CYPRUS eco-innovation 2015 - European Commission

Eco-innovationinCyprus

EIOCountryProfile

2014-2015

Eco-InnovationObservatory

The Eco-Innovation Observatory functions as a platform for the structured collection and

analysis of an extensive range of eco-innovation information, gathered from across theEuropean Union and key economic regions around the globe, providing a much-neededintegrated information source on eco-innovation for companies and innovation serviceproviders,aswellasprovidingasoliddecision-makingbasisforpolicydevelopment.

The Observatory approaches eco-innovation as a persuasive phenomenon present in alleconomicsectorsandthereforerelevantforalltypesofinnovation,definingeco-innovationas:

“Eco-innovation isany innovationthatreducestheuseofnaturalresourcesanddecreasesthereleaseofharmfulsubstancesacrossthewholelife-cycle”.

Tofindoutmore,visitwww.eco-innovation.euandec.europa.eu/environment/ecoap

Any views or opinions expressed in this report are solely those of the authors and do notnecessarilyreflectthepositionoftheEuropeanCommission.

Eco-InnovationObservatoryCountryProfile2014-2015:Cyprus

Coordinatoroftheworkpackage:TechnopolisGroupBelgium

AnotetoReaders

Any views or opinions expressed in this report are solely those of the authors and do notnecessarilyreflectthepositionoftheEuropeanUnion.Anumberofcompaniesarepresentedasillustrativeexamplesofeco-innovationinthisreport.TheEIOdoesnotendorsethesecompaniesandisnotanexhaustivesourceofinformationoninnovationatthecompanylevel.

This brief is available for downloaded fromhttps://ec.europa.eu/environment/ecoap/cyprus

Tableofcontents

Summary...........................................................................................................................1

Introduction.......................................................................................................................2

1 |Eco-innovationperformance............................................................................3

2 |Selectedcirculareconomyandeco-innovationareasandnewtrends..............6

3 |Barriersanddriverstocirculareconomyandeco-innovationinCyprus..........10

4 |Policylandscape:towardscirculareconomyinCyprus...................................12

ANNEX:Policymeasuresaddressingcirculareconomyandeco-innovationsinCyprus......17

Eco-innovationinCyprus 1

Summary

Despite significant improvement, Cyprus continues to perform poorly in eco-innovation. Thecountry scored only 60 from 44 in the 2013 assessment (EU average = 100). This places thecountry just third from thebottom in theEU28 rankingofeco-innovative countries.Cyprus isheavily behind the EU28 average in eco-innovation inputs and activities and socio-economicoutputs. ItperformsclosetotheEU28averageinresourceefficiencyoutcomesandabovetheEU28averageinEco-innovationoutputs.

Eco-innovationinCyprusispredominantlyproducedbyindividualactors–researchinstitutesorenterprises. As such there are no distinct and mature eco-innovation sectors. Given thecountry’srichnaturalcapital,newdevelopmentsinrenewableenergiescouldalsopromoteeco-innovationactivities. Eco-innovation in the fieldofenergy is alsodrivenbyefforts to increaseenergy efficiency. The agricultural and food industries are also contributing to eco-innovativesolutions.Additionally,anumberofECfundedresearchand innovationprojects inthefieldofeco-innovationarecurrentlyunderimplementation.

Intermsofeco-innovationdrivers,thereisawiderangeofECsupportedfundingopportunitiesfor R&D which include eco-innovations. The country is successful in raising EU funds forresearch. Concerning R&D capacity, the InnovationUnion Scoreboard (2013) classifies Cyprusamong the ‘Innovation Followers’,which is a significantprogress in comparisonwithpreviousyears. Cyprus also benefits from its significant natural capital in renewable energies – solar,wind.

Regarding barriers, the present economic climate is inimical to investing in eco-innovation.Nevertheless, the financial situation isexpected to improveafter theexitof thecountry fromtheausterityplan,inMarch2016.TheCyprioteconomyisheavilydominatedbySMEs;hence,itexhibitsalackofsectoralconcentrationandinnovativebusinesses.Overall,theparticipationoffirmsinR&Dactivitiesislow.Furthermore,theresearchactivityinCyprusisoftennotrelatedtotheactivityoflocalbusinesses.


Introduction

Cyprus is already experiencing the impacts of climate change. Impacts include extensivedroughtsandassociatedissuesonwatersupply,biodiversityandforestfires(EIA,2015).Otherenvironmentalissuesincludeillegalhunting,invasivespeciesandlandusechange.Thestatusofthemarineenvironment1,whichhasaparticularenvironmentalandeconomicimportanceinthecountry, is evaluated as Good-High. Nevertheless, according to assessments of the stock offisheries,until2010fourofthemostcommercialfishspeciesinthecountrywereoverexploited.

Intermsofsocio-economicissues,severalelementsimposepressuresontheenvironment.Forexample,urbanisationand the increasing tourist inflowsand infrastructure (e.g.highwaysandrural roads) create a fragmentation of natural areas and loss of habitats. The island’s energyneedsare almost exclusively coveredbyoil imports (butwill bepartially replacedby recentlydiscoverednaturalreserves.Theheavyrelianceonroadtransportisalsoresponsiblefor23%ofthe CO2 emissions and contributes to air pollution. Finally, the steady increase in wasteproductionthathasbeencausedbytourismandthesignificanteconomicdevelopmentof thelast decades and e) given the size of the country, the considerable volume of uncontrolleddisposal.(EIA,2015;CyprusStrategicDevelopmentPlan,2007;MANRE,2011).

Concerning waste management, the per capita municipal solid waste generation is the thirdhighest in the EU (626 kg/cap in 2014),well above the EU average of 475 kg/cap. ThewastemanagementsysteminCyprusischaracterisedbythelackofappropriatefacilitiestotreatwasteorhazardouswaste(forexample,therearenowasteincinerationplantsinCyprus)resultinginhighlevelsoflandfilling.Nevertheless,morerecently,theamountsofresidualwastehavebeenreducedduetoincreasedlevelsofseparatecollectionofmainlypackagingandWEEEandenergyrecoveryfromwaste.

