EC consults on application of DNSH rule

The DNSH principle, Do No Serious Harm, was first defined in Regulation (EU) 2020/852 on systematics. This principle applies to a growing number of EU funds. This is due to the need to implement the policy goals of the European Green Deal, which state that all EU actions and policies should be brought together to help the EU achieve a successful and equitable transition to a sustainable future.

Currently, the DNSH principle applies to the Reconstruction and Resilience Facility and in cohesion policy funds. The InvestEU Fund uses guidelines to control the sustainability of projects, a translation of the DNSH principle. In the near future, it is planned that this principle will be applied to the modernization and innovation funds, as well as the Social Climate Fund (after special guidelines are developed).

The purpose of the consultation is to inform stakeholders about the planned development of technical guidance on the DNSH principle for the Social Climate Fund, and to provide positions and opinions on the policy direction in the future application of the principle to other EU funds. Opinions can be submitted to the European Commission until May 28, 2024.

The European Commission assures that the information and opinions received will be posted on its website and will be taken into account when developing the final form of the initiative. In addition, it is an opportunity to consider ways to make the application of the DNSH principle more effective and consistent, based on lessons learned from its implementation to date under various EU funds and programs.

Legal requirements for the application of the DNSH rule

In the case of some EU programs and funds, legislation indicates the obligation to apply the DNSH principle under Regulation (EU) 2020/852, the so-called DNSH. EU systematics regulation. This principle should be applied, among other things. IN CASE:

• Cohesion policy covered by the Common Provisions Regulation (European Regional Development Fund (ERDF); European Social Fund Plus (ESF+); Cohesion Fund; Fair Transition Fund (FST); European Maritime, Fisheries and Aquaculture Fund (EFMRA); Asylum, Migration and Integration Fund (FAMI); Internal Security Fund (ISF); Border and Visa Management Facility (BVI));
• Reconstruction and Resilience Facility (Regulation 2021/241) and REPowerEU;
• ETS directive – the modernization fund and the innovation fund;
• The proposal for a regulation establishing the Instrument for Ukraine;
• Social Climate Fund.

DNSH rule guidelines

European Commission in 2023. has developed technical guidance C(2023)6454 on the DNSH principle for the Reconstruction and Resilience Facility, a note clarifying the application of this principle under the Cohesion Policy, as well as guidelines for checking the sustainability of projects financed with repayable support under the InvestEU Fund.

In addition, Regulation (EU) 2023/955 establishing the Social Climate Fund specified the requirement for the European Commission to issue technical guidance on the compatibility of measures and investments with the DNSH principle under Regulation (EU) 2020/852. The extension of DNSH, combined with ad hoc, separate guidelines for each EU fund and program, may entail the risk of divergent approaches in implementing the principle. Therefore, the EC has taken the initiative to develop guidelines to clarify how measures in socio-climate plans are to comply with the DNSH principle.

Advantages of a consistent approach

Undoubtedly, a unified approach to the application of the DNSH rule has the advantage of increasing legal certainty and streamlining procedures. The ex-ante criteria for compliance with this principle guarantee uniform guidance for the administration and project implementers. Thus, a consistent approach should reduce the administrative burden. In addition, the initiative is expected to make it possible to ensure efficient use of the administrative resources of the European Commission and member states.

Technical guidelines for the Social Climate Fund

The technical guidelines for the Social Climate Fund are intended to ensure its alignment with the EU’s climate, energy and environmental goals. They are also expected to positively influence better use of technology for green transformation and European competitiveness, while allowing to mitigate possible negative impacts on vulnerable households, transport users or micro-enterprises. In addition, the appendices to the guidelines will discuss the impact of the planned uniform guidelines on the DNSH rule on the application of the rule in the next MFF.

The guidelines are also intended to assist in the efficient disbursement of future EU funds by enabling synergies between funds, realizing the policy goals of the European Green Deal and the following Sustainable Development Goals:

• 7 – Clean and accessible energy;
• 11 – Sustainable cities and communities;
• 12 – Responsible consumption and production;
• 13 – Climate Action;
• 14 – Life underwater;
• 15 – Life on land.