Explanatory Memorandum to COM(2018)466 - Nuclear decommissioning assistance programme of the Ignalina nuclear power plant in Lithuania (Ignalina programme)

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dossier COM(2018)466 - Nuclear decommissioning assistance programme of the Ignalina nuclear power plant in Lithuania (Ignalina programme).
source COM(2018)466 EN
date 13-06-2018


1. CONTEXT OF THE PROPOSAL

This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.

Reasons and objectives

The Ignalina nuclear power plant located nearby the town of Visaginas, consists of two High Power Channel Type Reactors (RBMK-1500 reactors), same type as in Chernobyl. The decommissioning of this plant contributes towards increased nuclear safety in the region and in the EU as a whole.

Accordingly, the Ignalina programme (the programme) has as its general objective to assist Lithuania in managing the radiological safety challenges of the decommissioning of the Ignalina nuclear power plant. Moreover, the programme has a high potential to create knowledge and support EU Member States with their own decommissioning, in particular for those Member States that have to pursue the decommissioning of graphite-moderated nuclear reactors.

The programme has been conducted through several financial periods and is planned to be finalised by 2038. The programme is expected to meet important milestones with the funding provided in this multiannual financial framework (2014-2020), nonetheless substantial amounts are still required in order to address the remaining key radiological safety issues related to its decommissioning. The decommissioning of these reactors is a first-of-a-kind activity entailing technological challenges such as the dismantling of graphite cores and the subsequent management of important amounts of irradiated graphite.

The programme originated in the context of the negotiations for accession to the European Union of Lithuania. Lithuania's commitment to close and subsequently decommission the two Soviet-designed nuclear reactors by a commonly agreed date is enshrined in the Lithuania's Accession Treaty( 1 ). As an act of solidarity, and acknowledging the long-term nature of the decommissioning of the Ignalina Nuclear Power Plant and the exceptional related financial burden, the European Union committed itself, through Protocol No 4 of Lithuania's Accession Treaty( 2 ), to provide adequate financial assistance, based on actual payment needs and absorption capacity, for the decommissioning of Ignalina nuclear power plant.

Lithuania has fulfilled its accession treaty commitment to close its reactors in a timely manner ( 3 ). Based on the provisions of Protocol No 4 of the Ignalina nuclear power plant in Lithuania's Accession Treaty ( 4 ), the Council of the European Union has adopted beyond 2006 successive Regulations ( 5 , 6 ) for the implementation of the decommissioning. In addition to EU financial support, at its inception the Ignalina programme benefited from support of international donors (EU Member States, Norway and Switzerland), which contributed to the Ignalina International Decommissioning Support Fund managed by the European Bank for Reconstruction and Development.

• Consistency with existing policy provisions

The programme's aim has evolved through the years in order to better address the needs and ensure the safe decommissioning of the facility: originally and until 2013, the European Union assistance was designed to support Lithuania both in its efforts to shut down and decommission the concerned reactors, but also to address the consequences of early closure of its nuclear power plant installation; later, in 2014, the programme's scope was restricted to decommissioning activities, i.e. on safety related measures; while for the next stage it is suggested that the programme further focuses on decommissioning activities that involve radiological safety challenges.

The disposal of spent fuel and radioactive waste in a deep geological repository is not in the scope of the programme and remains the responsibility of the Member State as per the relevant Council Directive 2011/70/Euratom on the responsible and safe management of spent fuel and radioactive waste.

• Consistency with other Union policies

In line with the Rome Declaration ( 7 ), the EU budget should enable a Europe that is safe and secure; this is a dimension where the Ignalina nuclear decommissioning assistance programme has contributed so far and may further contribute. The main positive impact to be achieved by the Ignalina programme is indeed the progressive decrease of the level of radiological hazard for the workers, the public and the environment in Lithuania but also in the EU as a whole.

The programme fits into the EU nuclear safety regulatory framework; particularly relevant for the programme are: (i) Council Directive 2011/70/Euratom establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste; (ii) Council Directive 2009/71/Euratom and its amendment Council Directive 2014/87/Euratom establishing a Community framework for the nuclear safety of nuclear installations; (iii) Council Directive 2013/59/Euratom laying down basic safety standards for protection against the dangers arising from exposure to ionising radiation.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis for the programme is established in Protocol No 4 of 2003 the Accession Treaty (3) whereby the Union shall, in solidarity with Lithuania, provide adequate additional Community assistance to the decommissioning effort beyond 2006.

