STEP will help reinforce and leverage existing EU instruments in view of a quick deployment of financial support to the benefit of companies. STEP will also help to direct existing funding towards technology fields that are crucial for Europe’s leadership, while safeguarding cohesion and preserving the level playing field in the Single Market.
STEP will mobilise available funding within the scope of existing instruments and deploy them in a more focused and flexible manner.
This will help to strengthen European competitiveness and sovereignty for an estimated investment potential of up to €50 billion across the EU (including the multiplication effect on private investment). STEP is a testing ground for the broader architecture of EU funding for competitiveness.
Making better use of existing EU funds
The following 11 EU funding programmes contribute to STEP: Digital Europe Programme, European Defence Fund, EU4Health, Horizon Europe, Innovation Fund, InvestEU, Recovery and Resilience Facility, as well as cohesion policy funds such as Cohesion Fund, European Regional Development Fund, European Social Fund+ and Just Transition Fund.
The European Defence Fund will additionally benefit from a reinforcement of €1.5 billion with an investment potential of €2 billion in the STEP priority areas.
However, the total estimated investment potential of up to €50 billion will largely rely on Member States decision to reprogramme their cohesion policy programmes and recovery and resilience plans to support STEP projects.
STEP will offer financial incentives to direct cohesion policy funds toward investments in critical technologies. This will include a 100% co-financing rate for STEP priorities during the 2021–2027 programming period, along with a one-time 30% pre-financing option for Programme Amendments submitted by March 31, 2025. Additionally, support for productive investments in large enterprises will be available for the first time in less developed and transition regions, as well as in more developed regions in Member States with a GDP per capita below the EU-27 average. Furthermore, under the Recovery and Resilience Facility, Member States will have the option to allocate up to 10% of their national envelope to STEP-relevant instruments under InvestEU.
The proposed mix of financial incentives and measures to facilitate the financing of projects will help all member states to develop their capacities and contribute to a level playing field for investments in critical technologies in the single market.
Support at the different stages of development of technology
EU funding under STEP provides support to critical technologies at different stages of development, from technologies that are at still at development, demonstration, or prototype stage, to technologies that are already commercially available and for which markets already exist:
- Support to the upstream development of critical technologies: this includes research and innovation, up to the prototype demonstration in an operational environment.
- Support to critical manufacturing capacities for large scale production: this covers measures supporting the establishment of manufacturing capacities at industrial scale (including first-of-a-kind ones) for critical technologies’ products and relevant components and sub-components, including the machinery specifically used to produce these.