IntheR&Dsector,intensityremainslowat0.46%ofGDPin2012(InnovationUnion,2014)withaminorimprovementoverthepastdecade(forexample,theintensityincreasedjustby0.02%between 2011 and 2012). Enterprises lack the size and capacity to systematically developinnovative processes and new products,while strategically it ismore convenient for them toimport innovation from abroad. However, the contribution of high and medium-high techproducts to the trade balance increased by 31.88 % between 2007 and 2014 which is aspectaculargrowth.TheeconomyofCyprusisdominatedbytheservicessector,mainlytourism,transport and (until lately) finance. Manufacturing represents only around 7% of GDP. Mostcompaniesareconcentratedonlowvalueaddedproductsandservices,withouttakingriskstodevelopnewproductsorexpandinnewmarkets(DGResearchandInnovation,2014).

SimilartoothersouthernEuropeancountries,CyprushasbeenaffectedbytheEuropeandebtcrisis.Between2009and2012, theGDPdecreasedby2%annually,and furtherdecreasedbyalmost6%(Eurostat2014b),whileunemploymentclimbedfrom3.7%in2008to15.6%in2015(Eurostat,2014a).Theeconomicproblemsclimaxed in2013withthecountryrequiringanEU-IMF financial bailout. The dampened economic environment negatively affects public andprivateinvestmentineco-innovation.Nevertheless,aftertheisland’sexitfromthebailoutplaninMarch2016, the financial climatehas improvedwith aprojected increaseofGDP for 2016(ECFIN,2016).

1TheevaluationIbasedonbasedontheimplementationoftheWaterFrameworkDirective(2000/60/EC)andphysico-chemicalparameters,alongwithvariousmonitoringprogramssuchastheMedPOLofUNEP/MAPandImpactEnvironmentalAssessments.


1 |Eco-innovationperformance

TheanalysisinthissectionisbasedontheEU-28Eco-innovationscoreboard(Eco-IS)fortheyear2015.ViaitscompositeEco-innovationindex,producedbytheEco-InnovationObservatory(EIO),Eco-IS demonstrates the eco-innovation performance of a country compared with the EUaverageandwiththeEUtopperformers.Eco-IS isbasedon16 indicators,aggregatedintofivecomponents: eco-innovation inputs, activities and outputs, environmental and socio-economicoutcomes.

Figure1EU27Eco-innovationscoreboard2015,compositeindex

Source:EIO,2016

Cyprus continues to perform poorly in eco-innovation as illustrated in Figure 1. The countryscored60 in2015comparedtoascoreof44 inthe2013assessment(EUaverage=100).ThisplacesthecountryjustthirdfromthebottomintheEU28eco-innovationranking.Thisisaslightimprovement from, in comparison to the 2013 assessmentwhen itwas placed in the secondfrom last position. Nevertheless, Cyprus remains below severalMember States with a smallpopulation,suchasEstonia,LatviaandMalta.

Figure2belowshowstheperformanceofCyprus ineachofthefivecomponentsoftheEco-IScompositeindex.CyprussignificantlylagsbehindtheEU28averageineco-innovationinputsandactivities and socio-economic outputs. It performs close to the EU28 average in resourceefficiency outcomes and above the EU28 average in Eco-innovation outputs. The paragraphsbelowanalysetheperformanceofCyprusforeachofthefiveindicators.

Eco-innovationinputs

The eco-innovation input index is based on the national indicators of the government’senvironmental and energy R&D appropriations and outlays, R&D personnel, and cleantech


investment.Cyprusranks lastwithascoreof14(EUaverage index100).Thescore indicatesaslightimprovementontheperformancecomparedtothe2013assessments,whenthescoreofCypruswas13.

In2014,totalgovernmentenvironmentalandenergyR&Dappropriationsandoutlaysamountedto0.0025%ofGDPwithanEUaverageof0.04%(sameasin2012).ThetotalR&Dpersonnelandresearchers forCyprus in2014counted for0.35%of totalemployment (EUaverageof1.21%)and dropped by approximately 0.06% compared to 2012. The economic crisis has deeplyimpactedthecapacityofthepublicsectortoemployR&Dpersonnel.

Noearlystagegreeninvestmentswerereportedduringtheperiod2010-2015.Consideringthatthetotalinvestmentsinresearchandinnovationarelimited,reachingonlyabout0.46%ofGDP(2013) it is unlikely that investments in eco-innovation projects would improve significantlydespite the increased contribution of high- and medium-high-tech products to the tradebalance.

Figure2Componentsoftheeco-innovationcompositeindexforCyprus,2015

Source:EIO,2016

Eco-innovationactivities

Theeco-innovationactivitiesindexoftheEco-ISisbasedonthestatisticsofISO14001certifiedcompaniesandofbusinessinnovationactivitiesaimedatmaterialefficiencyandenergysaving.CyprusscoresbelowtheEU28averageandcontinuestobesecondfromthebottom.AccordingtoEco-IS,thepercentageoffirmshavingimplementedmaterialefficiencyinnovationswas0.06of all firms (EU average 0.1%). The percentage for energy saving was 7.62% of all firms (EUaverage12.92%).Finally, in2014,thenumberofISO14001certifiedorganisationsinCyprusin2014was55(32in2012)translatinginto64.10registeredorganisationpermillionofinhabitants(53.25in2012).


Eco-innovationoutput

CyprusscoresabovetheEUaverageoneco-innovationoutput.In2012,onlyoneeco-innovationrelated patent was reported, whereas no patterns were reported in 2010. The poorperformance reflects the relatively limited available resources and the difficulty of translatingresearch into technological innovation. Cyprus is a very good performer in eco-innovationrelationpublications,withasignificantincreasefrom12.76publicationspermillioninhabitantsin2012to38.46in2014.ThisperformanceisconsiderablyhigherthantheEUaverage(16.20).Whenalsotakingintoaccounttheremarkableimprovementfrom2012,itcanbeconcludedthatthereisanincreasinginterestoneco-innovationbytheacademic/researchcommunity.

As regards to eco-innovation relatedmedia coverage (measured as the number of hits in allelectronicmediacoveredby"MeltwaterNews"withkey-word"Eco-innovation"translatedinallEU-28 languages),Cyprussignificantly improved itspositioncomparedtothe2013assessmentandscoredabovetheEUaverage.Specifically,Cyprusscorein2015was150(EUindex100).Thisisaremarkableimprovementcomparedto2013whentheislandscoredamere59points.