This legal basis was confirmed by the legal service of the Council of the European Union in the process of adopting Council Regulation (EU) No 1369/2013.

• Subsidiarity (for non-exclusive competence)

The Ignalina programme stems from Lithuania's Accession Treaty and is a commitment from the European Union to Lithuania. The programme falls within the scope of the Lithuanian National Programme under Council Directive 2011/70/Euratom.

The EU added value of the programme from its beginning has been always defined in terms of nuclear safety and financial mitigation. Absence of EU co-financing would likely have a negative impact on the decommissioning process as such which in turn could result in direct impact on safety for the workers, the general public and the environment. The programme at its current stage of development provides still value in this respect, given the remaining radiological safety challenges, but its contribution naturally declines as the decommissioning progress.

Moreover, the programme can bring additional EU added value through increased focus on knowledge sharing which is important for addressing similar challenges faced by other Member States in progressing with their decommissioning plans 8 . Currently more than 90 nuclear reactors have been permanently shut down in Europe, but only three have been fully decommissioned. The level of experience in the dismantling of nuclear reactors in Europe (as well as internationally) is thus limited. The programme’s contribution to securing the dismantling of the Ignalina reactors will lead to the further generation of highly relevant experience and know-how that can be of benefit to other decommissioning projects and will result in increased levels of safety within the EU.

• Proportionality

The programme will focus in the next multiannual financial framework on radiological safety challenges of the decommissioning of the Ignalina nuclear power plant where the greatest EU added value can be achieved (i.e. progressive decrease of the level of radiological hazard for the workers, the public and the environment in Lithuania but also in the EU as a whole).

• Choice of the instrument

As a result of the programme's mid-term evaluation the current setup (i.e. Ignalina programme as dedicated spending programme) has proven to ensure effective and efficient implementation of the programme. Main factors of success are the clear definitions of roles and responsibilities as well as the strengthened monitoring framework.

The Commission proposes therefore to continue the implementation of the programme via indirect management through the pillar assessed implementing body (i.e. the Lithuanian national agency, CPMA).

3. RESULTS OF RETROSPECTIVE EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Retrospective evaluations/fitness checks of existing legislation

The programme's mid-term evaluation concluded that the current programme is coherent with EU policies aiming at ensuring the highest level of nuclear safety. The EU support ensures that the immediate dismantling strategy in Lithuania is steadily pursued and prevents that undue burden is transferred to future generations, while it partially derogates for historical reasons to the ultimate responsibility of the Member State to ensure adequate financial resources for nuclear decommissioning and radioactive waste management.

Lithuania has progressed effectively and efficiently in the decommissioning of its reactors in line with the baseline agreed in 2014 (i.e. decommissioning plan). There have been challenges and setbacks due to the programme's complexity, but the management system has proven increasing ability to cope with such challenges.

The analysis also demonstrated that substantially improved levels of safety are going to be achieved at the site as a result of the Union funding in this multiannual financial framework. In Lithuania, the main ongoing developments in the field are the steady progress of removing spent fuel from the reactor buildings and the preparations for dismantling the irradiated graphite from the reactors' core, which is a first-of-a-kind project of unprecedented scale.

Beyond 2020, the raising of additional funds needed until 2038 for the decommissioning of Ignalina nuclear power plant calls for a careful follow-up as the financing gap is sizable (EUR 1331 million).

The mid-term evaluation showed that the increasing level of national contribution is supporting stronger accountability and inducing economy-seeking behaviour on the part of beneficiary. The analysis also concluded that increasing levels of national contribution are a necessary but not a sufficient condition to set the right incentives for timely and efficient decommissioning. However, the lack of defining in the past the co-financing rates in the legal basis created uncertainties that will be removed in the draft legal basis for the next multiannual financial framework (2021-2027).

