4RE Resource Efficiency Waste Prevention Implementation Fund

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1 GUIDANCE DOCUMENT 4RE Resource Efficiency Waste Prevention Implementation Fund 1. Background and Aims Resource Efficient Scotland is a programme delivered by Zero Waste Scotland which helps organisations across Scotland to save money by using resources more efficiently. We provide free, specialist advice and on-site support to help decision makers in business and thirdsector organisations cut their energy and raw material costs as well as enabling them to generate less waste. The Waste Prevention Implementation Fund programme is part funded by the European Regional Development Fund (ERDF). The fund will be focused primarily on capital grants for food and construction waste, however other waste prevention initiatives from other sectors may be supported. It is recognised that while organisations understand the benefits of waste prevention, they often do not take action, lacking the finance and support to make the necessary changes. This fund has therefore been designed to help organisations overcome these barriers to undertake a particular project with a focus on raw materials savings, carbon savings and the movement of waste material up the waste hierarchy. It is important that projects demonstrate added value and impact and that they are focussed on the physical implementation of waste prevention measure or measures, rather than identification or a feasibility study. The first stage in the process is for a qualifying audit report to be undertaken to identify the capital investment required. Once your audit report has been completed, you will be required to complete an Outline Project Proposal form, which you must submit along with your report for consideration. If you are successful in your proposal, the second stage is to complete a Full Application Form which will be assessed by a panel from Zero Waste Scotland. This guidance document provides advice on how to make your application for funding under the Resource Efficiency Waste Prevention Implementation Fund. It is important that you provide the information as set out in this document or your application may not be assessed and deemed non-compliant. 1

2 2. Who Can Apply? In order to be eligible, applicant organisations must meet the following criteria: You must be a registered small or medium sized enterprise (EC definition of an SME 1 ), a registered 3 rd sector organisation or a Community Interest Company (which must be SME equivalent status) Have been in operation for a minimum of 12 months Operate within Scotland and the project site must be located within Scotland A qualifying report must have been undertaken prior to applying and a copy of the report must be appended to your application. Sectoral restrictions: The following sectors are not eligible for support under this programme: o fishery and aquaculture sectors which are supported through EMMF (European Maritime and Fisheries Fund) o primary production, processing and marketing of agricultural products, which is supported through SRDP o the coal, steel and shipbuilding sectors (excluded by the General Block Exemption EC 800/2008) o the synthetic fibres sector (excluded by the General Block Exemption EC 800/2008). Further explanation of the meaning of synthetic fibres sector can be found on the European Commission website at - Code on Aid to the Synthetic Fibres Industry (1996, subsequently extended.) o Banking and insurance companies o Establishments providing generalised (school age) education The following types of organisation are eligible to apply for funding: Small and medium-sized enterprises (SMEs) that are registered with Companies House and fit the following profile (European Commission definition of an SME): Company category Staff headcount Turnover or Balance sheet total Medium-sized < m 43 m Small < m 10 m Micro < 10 2 m 2 m 1 The European Commission definition of an SME is as follows: fewer than 250 employees; and has either (a) annual turnover not exceeding 50 million (approximately 40 million) or (b) an annual balance-sheet total not exceeding 43 million (approximately 34 million); and of whose capital or voting rights, 25 per cent or more is not owned by one enterprise, or jointly by several enterprises, that fall outside this definition of an SME. This threshold may be exceeded in the following two cases: (a) if the enterprise is held by public investment corporations, venture capital companies or institutional investors provided no control is exercised either individually or jointly, or (b) if the capital is spread in such a way that it is not possible to determine by whom it is held and if the enterprise declares that it can legitimately presume that it is not owned as to 25% or more by one enterprise, or jointly by several enterprises, falling outside the definitions of an SME. 2