Resourceefficiencyoutcomes

The resource efficiency outcome index is based on combined national statistics on domesticmaterial productivity, domestic water productivity, inland energy productivity, and GHGemissions intensity. Cyprus is positioned relatively close to the EU28 averagewith an overallscoreof77 (EU index100), showingaconstant increase from74 in2013and66 in2012.Thecountryperformanceinthisindexisimpactedbytherelativelyhighconsumptionoffossilfuels(henceincreasedGHGemissions),usedamongothers,fortheproductionofelectricity.

In2013,materialproductivity (GDP/DMC) reached1.45€/kg (1.09€/kg in2011)when theEUaveragewas1.93Euro/kg. Incomparison inMaltamaterialproductivity in2013was2.25€/kg(3.16€/kg in2011), inEstonia0.62Euro/kg (0.80Euro/kg in2011)and Latvia0.83€/kg (0.73€/kg in2011).The latter indicatesan improvement incountrieswith lowpopulationexceptofLatvia and Cyprus. Water productivity, measured as GDP generated by domestic waterconsumption,was6.27€/m3 in for theperiod1996-2005,equal to49%of theEU27average.Cyprus’water footprint in thesameyearwasapproximately1887m3percapita.Thedataonwaterproductivitywasnotupdatedandisthesameusedinthe2013assessment.

Intheenergyproductivityof2013(GDPgeneratedbydomesticenergyuse),CyprusperformedabovetheEUaverage,withascoreof105%(slightlybelowtheEUaveragein2011withascoreof 97%). The country’s productivity reached 8.72 €/ton (from 7.77 €/ton of oil equivalent in2011).Finally,GHGemissionsintensity in2013(amountsofGHGemissionsgeneratedperunitofGDP)wasat0.43kgofCO2equivalent/GDP(from0.45kgofCO2equivalent/GDP in2011),significantlyabovetheEU28averageforthesameyear(0.34kgCO2e/€).

Socio-economicoutcomes

In2014,Cyprus'performanceinsocio-economicoutcomescontinuedtobetheweakest intheEUbutwithaslight improvementcomparedto2012.SpecificallywithanEUindexof100,thecountry’s scorewas 17 (13 in 2012).Notably in 2011, the countrywas above the EU averagewith a score of 120. This fluctuation ismostly the result of erosion in eco-innovation exports(whichwere possibly partially counterbalanced by the increased share of high- andmedium-high-techproducts to the tradebalance) and a reduction in thepeople employed in the eco-innovationsectorasaresultoftheoverallimpactoftheeconomiccrisis.


In 2014, eco-industry exports continued to correspond to 0.12% of all exports but with anincreaseshareattheEUlevel(0.72%in2014from0.59%in2012).Employmentineco-industriesincreased slightly in 2014 to 0.12% from 0.05% of total employment across all companies in2012.

2 |Selectedcirculareconomyandeco-innovationareasandnewtrends

Eco-innovationinCyprusispredominantlyproducedbyindividualactors–researchinstitutesorenterprises.Assuch,therearenodistinctandfullydevelopedeco-innovationsectors.

Giventhecountry’srichnaturalcapital,newdevelopmentsinrenewableenergiescouldfurtherpromote eco-innovation activities. In Cyprus, electricity from renewable sources is mostlypromotedthroughacombinationofasubsidyscheme,premiumtariffaswellasanetmeteringscheme.Thecountryaimstoincreasethecontributionofrenewableenergysources(RES)to13%ofthetotalenergyconsumptionby2020.In2012,thesharereached7.7%comparedto6.8%in 2010 (EEA, 2015). The country performs well in the use and construction of solar waterheatingsystems;92%ofhouseholdsareequippedwithsolarwaterheatersand53%ofhotelshaveinstalledlargesolarwaterheatingsystems.Cyprusaimstogenerate13%ofthegrossfinalenergyconsumptionfromrenewableenergysourcesby2020.(EREC,2009). Eco-innovationinthefieldofenergyisalsodrivenbyeffortstoincreaseenergyefficiency.SpecificallyCyprusaimsat an increase of 14.3% (463 ktoe) in energy savings in the projected primary energyconsumptionof theyear2020.Theenergy savings, reached12.3% in2012compared to4.3%thatwerein2011(EEA,2015).

A number of EC funded research and innovation projects in the field of eco-innovation arecurrently under implementation. In particular, the Life+ instrument supported a total of 11projects,whichcoverissuessuchas:

• waste management (demonstrating a sustainable conversion technology for energygenerationandasustainableprocessesformanagingwasteandwastewater)

• industrial waste (the demonstration of an environmentally and financially sustainableprocedureforthemanagementandtreatmentofreturned,expireddairyproducts)

• watermanagement at the scaleof the river basin (treating and valorising greywater,strengtheningthescientificbasisofwatermanagementprogrammes, includingcriteriadevelopment forpollutantswithahighpotential impactonenvironmentalqualityandbiodiversity)

• airquality• climate change (demonstrating a sustainable conversion technology for energy

generation,andsustainableprocessesforwasteandwastewaterhandling)• industry-production (demonstrating alternativemethods for the production of bricks,

ceramicsandcementusingwastequarryslurryasarawmaterial)


Theprojectsarebeingimplementedbynationalauthorities,universitiesandalargeenterprise(VivartiaCyprus)andwillrunforbetween24and42months.(Life+Program,2014).Inaddition,3 projects were completed in the areas of WEEE (Waste from Electrical and ElectronicEquipment),waterqualityimprovementandwastewatertreatmentinthewinesector.

Moreover,in2012theNER300fundingprogrammeimplementedbytheEuropeanCommissionwith thecollaborationof theEuropean InvestmentBank (EIB)awardedHeliosPower inCypruswith€46.6M.Theprojectisalarge-scalestirlingdishpowerplantwithatotalinstalledcapacityof 50.76MWe, located on the eastern side of Cyprus, near the city of Larnaca. The plant isexpectedtohave16,920Stirlingdishunitsthatwillgenerate115,936,000kWhperannum.Thetotalfieldarearequiredfortheprojectisaround200ha.Highvoltage132kVpowerlines,whichrunalongthesouthernboundaryofthesite,willbeusedtoconnecttheplanttothenationalgrid.The agricultural and food industries are also contributing to eco-innovative solutions: wastetreatmentinoliveoilproduction;compostproducedfromrecycledplants(suchaslawn,gardenclippings, tree leaves, vine leaves etc.); biological waste treatment (that turns biodegradablewaste into either high quality compost or Solid Recovered Fuel); advanced glasshouse forproducingexoticflowers;organicandenergyefficientproductionofwineandoliveoiletc.(EIO,2016).