The governance setup has ensured effective and efficient implementation of the programme and compensated for the uncertainties mentioned above on the co-financing aspects. Main factors of success were clear definitions of roles and responsibilities as well as a strengthened monitoring framework. The analysis has also identified areas for further improvement such as:

(i)deeper involvement of the Member State (programme coordinator and financial coordinator) for increased ownership together with stronger accountability of the decommissioning operator (final beneficiary);

(ii)streamlining of procedures to enhance the timeliness and effectiveness of the management cycle;

(iii)increased inter-comparability with other decommissioning programmes' performance.

The European Union financial assistance has been implemented by indirect management ( 9 ) since its inception. The Commission proposes to continue entrusting the implementation of the programme's budget to a pillar assessed implementing body (indirect management), i.e. to the Lithuanian national agency, CPMA.

• Stakeholder consultations

For the programme's mid-term evaluation an open public consultation was launched by the Commission in June 2017 for an extended duration of 14 weeks. The consultation received limited interest (20 responses). In addition to this consultation, a targeted e-survey consultation was launched in July 2017; it gathered an additional 17 responses (1 from Bulgaria, 4 from Lithuania and 12 from Slovakia) from 90 stakeholders contacted in total. The replies received were overall positive about the programme but did not provide any additional new input on the programme. However, these two consultations were complemented with targeted consultations through around 100 interviews with decommissioning operators and relevant stakeholders.

• External expertise

1.

The following documents have been used as input for the preparation of the programme for the next multiannual financial framework:


–"Support to the mid-term evaluation of the Nuclear Decommissioning Assistance Programmes", EY, An evaluation for the European Commission DG Energy, 2018

–"Nuclear Decommissioning Assistance Programme (NDAP) – Assessment of the robustness of the financing plans considering the economic-financial-budgetary situation in each concerned Member State and of the relevance and feasibility of the detailed decommissioning plans", Deloitte, NucAdvisor, VVA Europe, A study prepared for the European Commission DG Energy, 2016

–ECA Special Report 22/2016 'EU nuclear decommissioning assistance programmes in Lithuania, Bulgaria and Slovakia: some progress made since 2011, but critical challenges ahead'

• Impact assessment

In line with the Financial Regulation and the requirements of the Commission's better regulation policy, the current programme has been subject to an ex-ante assessment (in the form of a Staff Working Document).

• Simplification

The programme is currently implemented via indirect management using a pillar-assessed implementing body in the concerned Member State (i.e. the Lithuanian national agency, CPMA). The programme's mid-term evaluation confirmed that the current setup has proven to ensure effective and efficient implementation of the programme and will be therefore continued in the next multiannual financial framework, with some simplifications drawing on lessons learned from the mid-term evaluation.

For example, the programme will take advantage of the multi-annual programming foreseen under the revised Financial Regulation. This will make the best use of the multi-annual detailed decommissioning plan as a baseline for programming and monitoring and enhance the efficiency and timeliness of the programming cycle. As far as programming is concerned the multiannual nature of the decommissioning programme will be reflected in the adoption of a multiannual work programme and financing decision. The programme may be revised based on the results of the evaluation. In line with the current practice, the funding provided through this Regulation could be used to complete projects programmed in the Ignalina Final Decommissioning Plan until its end date. Another example, relates to the introduction of a clearer framework for co-financing that will reduce uncertainty concerning the source of financing, remove the need for negotiating and agreeing on an annual basis the national contribution, and increase the ownership of the programme by the Member State.

In addition, the single rule book will be used while additional synergies and complementarities between programmes will be exploited wherever possible.

Finally, the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+) and the Cohesion Fund could support measures to accompany the related social and economic transition, including also energy efficiency and renewable energy measures as well as certain other activities not linked to radiological safety processes. As such these Funds can create additional activities in the concerned regions and utilise the locally available expertise as a major driver of job creation, sustainable growth and innovation. Similarly synergies should be explored with FP9 and / or the Euratom Research and Training Programme in areas such as technology development and testing, as well as training and education.

• Fundamental rights

The programme has no impact on fundamental rights.

4. BUDGETARY IMPLICATIONS

The proposed budget allocation for 2021-2027 is set at EUR 552 000 000 (current prices). It is based on the expected yearly disbursements provided for in the decommissioning plan, taking into account the proposed thresholds for EU co-financing. The baseline defines a nearly linear progress curve hence almost constant yearly commitments and payment plans are envisaged as presented in the Legislative Financial Statement.