3 These ceilings apply to the figures for individual enterprises only. If the enterprise is partly owned or controlled by another organisation, or partly owns or controls another organisation, then the calculation of employees, turnover and balance sheet has to take this into account. If this applies to your enterprise then you may want to consult the Commission s guidance on what is an SME, including the revised User Guide to the SME Definition 2 Registered third sector organisations (including community and voluntary groups, registered charities, foundations, trusts, social enterprises, Community Interest Companies (CICs) and cooperatives) that conform to the EU SME definition. Collaboration between two or more organisations is actively encouraged where it strengthens the overall proposal. For the purposes of this Fund, a large enterprise (i.e. larger than a SME) and an academic partner or research organisation can be part of a wider collaboration but cannot be the recipient of ZWS funds. The lead partner (the applicant) must conform with the organisation types listed above and will be the only direct recipient of the funding. Any State Aid shall apply directly to the lead partner with whom all contractual obligations shall be binding. For the avoidance of doubt, the following types of organisation are not eligible to apply for grants: Public sector bodies (publically funded bodies such as councils, academic institutions) Large sized companies, i.e. companies which are not SMEs. Waste Management Companies (e.g. businesses whose core business is management, recycling or disposal of waste) Please note that if you have previously received European Union (EU) funding in relation to your proposed project from other source/s (i.e. not part of the 2 stage ZWS Waste Implementation Funding Programme) then this will render you out of scope to apply as this would count as double funding. Furthermore, it would be a condition of contract if you are successful, that you would be unable to apply in the future for EU funding specifically relating to the ZWS funded project. 3. State Aid It is likely that your project will be subject to State Aid 3 which generally applies where the recipient is an undertaking and engaged in an economic activity. The State Aid mechanism for this programme is De Minimis Regulation (EC No. 1407/2013). 3.1 De Minimis Regulations Under De Minimis Regulation (Commission Regulation 1407/2013), as a single undertaking 4 and over a 3 year fiscal period (during your organisation's current and previous 2 fiscal years), applicants can only receive a maximum of 200,000 including the potential support from Draft Commission Notice on the notion of State aid pursuant to Article 107(1) TFEU, 2014 (section 6.3); 4 Single undertaking" includes, for the purposes of the Regulation, all enterprises having at least one of the following relationships with each other: a) one enterprise has a majority of the shareholders' or members' voting rights in another enterprise; b) one enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise; c) one enterprise has the right to exercise a dominant influence on another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association; d) one enterprise which is a shareholder in or member of another enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders' or members' voting rights in that enterprise. 3

4 Resource Efficient Scotland. You should calculate how much you may still be eligible to receive using the European Commission exchange rate calculator found here: (please refer to section 5 of the Application Form and complete either Option A (De Minimis Declaration) or B (State Aid Exemption Declaration) not both). 3.2 Exemption from State Aid In certain circumstances relating to the project proposal, the support to be received may not be classified as State Aid. There are four tests as to whether an aid is State Aid, all of which have to be met. The first three of the tests are likely to be met in most cases of support provided under the programme: that the assistance is provided by state resources, that it gives an advantage to an undertaking and that it has the potential to distort competition. However it is possible that the fourth test ( Does the assistance affect trade between Member States ) may not be met, for example in cases of a small enterprise involved in: construction; maintenance and repair of motor vehicles; repair of personal and household goods; hotels and restaurants; or other community, social and personal service activities. This is because there could be an argument that the activity is purely local in nature and not trying to attract customers from other member states. As all tests are cumulative, if the fourth test is not met in these cases then a no aid position can be reached. Each project proposal will need to be assessed against all of the four tests in order to identify if State Aid is likely to be present or not. A communication from the Commission provides more detail on this point. The Commission has sole competence on the presence of State Aid so any decision to adopt a no aid position is one which is risk based and should it be subsequently deemed that State Aid is present you may be required to repay part of all of the grant received. 4. What are the scope and requirements of this programme? To be eligible for funding, the applicant must meet all of the following criteria: have received a qualifying audit report in order to clearly identify the quantitative environmental and economic benefits to the business of the capital investment; result in evidenced implemented cost and carbon savings; be able to demonstrate that the project would not be viable without receiving the implementation funding. 5. What is out of scope? Applications received from any organisation which is not an EC defined SME or SME equivalent. Projects which only help an organisation to meet regulatory requirements (unless part of a wider project). Development of management systems e.g. energy, environmental etc. Projects that do not result in waste prevention. Identification or feasibility projects as these will need to be completed prior to making an application to this support. 4