RiverlandDiaryBioFarm

Riverland is an Organic Diary BioFarm that produces goat and sheep products like Hallomicheese(Cypriottraditionalcheese),fetacheese,KefirandAirani,yogurt,butalsovegetables.The animals are fed with Certified Organic Non GMO products or they are let to graze inmeadows. Riverland Farm responds to site-specific farming and crop conditions. Theproductionprocessintegratescultural,biological,andmechanicalpracticesthatfostercyclingof resources and maintain ecological balance and contribute to the preservation ofbiodiversity.Theuseofsyntheticpesticidesandchemicalfertilizersinthefarmisbanned.Themeadows are fertilized by the Organic Compost that is made in the farm. The farm alsoorganisesschoolthatincludearchery,horseriding,kayakandclimbing.

Keywords:Organicfarming,ecotourism,education

Reference:www.producedincyprus.com/2014/07/riverland-diary-bio-farm-your-first.html

Contacts:[email protected]

Source : Produced in Cyprus


Mediterranean Cooperation in the Treatment and Valorization of OliveMill Wastewater(MEDOLICO)

MEDOLICO isaprojectcarriedout jointlybyMediterranean institutions fromCyprus, Israel,Jordan, ItalyaswellasaPortuguese Institution.Cyprus, isparticipating throughtheNIREASInternationalWater researchCenter, an institutionof theUniversity of Cyprus. Theprojectaims to prevent and reduce the environmental risk presented by Olive Mill Wastewater(OMW). MEDOLICO will evaluate the performance of various promising OMW treatmenttechnologies.Further, itwilldevelopuniformtreatmentproceduresaccordingtothesoughtpurpose(waterforirrigation,recyclingintotheolivemillmanufacturingprocess,etc.),whichwillthenbepilottested.Therewillbeafurtherevaluationofthepotentialforvalorisationofthe collected by-products so that a solution can be provided that sustainably protect theenvironment heritage of the Mediterranean regions while remaining cost-efficient for theolivemills.TheprojectisfundedbytheEuropeanNeighborhoodandPartnershipInstrument(ENPI) intheframeworkofthecross-bordercooperationprogrammefortheMediterraneanSeaBasin.

Keywords:agriculture,waterpollution,cross-bordercooperation

Website:www.medolico.com

Contacts:[email protected]

Source:MEDOLICO


3 |Barriersanddriverstocirculareconomyandeco-innovationinCyprus

Eco-innovationdrivers

Cyprusdoesnot have a cohesive legislative framework for the support of eco-innovation andeco-industries. However, there are both supply and demand factors that play a role in thegrowthof eco-innovations. In termsof supply, there is awide rangeof EC supported fundingopportunities for R&D that also support eco-innovations. On the demand side, the Cypriotgovernment’s environment related regulations and commitment to solutions for pressingproblems like water and energy shortages and excess of waste and air pollution are alsopositivelyimpactingthegrowthofeco-innovations.

ConcerningR&Dcapacity,theInnovationUnionScoreboard(2015)classifiesCyprusamongthe‘InnovationFollowers’,which indicatessignificantprogresscomparedwithpreviousyears.Thegovernmenthasalsointroducedasetofmeasurestoencouragestrongerindustryparticipationinresearchandinnovation.

Thecountry issuccessful inraisingEUfundsforresearch.UptoFebruary2012,approximatelyone third of the EU funds collected through the EU Framework Programme for Research andTechnological Development (FP7) were directed to SMEs (EUR 18.7million out of EUR 52.55million)(DGResearchandInnovation,2014).

Overthelastdecade,CyprushasprogressedatapacesimilartotheEUaverageannualgrowthin terms of percentage of public expenditure in R&D, the relative share of new doctoralgraduates of population aged 25-34 or the relative share of international scientific co-publications.(InnovationUnion,2014).

Cyprus also benefits from its significant natural capital in renewable energies – solar,wind –,andinnovationinagricultureandthefoodindustry.(Re-shapingProject,2011).

Barrierstoeco-innovations

On the other hand, the development of eco-innovation in Cyprus is hindered by a series ofstructuralfactors.

Much like in Greece, the present economic climate is inimical to investing in eco-innovation.(Lange,2014).Public spending forR&Dwasputonhold,while traditionallybusinessspendingforR&DinCyprus is low.Nevertheless,thefinancialsituationisexpectedto improveaftertheexitofthecountryfromtheausterityplaninMarch2016.

ThelatterphenomenonisrelatedtothefactthattheCyprioteconomyisheavilydominatedbySMEs; hence, it exhibits a lack of sectoral concentration and of a critical mass of innovativebusiness (Cyprus Strategic Development Plan 2007). This, in turn, reduces employmentprospectsforR&Drelatedhumanresourcesandweakenstheimpactofrelevantpublicpoliciesand investments ineducation.Consequently,humanresourcesavailable for researchactivitiesin thecountry is limiteddespite the largenumberof tertiaryeducationgraduates (InnovationUnion, 2014). Due to the lack of large companieswith involvement in R&D activities and the


unfavourableenvironment for research ingeneral, the research capital isusually absorbedbyothercountries.

Overall,theparticipationoffirmsinR&Dactivitiesisalsolow.Forexample,in2011theshareofbusiness funding in the total R&D expenditurewas only 14.4%,whereas the EU averagewas61.5%.In2008,thissharewas22.8%indicatingadecreasingtrend(DGResearchandInnovation,2014).

Policyand fundingmeasuresandmechanisms forpromotingeco-innovation inCyprusdependtoasignificantextentonco-financingthroughtheEUstructuralfunds.InnovativeSMEs,evenintheleadingeconomicsectorsofthecountry,lackthecriticalmasswhichwouldfacilitatesmartspecialisationandthedevelopmentofsectorswithinternationalcompetitiveadvantageineco-innovation.Inparallel,inthelastdecade,asignificantincreaseofpublicR&Dfundinghastakenplaceacrossvariousfieldsbutnotinareaswhereanexcellencecouldbeexpected(DGResearchandInnovation,2014).

