniques; gene drive. |
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Proteins and other molecules |
Sequencing/synthesis/engineering/manufacturing of proteins and peptides (including large molecule hormones); improved delivery methods for large molecule drugs; proteomics; protein isolation and purification; signalling; identification of cell receptors; developing polyclonal products. |
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Cell and tissue culture and engineering |
Cell/tissue culture; tissue engineering (including tissue scaffolds and biomedical engineering); cellular fusion; marker assisted breeding technologies; metabolic engineering; cell therapies; bioprinting of cells/replacement organs |
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Process biotechnology techniques |
Fermentation using bioreactors; biorefining; bioprocessing; bioleaching; biopulping; biobleaching; biodesulphurisation; bioremediation; biosensing; biofiltration and phytoremediation; molecular aquaculture; protection and decontamination including human decontaminating agents; biocatalysis, novel test techniques suitable for high throughput screening; process improvement and delivery optimisation for biopharmaceuticals and advanced therapy medicinal products |
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Gene and RNA vectors |
Gene therapy; viral vectors |
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Bioinformatics |
Construction of databases on genomes; protein sequences; modelling complex biological processes; including systems biology; developing personalised genomics |
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Nanobiotechnology |
Application of the tools and processes of nano/microfabrication to build devices for studying biosystems and applications in drug delivery, diagnostics, manufacturing. |
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Digital technology areas |
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Advanced semiconductors technologies |
Microelectronics, including processors; photonic including high energy laser technologies; high frequency chips; semiconductor manufacturing equipment at very advanced node sizes; space-qualified semiconductor technologies |
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Artificial intelligence technologies |
AI algorithms; high performance computing (HPC); cloud and edge computing; data analytics technologies; computer vision, language processing, object recognition; privacy-preserving technologies (e.g., federated learning) |
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Quantum technologies |
Quantum computing; quantum cryptography; quantum communications; Quantum Key Distribution (QKD); quantum sensing including quantum gravimetry; quantum radar; quantum simulation; quantum imaging; quantum clocks; metrology; space-qualified quantum technologies |
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Advanced connectivity, navigation, and digital technologies |
Secure digital communications and connectivity, such as RAN (Radio Access Network) & Open RAN (Radio Access Network), and 5G and 6G; cyber security technologies including cyber- surveillance, security and intrusion systems, digital forensics; internet of things and virtual reality; distributed ledger and digital identity technologies; guidance, navigation, and control technologies, including avionics and maritime positioning, and space-based PNT; satellite-based secure connectivity |
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Advanced sensing technologies |
Electro-optical, radar, chemical, biological, radiation and distributed sensing; magnetometers, magnetic gradiometers; underwater electric field sensors; gravity meters, and gradiometers |
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Robotics and autonomous systems |
Autonomous habited and uninhabited vehicles (space, air, land, surface, and underwater), including swarming; robots and robot-controlled precision systems; exoskeletons; AI-enabled systems |
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Clean and resource efficient technology areas as defined under the NZIA |
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Solar technologies |
Solar photovoltaic technologies; solar thermal electric technologies; solar thermal technologies; other solar technologies |
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Onshore wind and offshore renewable technologies |
Onshore wind technologies; offshore renewable technologies |
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Battery and energy storage technologies |
Battery technologies; energy storage technologies |
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Heat pumps and geothermal energy technologies |
Heat pump technologies; geothermal energy technologies |
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Hydrogen technologies |
Electrolysers; hydrogen fuel cells; other hydrogen technologies |
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Sustainable biogas and biomethane technologies |
Sustainable biogas technologies; sustainable bio-methane technologies |
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Carbon capture and storage technologies |
Carbon capture technologies; carbon storage technologies |
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Electricity grid technologies |
Electricity grid technologies; electric charging technologies for transportation; technologies to digitalise the grid; other electricity grid technologies |
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Nuclear fission technologies |
Nuclear fission energy technologies; nuclear fuel cycle technologies |
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Sustainable alternative fuels technologies |
Sustainable alternative fuels technologies |
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Hydropower technologies |
Hydropower technologies |
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Other renewable energy technologies |
Osmotic energy technologies; ambient energy technologies, other than heat pumps; biomass technologies; landfill gas technologies; sewage treatment plant gas technologies; other renewable energy technologies |
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Energy system-related energy efficiency technologies |
Energy system-related energy efficiency technologies; heat grid technologies; other energy system-related energy efficiency technologies |
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Renewable fuels of non-biological origin technologies |
Renewable fuels of non-biological origin technologies |
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Biotech climate and energy solutions |
Biotech climate and energy solutions |
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Transformative industrial technologies for decarbonisation |
Transformative industrial technologies for decarbonisation |
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CO2 transport and utilisation technologies |
CO2 transport technologies; CO2 utilisation technologies |
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Wind and electric propulsion technologies for transportation |
Wind propulsion technologies; electric propulsion technologies |
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Other clean and resource efficient technology areas |
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Advanced materials, manufacturing and recycling technologies |
Technologies for nanomaterials; smart materials; advanced ceramic materials; stealth materials; safe and sustainable by design materials; additive manufacturing; digital controlled micro-precision manufacturing and small-scale laser machining/welding; technologies for extraction; processing and recycling of critical raw materials and other components (e.g. catalyst, batteries), including hydrometallurgical extraction, bioleaching, nanotechnology-based filtration, electrochemical processing and black mass |
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Technologies vital to sustainability such as water purification and desalination |
Purification and desalination technologies |
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Circular economy technologies |
Technologies for the reuse and recycling of electronics (e-waste); circular bioeconomy technologies (e.g., for converting waste to valuable bio-based materials or energy) |
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