5 6. Evaluation Criteria If your organisation is eligible and your project meets the scope, your application will be put forward for assessment and will be evaluated against the following criteria and weightings: Return on Investment (i.e. value of support vs implemented savings) and economic impact on the business (35%) Environmental impact (35%) Other beneficial impacts (20%) Environmental commitment and overall commitment to Health & Safety (10%). 7. How much funding is available? Unless you consider that your project is exempt from State Aid, this funding programme is offered under an element of European Community State Aid rules known as De Minimis Regulation (Commission Regulation No. 1407/2013) which allows for financial support of up to 200,000 euros over your organisation's current and previous two fiscal years. We will fund up to 100% of the capital cost for the project as long as the value of the support does not exceed your de minimis limit as a result of the funding and up to a maximum of 100,000 excluding any VAT. Projects that propose the leasing of equipment may also be considered. There will be a minimum value of support of 5,000 per project. However, projects below this minimum, will be considered on merit. Please note that we will not pay the VAT element unless you can demonstrate that you are not registered for VAT as you should claim this back from HMRC with your standard return. All projects funded by ERDF may be subject to review and audit to confirm that funds are spent in accordance with the Programme. The audit scope may include an audit of a grant recipient s procurement processes. All procurement processes for the purchase of goods, works or services related to the funding are required to comply with your organisation s own procurement processes and are required to be carried out in a fair and transparent manner. To demonstrate this, some organisations may prefer to obtain a minimum of three supplier quotes. If only one quote is requested, the applicant should provide a justification as to the reasons for this. The ERDF National Rules of Expenditure set out eligible and ineligible costs which we would advise you to refer to and a copy is downloadable from our website. Failure to comply may result in the claw back of any funding paid to the grant recipient. 8. What is required in return? A contract will be agreed between Zero Waste Scotland and the recipient for each successful applicant based on information provided in the application form. Milestones and payment schedules will be agreed during the contract negotiation period. Please note that it can take up to 30 working days for Zero Waste Scotland to process requests for payment. Within the application, applicants are required to sign a Case Study Consent Form and successful applicants will be required to provide information to Zero Waste Scotland on the 5

6 delivery of the project and any lessons learned which will be developed into a final case study for potential publication. 9. The Application Process and Timescales The application process will comprise of two stages: Stage 1: Outline project proposal You will need to complete an outline project proposal in order to ZWS to determine whether a) your organisation is eligible to apply and b) your project proposal meets the scope of this programme. If you meet both of these requirements you will be invited to make an application to Stage 2. Stage 2: Full application If you are deemed to be eligible for BOTH a) and b) above you will be invited to submit a full application and this will be sent to you for completion by ZWS. If you do not meet a) and b) you will be advised that your application will not be taken any further. Upon receipt of a full application it will be assessed against the criteria as set out above and a response provided within 10 working days as to whether or not your application is successful. There is a finite budget for this programme which will operate on a rolling basis and we would therefore encourage an early application. Completion of the project shall include the scoping and design of the project and subsequent commissioning to put the implementation into practice. Potential applicants are encouraged to contact the Resource Efficient Scotland helpline, for further information or clarity if required. The Advice & Support Service will also be able to provide guidance and what you will need to include with your application. All claims and supporting evidence supplied must include certified copies of original invoices, commissioning certification and proof of payment in the form of certified copies of bank statements and/or BACs documentation. 10. Need further information? If you have any queries with regards to the process going forward or the programme, please contact Lesley McMurtrie, Lesley.mcmurtrie@zerowastescotland.org.uk Telephone: Mobile: or Lynda Stephens, Grants & Payments Officer on

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