BIOREFINERY GLAS D3.2 Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology BIOREFINERY GLAS IS A EUROPEAN INNOVATION PARTNERSHIP (EIP) FUNDED BY THE DEPARTMENT OF AGRICULTURE, FOOD, AND THE MARINE (DAFM) UNDER THE RURAL DEVELOPMENT PROGRAMME 2014-2020 Deliverable 3.2 Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology Project title: Biorefinery Glas Contract Nº: LLOC2043 Start date: 01/02/2019 Duration: 24 months Deliverable number D3.2 Deliverable title Guide on Financing Options for Farmer Uptake of Small-Scale Biorefinery Technology Submission due date M21 – October 2020 Actual submission date 31/10/2020 Work Package WP3 WP Lead Beneficiary ITT Dissemination Level Public Version 01 Authors Ozan Nadirgil (Institute of Technology, Tralee) DOCUMENT CONTROL PAGE Author(s) James Gaffey (ITT) # Reviewer Comments 1 JG Some minor changes Version history Comments Draft Status x FINAL Deliverable 3.2 Guide on financing options, markets and business models for farmer uptake of small- scale biorefinery technology Page 2 of 44 Executive Summary The Biorefinery Glas project presents an opportunity for farmers in the bioeconomy, both as suppliers, but also in a more central role as pre-processors and producers, potentially increasing their share of value in the bioeconomy value chain. The small scale biorefinery which has been demonstrated in the Biorefinery Glas project, is designed as a user- friendly, automated and mobile facility with low capital expenditure and operational cost requirements providing a feasible opportunity for famers to become more central players in the bioeconomy, while addressing key national and regional challenges. The purpose of this deliverable is to provide farmers and other stakeholders with supporting information on financing opportunities to enable further development and uptake of small-scale biorefineries. Through this scoping exercise many financing tools have been identified which may support farmers or other primary stakeholders to progress or commercialize sustainable ventures. Within this document we discuss these instruments and provide examples of relevant projects which have already been funded through the different programmes and investment schemes. This report provides an overview of public funding available at EU and National/Regional level, as well as co-financing and private funding opportunities. The EU Funds section covers the recurring EU programmes, including Horizon Europe, Green Deal, LIFE Programme, EAFRD, EIP-Agri, BBI JU and European Investment Bank funds. Horizon Europe is a €100 billion research and innovation programme that will succeed Horizon 2020 and will cover the period 2021-2027. It is designed with an investment mind-set rather than as a ‘funding’ instrument and built to help support the EU transition to a sustainable and prosperous future. Within the new Horizon Programme, all financial instruments will be implemented under a single Invest EU Fund with two new windows; Research & Innovation and SME. The European Green Deal Investment Plan aims to mobilise EU funding and create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy by mobilising at least €1 trillion of sustainable investments over the next decade. The new LIFE programme for 2021-2027 is established by The European Commission regulation proposed in 2018, with a budget of €5.45 billion containing two main portfolios, Environment and Climate Action, and covering four sub-programmes. Supporting the transition to a circular economy, LIFE funding targets projects related to best technologies, practices and solutions developed at local, regional or national level and the programme is open for public bodies as well as private commercial and noncommercial organizations. The European Agricultural Fund for Rural Development (EAFRD) is the funding instrument of the CAP, which supports rural development strategies and projects. It also forms part of the European structural investment funds (ESIF). EIP-AGRI is one of the five European Innovation Partnerships that were launched to boost the EU’s capacity to innovate. EIP-AGRI focuses on forming partnership within the agricultural and forestry sectors, using bottom-up approaches and linking actors in different types of interactive innovation projects such as the operational groups under national/regional rural development programmes (RDPs) and multi-actor projects under Deliverable 3.2 Guide on financing options, markets and business models for farmer uptake of small- scale biorefinery technology Page 3 of 44 Horizon 2020. It provides funding for EIP-AGRI innovation projects which look at tackling specific practical issues and opportunities according to the needs of the agricultural and forestry sector. The Bio-based Industries Joint Undertaking (BBI JU) is a €3.7 billion Public-Private Partnership between the European Union and the Bio-based Industries Consortium (BIC) focused on scaling up Europe’s bioeconomy with a focus on feedstocks, biorefineries, markets, products and policies. The two founding partners, the EU Commission and the Biobased Industries Consortium contribute €975 million in public funding (provided by the Horizon 2020 programme) and €2.7 billion in private funding by BIC partners and private industry. By 2024, each euro of BBI JU funding is expected to have attracted a private contribution of €2.8. BIC recently launched a review into participation of the agricultural primary production sector within its funded project, with proposals for better integration of farmers and their representatives. EIB provides funds in the form of loan, guarantee schemes and equity to support private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy. It will be guaranteed by the EU budget under the European Fund for Strategic Investments (EFSI), which forms the financial pillar of the “Investment Plan for Europe”. EIB recently announced the launch of a new financing initiative that aims to unlock close to €1.6 billion of investment in the agriculture and bioeconomy sector. The lending programme enables direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million. Another FI of EIB, InnovFin Equity programme supports micro, small or medium-sized enterprises (SMEs) and social enterprises which play a crucial role in promoting innovation and the creation of growth and employment, but which face difficulties in accessing finance. Small and medium sized enterprises, midcap cooperatives and larger private sector enterprises active in the bioeconomy across the EU can also benefit from the Agriculture and Bioeconomy Programme Loan. Besides the EU bioeconomy funds, there are also plenty of national, regional and joint programmes and organizations available for farmers to finance the small-scale bioeconomy opportunities, comprising Project Ireland, LEADER Programme, Enterprise Ireland, The Strategic Banking Corporation of Ireland and Halo Business Angel Network (HBAN). Project Ireland 2040 supports business and communities across all of Ireland in their transition to a low carbon economy with a €500 million Climate Action Fund dedicated to support initiatives that contribute to the achievement of Ireland's climate and energy targets and a €500 million Disruptive Technologies Fund for investments in the development and deployment of disruptive innovative technologies and applications, on a commercial basis, targeted at tackling national and global challenges. LEADER is a joint programme providing support for private enterprises and community groups who improve the quality of life and economic activity in rural areas by funding projects through Local Action Groups (LAGs). The total funding available under the LEADER 2014-2020 Programme is €250 million. Deliverable 3.2 Guide on financing options, markets and business models for farmer uptake of small- scale biorefinery technology Page 4 of 44 Enterprise Ireland provides funding and support for companies from entrepreneurs with business propositions for a high potential start-up through to large companies expanding their activities, improving efficiency and growing international sales. The Strategic Banking Corporation of Ireland offers low-cost credit available to Irish SMEs provided through on-lending partners who, in turn, lend directly to SMEs. Meanwhile, HBAN as a joint initiative of Enterprise Ireland, Inter Trade Ireland and Invest Northern Ireland, managed by Dublin BIC, has been helping start-ups access funding for growth since 2007. In 2019, HBAN business angels across Ireland invested €16.8m into 66 companies and leveraged a further €36m from public and private funds through organizations such as Enterprise Ireland and Venture Capital funds, bringing the total funding in these deals to €52m. In addition to EU and national level funds, private funding mechanisms stand as a good alternative source of funds by ensuring additional benefits and public attention into the projects that online crowdfunding platforms enable the entrepreneurs to create and manage their own campaigns for their innovative projects and raise funds in forms of donations, grants, equity or loan. Private funding mechanisms have also the potential to adjust the shortcomings of the public funding by providing additional