The research activity in Cyprus, is often not related to the activities of local businesses. Anexception to this trendare the ICTenterprises,whichareveryactive indeveloping innovativeapplications and can also cooperate with companies and cooperate with other sectors todevelopinnovativesolutions(DGResearchandInnovation,2014).

Finally, access to venture capital and private sources of funding is also difficult and oftenprohibits the involvement of SMEs in research projects. The range of financial instruments isverylimitedtosupportasatisfactorydevelopmentofeco-innovationintheprivatesector.


4 |Policylandscape:towardscirculareconomyinCyprus

Policyandfundingmeasuresandmechanismspromotingeco-innovativeresearchinCyprusstilllargely dependon co-financing through the Structural Funds. Themajority of thesemeasuresaddress the development of new research infrastructure, the enhancement of collaborationsamongresearchorganisationsandtheprivatesector,thefacilitationoftechnologytransfer,waswell as the strengthening and enhancement of training, career development andmobility ofresearchers. It shouldbenoted that thepolicyand fundingmeasureshaveageneric focusonclimatechangeandsustainabilityissuesandlesssooneco-innovation.(DGResearch,2013).

In September 2013, a National Committee on Research, Innovation and TechnologicalDevelopment (NCRITD) was set up with the aim to review the national R&D system and toprovide relevant recommendations. As a result, a planwas drawn up to integrate the SmartSpecialisationStrategy intheutilisationofEuropeanStructuralandInvestmentFunds(ESIF) inthefollowingsectors:tourism,energy,construction,shipping,health,ICTandtheenvironment(DGResearchandInnovation,2014).

TheEuropeanStructuralandInvestmentFunds(ESIF)fortheperiod2014-2020areexpectedtoresult in an establishedR&D strategy (ERA, 2014). The funding thatwill be allocated throughESIFwillbespentthroughtheDESMI2014-2020.DESMIistheNationalFrameworkProgrammeforR&IdesignedandimplementedbytheResearchPromotionFoundation(RPF).Inparallel,theTechnology Service of Ministry of Energy, Commerce Industry and Tourism will implementschemesforspecificallypromotingbusinessinnovation.

RPF funded over €25 million worth of research projects and supporting activities, and thebudget is expected to grow in the coming years according to the following five strategiccategories(InvestCyprus,2016):

• Strategic&Multi-thematicResearchandDevelopment• GrowthofNationalScientific&ResearchHumanCapital• AppliedResearchDevelopmentandEnterpriseInnovation• ResearchInfrastructureDevelopmentandLargeScaleInvestments• InternationalNetworkingandCollaborationinthefieldofR&DandInnovation

Thefundedresearchactivities,includetheEnergy,EnvironmentandWaterResearchCenter(EEWRC)whichcarriesoutresearchintheareasofSolarEnergyandDesalination,ClimateChangeandImpact,EnvironmentalResearchandMonitoring,WaterResearchandManagementandSustainabilityandBuildEnvironment.

An Action Plan forGreen Public Procurement in Cyprus was issued in September 2012. TheAction Plan describes the framework and the targets of the Programme for the period 2012-2014.(BuySmartProject,2014).

In addition, an Energy Audit System has been established. Law 201(I) 2012 amended theprevious framework in relation to energy performance of buildings (transposing theEPBD/Directive2010/31/EC)andsettheregulatoryframeworkforenergyauditinginCyprus.


In Cyprus, renewable sources of energy are promoted through subsidy combinedwith a netmetering scheme RES-Legal, 2016). Renewable energy receives priority in the use of the gridwhosedevelopment is amatterof centralplanning.Overall,plantoperatorsare contractuallyentitledandwithoutdiscriminationtotheconnectionofarenewableenergyplanttothegrid.Atthemoment,heatandcoolingaswellastransportfromrenewablesourcesisnotsupported.Ingeneral,somemeasurestoincreasetheuptakeofrenewablesinthecountryarenotfeasibleduetothesmallsizeoftheisland.

Furthermore,anewframeworkofvehicleexcisedutywasinstalledattheendof2012.ThenewsystemcalculatesthedutyonthebasisoftheCO2emissionsofthevehicles.

Finally,in2013theCypriotEnergyRegulatoryAuthority(CERA)startedreceivingapplicationsfornet-meteringinstallations.Thegoalistopermitaround50.000to60.000householdstoinstallnet-meteringsolarprojectsinthenexttwotothreeyears.(PVMagazine11/9/2013;ΕνεργειακοΓραφείοΚυπρίωνΠολιτών,2013).

Scheme to encourage clusters and business partnerships in green and advanced technologyinvestments

Α scheme to encourage the creation of clusters and business partnerships in green andadvancedtechnologyinvestmentswaslaunchedin2015.Theaimofthisschemeistopromotetechnologiesandprocesses thatwill enhance resourceefficiency, reducepollutionandwaste,andcontributetoappropriatewastemanagementandrecycling.Thedurationoftheapplicationofthismeasureisfor5yearsandistargetingallindustrialandbusinessentitiesandparticularlySMEsintheterritoryofCyprus.