Actions co-financed under the proposed financial programme are based on the detailed decommissioning plan established by Council Regulation 2013/1369/EU. This plan has already defined the scope of the programme, the decommissioning end-state and end-date; it covers the decommissioning activities, their associated schedule, costs and required human resources.

The human and administrative resources required for the programme management remain unchanged from the predecessor programme.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The programming, monitoring and control system will be further improved and streamlined with respect to the existing one. Lessons learnt from the mid-term evaluation will be used in order to ensure simplification and continuous improvement.

In 2014, the Commission modified the governance of the programme for the multiannual financial framework 2014-2020 in order to set out clearer roles and responsibilities, and introduce increased planning, monitoring and reporting requirements for the beneficiaries. In line with this revised governance approach, Lithuania appointed a Programme Coordinator and a Financial Coordinator (deputy minister or state secretary) to be responsible for the programming, coordination and monitoring of the decommissioning programme at national level. A committee with monitoring and reporting functions is in place, co-chaired by a Commission representative and the Programme Coordinator.

In the next financing period, the multiannual nature of the decommissioning process will be reflected in the adoption of a multiannual work programme and financing decision, in line with the proposed new financial regulation. This programming process will be evidently synchronised with the evaluation steps (an interim one after four years, and a final one five years after 2027 when the completion of tasks in field is expected).

These evaluations will be carried out in line with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016,( 10 ) where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action. The evaluations will assess the programme's effects on the ground based on the programme indicators/targets and a detailed analysis of the degree to which the programme can be deemed relevant, effective, efficient, provides enough EU added value and is coherent with other EU policies. They will include lessons learnt to identify any lacks/problems or any potential to further improve the actions or their results and to help maximise their exploitation/impact.

The current practice of annual reporting to the European Parliament and the Council will be maintained.

The Commission plans to continue entrusting the implementation of the programmes' budget to a pillar assessed implementing body (indirect management), i.e. to the Lithuanian national agency, CPMA. In addition, the Commission services will continue the practice of closely following up project implementation through desk and on-the-spot reviews on a biannual basis, and to supplement the regular programming, monitoring and control cycle with thematic verifications based on a risk review basis.

• Detailed explanation of the specific provisions of the proposal

Article 3 of the proposed basic act defines the objective of the programme for the multiannual financial framework 2021-2027. The specific objective reflects the twofold nature of the programme's objective which translates EU added value on the one hand into enhanced nuclear safety and, on the other hand, into increased knowledge for the EU Member State on the nuclear decommissioning process.

Articles 3, 6, 7 and the Annex altogether define a framework to ensure that the EU funding is focussed on actions truly delivering the programme's objective. They clarify the level of shared effort between the EU and Lithuania in decommissioning the Ignalina nuclear power plant. Article 7 sets a yearly ceiling for EU payment maximum Union co-financing rate at 80%, in response to recommendation No 3 and 4 of the European Court of Auditors 11 calling respectively Lithuania to be prepared to use national funds to cover decommissioning costs, and the Commission to seek increase in national contribution. This provision and the cost estimates of the detailed decommissioning plan as per Council Regulation 2013/1369/EU frame the EU commitment towards Lithuania established in the relevant Accession Treaty.

Article 8 introduces a major simplification with respect to the current programme, i.e. the use of a multiannual work programme, which reflects the nature of decommissioning programmes. Although a multiannual approach is adopted on the programming level, Article 4(3) provides for the possibility of annual budgetary commitments and the practice of annual reporting to the European Parliament and the Council is maintained as described in Article 9 i.

Article 10 defines the process for the multiannual work programme revision over a period which is commensurate to the programme nature and provides the Commission with adequate tools to introduce corrective measures if necessary.

Annex I gives a detailed description of the specific objective of the Programme. Annex I translates through Table 1 the Commission's reply to the recommendation no 6 12 of the European Court of Auditors which called the Commission to allow Union financing to be used only for costs of staff working fully on decommissioning activities. The table serves at maintaining Union funding for essential functions, such as safety, while using co-financing schemes to align the interests of local stakeholders with those of the Union. Annex II sets out specific indicators to report on the progress of the Programme towards the achievement of the objectives, in the area of ddismantling and decontamination, radioactive waste management and knowledge dissemination.