Validation of the self-assessment of compliance with the DNSH Principle
In response to the economic and social damage caused by the pandemic, the European Union has developed a recovery instrument known as “Next Generation EU”. For its development, the European Union has defined several recovery and financing elements, among which the European Recovery and Resilience Mechanism (ERM) stands out.
The European Recovery and Resilience Mechanism (ERM) allows funding only for projects that respect the “Do no significant harm” (DNSH) principle.
This requirement is being extended to the application of other European funds, such as ERDF 21-27. A clear example is some aid programs managed by CDTI (Center for Technological Development and Innovation), for which, in the event that the projects can be co-financed with ERDF 21-27 funds, the beneficiaries must first justify that their project complies with the DNSH principle.
What is the DNSH principle?
The DNSH (Do No Significant Harm) Principle is a condition defined by the Commission that requires a self-assessment to ensure that the investment or reform does not adversely affect one or more of the 6 environmental objectives defined in Regulation 852/2020:
- Climate Change Mitigation.
- Adaptation to Climate Change.
- Sustainable use and protection of water and marine resources.
- Circular Economy, including waste prevention and recycling.
- Prevention and control of air, water and soil pollution.
- Protection and restoration of biodiversity and ecosystems.
The organization shall carry out this self-assessment considering the life cycle of the project.
Likewise, investment or reform projects whose actions are eligible for financing from these European funds must have a self-assessment explaining that they comply with the principle of not causing significant harm to the environment (DNSH).
Validation of the DNSH Principle Self-Assessment
The organization’s self-assessment of compliance with the DNSH Principle for each project may require a third-party Validation Report to support the conclusions of the self-assessment and ensure that they are technically based and reasonable.
EQA offers this self-assessment validation process, after which it will issue a Validation Report on the project’s compliance with the DNSH principle, which it will provide to the organization.
This Validation Report can contribute to the necessary confidence of any Stakeholder.
What documentation is required for Validation?
The organization will deliver to EQA:
- A descriptive report of the project and the investment, according to the structure and content of the call for proposals.
- Self-assessment of the project’s compliance with the DNSH principle and its actions, for each of the six environmental objectives.
- Any other document required by the call for proposals.
EQA will evaluate the information provided, carrying out a validation process that ends with the issuance of an opinion on compliance with the DNSH principle.
Audit and control regime at the end of the project
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In line with these requirements, which will be transferred from the Administration to private entities, EQA offers a validation and verification service of the self-assessment of the DNSH Principle, according to the criteria included in the “Technical Guide on the application of the DNSH principle” published by the European Commission, thus reinforcing the guarantee of compliance with this requirement, and focused on the different phases of the project: ex ante validation, annual verification during the execution of the project until its completion, as well as the validation of a new self-assessment of the DNSH Principle in case of modifications of the project during its execution.
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How should Member States show that the measures comply with the DNSH Principle?
Member States (MS) must evaluate each of the measures and their impact on one of the 6 environmental objectives by answering the questions in the checklist included in the Commission Guidance and include the results as part of the description of each measure. This evaluation will be analyzed by the Commission prior to the approval of the MS RRP, and may request additional measures or the documentation used in the evaluation.
When allocating funds, each MS must ensure compliance with the principle by requesting the project executing agency to carry out an assessment of compliance with the DNSH Principle, which must be properly justified and documented.
Assess whether the project has a foreseeable impact on the objective:
1. If it has no foreseeable impact or is negligible: Simplified approach. A brief justification must be included.
2. IF it has impact: STEP 1: Identify the objectives that require a substantive evaluation
It does not require substantive evaluation if:
a) The measure indicates that your support for a climate change goal or an environmental goal has 100% support.
b) The measure contributes “substantially” to an environmental objective, in accordance with the Taxonomy Regulation.
In other cases, a substantive Evaluation must be carried out:
3. STEP 2: Substantive assessment of the impact on the DNSH Principle: It should be assessed whether the measure has a significant harm to the affected environmental objective.
- If the answer is YES: The DNSH Principle is affected in that objective. The measure is not approved.
- If the answer is NO: Substantive justification must be provided. This must be accompanied by documentation, studies and other guarantees to ensure and support the justification provided.
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The EQA Team
If there are modifications during project implementation, is the DNSH self-assessment valid?
In the event that projects have modifications during their implementation, it is possible that these may affect the self-assessment of compliance with the initial DNSH principle. In this case, the organization will adapt the self-assessment to verify that these modifications maintain compliance that the project does not cause significant harm to the environment.
EQA offers this service of validation of project modifications.
Aid programs that require accredited validation of self-assessment of compliance with the DNSH Principle
EQA is accredited to carry out the validation of the following programs:
- Order ICT/1466/2021. Primary projects of Industrial Research and Experimental Development in the field of integral actions of the industrial chain of the electric and connected vehicle.
- Order ICT/789/2021. Industrial Research and Experimental Development Projects in the field of the manufacturing industry. (Regulatory bases also of the call for Aid to strategic projects for the industrial transition of the pharmaceutical sector and the medical devices sector).
- Order ICT/789/2021. Industrial Research and Experimental Development Projects in the field of the manufacturing industry. (Regulatory bases also of the call for Aid to strategic projects for the industrial transition of the pharmaceutical sector and the medical devices sector).
- Order ICT/738/2022. Actions for the industrial strengthening of the agri-food sector within the Strategic Project for the Recovery and Economic Transformation of the Agri-food sector.
- CDTI aid programs. Projects approved in the PID, LIC or LICA lines of aid, which require the provision of a validation opinion of compliance with the principle of DNSH issued by an accredited entity.
- Order TED/1211/2022. Promotion of the circular economy in the company.
- Order ICT/713/2021. R&D&I projects in the field of connected industry 4.0 (Active Financing).
- Order TED/1211/2022. Promotion of the circular economy in the company.
- Order ICT/713/2021. R&D&I projects in the field of connected industry 4.0 (Active Funding).
- Order ITU/1434/2023. Integral action aids for the decarbonization of the manufacturing industry as part of the Industrial Decarbonization PERTE.
Contact us for more information about DNSH Self-Assessment Validation.
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