Keywords:Resourceefficiency,wastemanagement,recycling,pollution

Source:Ecologic (2015)MeasureSynthesis,Support for IndustrialSymbiosis -A framework forMemberStatestosupportbusinessinimprovingitsresourceefficiency


ReferencesCyprusMail6/11/2013,Oliveoilandpostofficereceiveinnovationawards.Availableat:http://cyprus-mail.com/2013/11/06/olive-oil-and-post-office-receive-innovation-awards/

CyprusStrategicDevelopmentPlan,2007.Availableat:http://www.structuralfunds.org.cy/default.aspx?articleID=784

EnvironmentalPerformanceIndex(EPI)2014.Availableathttp://epi.yale.edu/epi/country-rankings

Life+ProgramCyprus2012.Availableat:http://ec.europa.eu/environment/life/countries/documents/cyprus_en_dec12.pdf

MaroulisG.,2013,AssessmentofClimateChangePoliciesintheContextoftheEuropeanSemester:CountryReportCyprus.Availableat:http://ec.europa.eu/clima/policies/g-gas/progress/docs/cy_2013_en.pdf

SolivalProject,2010Sustainablemanagementofagro-industrialwastes:Valorisationandsolar-Fentonpost-treatmentofolivemilleffluents.Availableat:http://www.eng.ucy.ac.cy/solival/pdf/D15.pdf

TheCyprusInstitute,2011,ClimatechangeandimpactsintheEasternMediterraneanandtheMiddleEast.Availableonline:www.cyi.ac.cy/.../238_9c7a9ac6023f0892d40bb3e8f03d50d7.html

ΕλεγκτικήΥπηρεσίατηςΔημοκρατίας(2012):Προσαρμογήστιςκλιματικέςαλλαγές.Αντιμετωπίζονταςσήμερατιςπροκλήσειςτουμέλλοντος.(RepublicofCyprusAuditingAgency(2012):ClimateChangeAdaptation.Confrontingthechallengesoftomorrow.)Availableonline:http://theopemptou.com/portal/index.php/downloads25/doc_download/551-elegktiki-ypiresia-tis-dimokratias-prosarmogi-stis-klimatikes-allages-antimetopizontas-simera-tis-prokliseis-tou-mellontos

ΕνεργειακοΓραφείοΚυπρίωνΠολιτών(CyprusEnergyAgency),2013,ΔελτίοΤύπουΠρώτααποτελέσματατηςπιλοτικήςεφαρμογήςσυστήματος“Netmetering”σεδύοκατοικίεςσταπλαίσιατουσυγχρηματοδοτούμενουέργουELIH-MED“EnergyEfficiencyinLowIncomeHouseholdsintheMediterranean”(PressRelease.FirstResultsfromthepilotimplementationofNet-meteringintworesidencesintheframeofELIH-MED).Availableat:http://www.cea.org.cy/edit_news/NEWS/2013/06/press_release_net_metering.pdf

ΥπουρείοΕμπορίου,ΒιομηχανίαςκαιΤουρισμού(MinistryofCommerce,IndustryandTourism),2013,ΣχέδιοΧορηγιώνγιαΕνθάρρυνσητηςΧρήσηςτωνΑνανεώσιμωνΠηγώνΕνέργειαςκαιτηςΕξοικονόμησηςΕνέργειας(SubsidiesforthePromotionofRenewableEnergySourcesandEnergyEfficiency).Availableat:

http://www.google.be/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CC4QFjAA&url=http%3A%2F%2Fwww.cie.org.cy%2FmenuGr%2Fpdf%2Fsxedia-xorigiwn%2FSxedio_Xorigiwn_Fusika_Proswpa_2013.pdf&ei=JxQ8U_bxAceLOIGOgfAK&usg=AFQjCNGXIZgdpGYtS4Iy0krxKRFRSa6gFA&sig2=7yMjMpaapVMmJjSBZ8U0rQ&bvm=bv.63934634,d.ZWU

BakasI.2013,MunicipalwastemanagementinCyprus.ETC/SCP.


BuySmartProject,2014,Cyprus.Availableat:http://www.buy-smart.info/media/file/1762.Procurement_Standards_Cyprus.pdf

CyprusStrategicProgram“SustainableDevelopmentandCompetitiveness”,2013.Availableat:http://www.structuralfunds.org.cy/uploadfiles/2007CY16UPO001_ANN_I_part1.pdf.(ΕπιχειρησιακόΠρόγραμμαΑειφόροςΑνάπτυξηκαιΑνταγωνιστικότητα2007-2013).

DGResearchandInnovation2013,Researchers’ReportCyprus.Availableat:http://ec.europa.eu/euraxess/pdf/research_policies/country_files/Cyprus_Country_Profile_RR2013_FINAL.pdf

DGResearchandInnovationDGResearchandInnovation2014,Researchers’ReportCyprus.Availableat:http://ec.europa.eu/euraxess/pdf/research_policies/country_files/Cyprus_Country_Profile_RR2014_FINAL.pdf

ECFIN,2016,EconomicoutlookCyprus,availableat:http://ec.europa.eu/economy_finance/eu/countries/cyprus_en.htm

Eco-innovationObservatory(EIO),2016,GoodpracticesinCyprus.Availableat:http://www.eco-innovation.eu/index.php?option=com_labels&view=label&label=cyprus-&Itemid=135

EIA,2015,NationalStateoftheEnvironmentReport(SoER)-Cyprus,availableat:http://www.eea.europa.eu/soer-2015/countries/cyprus

EnergyEfficiencyWatch,2013,CountryReportCyprus.Availableat:http://www.energy-efficiency-watch.org/fileadmin/eew_documents/Documents/EEW2/Cyprus.pdf

EnvironmentalPerformanceIndex(EPI)2016.Availableathttp://epi.yale.edu/epi/country-rankings

EuropeanRenewableEnergyCouncil(EREC),2009,RenewableEnergyPolicyReview,Cyprus.Availableat:http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/CYPRUS_RES_Policy_Review_09_Final.pdf

EuropeanResearchArea(ERA),2014,Factsandfigures:Cyprus.Availableat:https://ec.europa.eu/research/era/pdf/era_progress_report2014/country_fiches/era-cy.pdEurostat,2016a,HarmonisedUnemploymentRate.Availableat:http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1

Eurostat,2016bb,RealGDPgrowthrate.Availableat:http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&plugin=1&language=en&pcode=tec00115

InnovationUnion,2013,ResearchandInnovationPerformanceinEUMemberStatesandAsssociatedCountries.Availableat:http://ec.europa.eu/research/innovation-union/pdf/state-of-the-union/2012/innovation_union_progress_at_country_level_2013.pdf

InvestCyprus,2016,ResearchandDevelopment.Availableat:http://www.investcyprus.org.cy/en/growth-sectors/cyprus-investment-sectors/research-and-technology-sector


Life+ProgramCyprus2014.Availableat:http://ec.europa.eu/environment/life/countries/documents/cyprus_en_nov14.pdf

