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Biodiversity financing

The EU has committed to halting the loss of biodiversity and the degradation of ecosystem services in the EU by 2020. To achieve this objective, we mainstream the objectives of our biodiversity strategy throughout the EU budget. But the overall spending under the EU budget must be biodiversity-proof. We must make sure that the overall EU spending has no negative impacts on biodiversity and supports the achievement of our biodiversity targets.

Biodiversity proofing the EU budget

We have developed a practical framework including general and fund-specific guidelines to be used by national and regional authorities as well as by Commission services.

The common framework (general guidance) can be applied to most EU funds by national and regional authorities in Member States. It does not apply to centrally managed non-programmed funds such as Pillar 1 of the Common Agricultural Policy. This document also includes guidance on proofing the policy cycle, which targets the Commission services.

The fund-specific guidance documents focus mainly on biodiversity proofing the project cycle, i.e. calls for proposals, project development and selection, project execution and project monitoring and evaluation. These guidance documents target national and regional authorities in Member States.

The above guidance documents are a follow up to an earlier study: Background Study towards biodiversity proofing of the EU budgetPDF.

Tracking biodiversity expenditure in the EU budget

The EU finances the protection of biodiversity by mainstreaming the objectives of our biodiversity strategy throughout the EU budget. We need to track how much is spent on these objectives to ensure that our efforts and spending have the desired positive outcomes for biodiversity and human well-being. As a party to the Convention on Biological Diversity, we also need to report on our domestic and international biodiversity-related financing flows. The study “Tracking biodiversity expenditure in the EU budget” developed twofold guidelines for a consistent methodology to track biodiversity expenditure throughout the EU budget and recommendations for their implementation in the EU budget for 2014-2020.

The guidance on definition and criteria for biodiversity expenditure in the EU budgetPDF applies the Rio markers, outlining key challenges, and proposes a workable approach to tracking expenditure at different levels and stages of the budgeting process. The fund-specific guidance documents provide an approach to tracking biodiversity-related expenditure under the EU funding instruments (Common Agricultural Policy, Cohesion Policy, European Maritime and Fisheries Fund, Horizon 2020, LIFE programme, …)

The Commission is now taking the next steps, implementing and testing these guidelines, including through providing ex ante estimates of how much different instruments contribute to biodiversity objectives in the forthcoming EU budgets.

In 2017 a follow-up study "Study on biodiversity financing and tracking biodiversity-related expenditures in the EU budget PDF" assessed first tracking experiences and proposed avenues to fine-tune the methodology. It also reviewed opportunities for biodiversity funding in the EU 2014-2020 budget as well as in the private sector, in particular through payments for ecosystem services.

Natural Capital Financing Facility

Halting the loss of biodiversity and adapting to climate change requires increasing investment in natural capital to complement the more traditional grant-based funding. The NCFF financial instrument developed by the LIFE programme aims to demonstrate that natural capital projects can generate revenues or save costs, whilst delivering on biodiversity and climate adaptation objectives.

The NCFF will establish a pipeline of replicable, bankable operations that will serve as a "proof of concept" and that will demonstrate to potential investors the attractiveness of such operations. The available funding under the NCFF should finance some 9-12 projects over the 2015-2017 period.

Find out more about the LIFE Natural Capital Financing Facility.

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