MinistryofAgriculture,NaturalResourcesandEnvironment(MANRE),2011,NationalProjectionsonGreenhouseGasesEmissions.PoliciesandMeasuresfortheReductionofGreenhouseGasesEmissions.Availableat:http://www.moa.gov.cy/moa/environment/environment.nsf/724D802BD314A271C22579410036A4A3/$file/PROJ%202011.pdf

PVMagazine11/9/2013,Cyprusaimsfor60,000residentialnetmeteringinstallationsby2016.Availableat:http://www.pv-magazine.com/news/details/beitrag/cyprus-aims-for-60-000-residential-net-metering-installations-by-2016_100012693/#axzz2xiyUYya3

Re-shapingProject,2011,RenewableEnergyPolicyCountryProfiles.Availableat:http://www.ecofys.com/files/files/ecofys_re-shaping_country_profiles_2011.pdf

RES-Legal,2016,CountryprofileofCyprus.Availableat:http://www.res-legal.eu/search-by-country/cyprus/


ANNEX:Policymeasuresaddressingcirculareconomyandeco-innovationsinCyprus

Groupofpolicymeasures Typeofpolicymeasure

Specificmeasure

Pleaseprovidereferencetoorbriefsummaryofspecificmeasures(national,regional)

addcellsifnecessary

Focusofpolicymeasure(tickifrelevant)

Genericfocusoneco-

innovation

Resourceefficiencyimprovement

Energyefficiencyimprovement

Reductionofemissionsincl.CO2

Otherrelevantareas(e.g.renewableenergy,etc)

SUPP

LYSIDEFO

CUS

Equity/businesssupport

Venturecapitafunds

-

-

-

Publicguaranteefunds

Jeremie co-financing product a new financial product implemented in theframeworkoftheadoptionoftheCommunityInitiativeJEREMIEinCyprusandinaccordancewithwhich theBankofCyprus, theGovernmentof theRepublicofCyprus and the European Regional Development Fund (ERDF) co-finance newloans for amounts of up to €100,000 to small and micro enterprises whoseimmediate objective is to support, expansion and strengthening of thosebusinesses. These new loans will be available under particularly favourableterms, in relation to the repayment period, the grace period, the collateralrequiredandinrelationtopricingpolicy.

X X

SupportforR&Dinpublicsectorandindustry

R&Dfunding

EurostarsCyprus,SpecificActionofthe«EUREKACyprus»Programme,supportsthe participation of Cypriot organisations in successful EUROSTARS projects.The «EUROSTARS Cyprus» Specific Action, aims primarily to enhance thecompetitiveness of Cypriot R&D Performing SMEs, the networking and co-operationwithorganisationsfromabroad,thedevelopmentofneworimprovedinnovative products, processes or services through their participation ininternational industrial R&D Projects.http://www.research.org.cy/EN/int_cooperation/eurostars/specific_action.html

X X X X X


Collaborativegrants

SustainableDevelopmentProgramme

TheSustainableDevelopmentProgrammemanagedbytheResearchPromotionFoundationconsistsoffourActions:NaturalEnvironment;UrbanandBuiltEnvironment;AgricultureandAnimalFarming;FisheriesandAquaculture.Energyisaddressedaspartofthese:theUrbanandBuiltEnvironmentAction,forinstance,includesresearchonenergyefficiencyinbuildings.

TechnologyProgramme

TheTechnologyProgramme,managedbytheResearchPromotionFoundation,supportsresearchinanumberofscientificfieldsthatareconsideredfundamentaltotheimprovementofthestate-of-the-arttechnology.TheprogrammesupportsprojectswithinthethematicareasofMaterials,Nanotechnology,Energy,AppliedSciencesandEngineering.http://setis.ec.europa.eu/energy-research/country/cyprus

InformationandCommunicationTechnologies”Programme

Themainobjectiveofthe“InformationandCommunicationTechnologies”Programmeistoincreaseproductivityandenhancethecompetitivenessofthebusinessworldinalleconomicsectorsandmoreovertoimprovetheservicesprovidedtocitizens,communities,enterprisesandthepublicsectorservices.ParticularemphasisisplacedonthedisseminationofknowledgefortheefficientuseofICTandtheirincorporationinotheractivitiessuchaseducation,health,culture,governance,commerceetc.Additionally,theProgrammeintendstoachievehighlevelsofexploitationofthesubstantiallycompetentscientifichumanresourcesofCyprus,aswellasthecreationofcollaborationnetworksbetweentheacademicandresearchorganisationsandtheenterprises.

http://www.research.org.cy/EN/national_programmes/nfprtd200920010/pillar_i/prinfo/index.html

TechnologyServiceofMinistryofEnergyCommerce,IndustryandTourism(MECIT)

TheTechnologyServiceofMinistryofEnergy,Commerce,IndustryandTourismimplementsschemesspecificallytopromotebusinessinnovation.The

X

X


TechnologyServiceundertookanintenseinitiativein2011topromotebusinessinnovationthroughthedevelopmentofaprogrammetosupportbusinessinnovationwithaviewtoencouraginglocalenterprisestodevelopinnovativeproductsandservicesontheirownorincooperationwithotherenterprisesorresearchcentres.TheoverallbudgetisEUR4million;themaximumfundingperprojectisEUR150,000.

Theintentionistoimplementanewbusinessinnovationprogrammeovertheperiod2014-2020,withincreasedaidamounts.

R&Dinfrastructure

FrameworkProgrammeforresearch,technologicaldevelopmentandinnovationof the Research Promotion Foundation: New Multi-beneficiary InfrastructureActionofthe‘NewInfrastructure’Programme.Totalbudgetavailableis2millionEUR. The action aims at the development of new research infrastructure inCyprus, with projects focusing on (among others) sustainable development,includingthenaturalenvironment,theurbanandbuiltenvironment,agriculture,farming,fisheryandaquaculture,aswellassocialandeconomicsustainability

X

Fiscalmeasures

TaxincentivesforR&Dandstart-ups

- Tax deductions apply to both individuals and companies, with regard toscientific and research expenditure, expenditure for the acquisition of patentrights,orrightsforuseofpatent.

TaxincentivesforR&Dpersonnel

Education,trainingandmobility

Tailoredtrainingcoursesforcompanies,entrepreneurs

The Human Resources Development Authority of Cyprus implements LifelongLearningProgrammestargetingSMEsandentrepreneurs

Advise/consultingforstartups,companies,entrepreneurs

The Ministry of Commerce, Industry and Tourism has established theDepartment of Οne-Stop-Shop for setting up a business, which providesinformationandguidancetopotentialinvestors,aswellasaftercareservicetoexistinginvestors.


-TheMinistryofCommerce,IndustryandTourismhasestablishedtheForeignInvestorsServiceCentre,whichaimsatpromotingCyprusasaninternationalbusinessandR&Dcentre.

Placementschemesforstudents

UniversitiesinCyprusparticipateintheERASMUS-MUNDUSstudentexchangeprogramme.-SelectedCypriotSMEsparticipateintheLEONARDOprogramme,offeringstageopportunitiestostudents

SupportforR&Dworkersrecruitments

Networksandpartnerships

Competencecentres,clusters,science-technology

parks

TheCyprusInstitute:TheCyIisbeingdevelopedbyestablishingresearchcenterswhichaddresschallengingproblemsthatareimportantatboththeregionalandinternational levels. Its research centers are developed in partnership withleading institutions in the respective thematic areas. The Energy, Environmentand Water Research Center (EEWRC) is developed in partnership with theMassachusetts Institute of Technology, the Science and Technology inArchaeology Research Center (STARC) in partnership with the Centre derechercheetde restaurationdesmuséesdeFrance (C2RMF),headquartered intheLouvreandtheComputation-basedScienceandTechnologyResearchCenter(CaSToRC)inpartnershipwiththeUniversityofIllinois.

X X X X

Technologyplatformsandinnovationnetworks

TheERMISResearchandIncubatorCentre(establishedin2003)issponsoredby A.S. Cyprus College and supported by RTD Talos, the Science andTechnology Park of Crete and Spidernet Services; it aims at providinginfrastructure and services towards nurturing and transforming innovativeideasintosuccessfulbusinessventures,encouragingspin-offsfromresearch/academic establishments through the exploitation of research results, usingnewtechnologiesdevelopedatthe incubatortoupgradeexistingproductionunits,andbuildingthecapacitiesofhumanresources.


Diogenes is a business incubator specialising in high technology, aiming atsupporting the development of entrepreneurship and start-up companies inCyprus.However none of its companies focuses on environmental activities / eco-innovation.

Foresightandcommonvisionbuilding

Marketintelligenceandotherformsofinformation

sharing

DEMAN

DSIDE

FOCU

S

Regulationsandstandards

Regulations,targets,cap&tradeschemes

Performancestandards,labeling,certification

The Plan for the provision of government grants aiming at the promotion ofEMAScertificationinbusinessessupportsSMEsintransitionfromISO14001,aswellasSMEswithoutpreviousenvironmentalmanagementcertification.

X X

Publicprocurement

“Green“publicprocurementofgoodsandservices

AnActionPlanforGreenPublicProcurementinCypruswasissuedinSeptember2012. The Action Plan describes the framework and the targets of theProgrammefortheperiod2012-2014.

X

R&Dprocurement


Pre-commercialprocurement

TechnologyTransfer

Advisorysupportfortechnologyadopters

FrameworkProgrammeforresearch,technologicaldevelopmentandinnovation2009-2010oftheResearchPromotionFoundation:InnovationvouchersActionofthe ‘Innovation’Programme.Projectsaimat introducing innovationtoSMEs,through the provision of relevant advisory services by research and academicinstitutes.

In2011-201224proposalssubmittedand16ofthemhavebeenfunded.

Financialorfiscalsupportfortechnologyadopters

(e.g.grantsforpurchasingnewtechnology)

Fixed feed-in tariffs provided through the ‘Support Scheme for ElectricityGenerationfromWindEnergy,SolarEnergyandBiomass’.LargescalePVsystemsbetween 150kW and 10MW were promoted for the first time in 2012 via atenderallocatingsupport for50MW.Finally,aFiT forwindpowerplantsabove30kWhasbeeninplacesinceDecember2012.

Financial incentivesarealsoprovidedvia support schemes for theutilisationofRESandforenergyconservation.TheSpecialFundforRenewableEnergySourcesand Energy Efficiency, overseen by the Ministry of Commerce, Industry andTourism, is the implementing authority with a budget of 25 million EUR (for2012). Individuals and organisations that do not exercise economic activity aresupportedthroughasubsidywheninstallingthermal insulationonbuildings(upto 30% of the costs). Private and public entities which exercise economicactivities are also eligible for financial support to implement energy efficiencymeasures.

X X

X

Renewable energy sources are promoted through the ‘Support Scheme for theUtilisation of RES and Energy Conservation’ and the ‘Support Scheme forElectricity Generation fromWind Energy, Solar Energy and Biomass’ (e.g.windpower installations, central water heating systems, solar thermal system,installation of biomass plants, PV systems for domestic and public use, smallhydro-generators). The Special Fund for RES and Energy Efficiency is theimplementingauthority.

X

Supportofprivatedemand

Taxincentivesforconsumers(e.g.forpurchasing


environmentallyefficientproducts)

Taxreductionsforproductsandservices(e.g.VAT

reductions)

Demandsubsidies(e.g.eco-vouchers,consumer

subsidies)

WithaviewtopromoteinnovationinSMEstheResearchFoundationlounchedthe action " Innovation Vouchers ". Themaximum funding is € 5,000 for eachparticipating SME and it can reach € 15,000 for research and academicinstitutionsandcharitableorganizations.ThetotalbudgetoftheCallis€70,000.

http://www.research.org.cy/EL/news/3860.html

Awarenessraisingandinformationprovision

AbouttheEco-InnovationObservatory(EIO)

The Eco-Innovation Observatory (EIO) is the initiative financed by the European Commission’sDirectorate-General for the Environment. The Observatory is developing an integrated informationsource and a series of analyses on eco-innovation trends andmarkets, targeting business, innovationserviceproviders,policymakersaswellasresearchersandanalysts.

VisitEIOandDGENVEco-innovationActionPlan(EcoAP)websiteandregistertogetaccesstomoreinformationandtoaccessallEIOreports,briefsanddatabases.

www.eco-innovation.euec.europa.eu/environment/ecoap

CYPRUS eco-innovation 2015 - European Commission

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