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The DNSH Principle (Do Not Significant Harm) and the Next Generation Funds EU

Friday 09, February 2024

The DNSH reports “Do not cause significant harm” are a fundamental requirement for access to Next Generation EU funds.

1.-What is the taxonomy regulation and what link does it have with the DNSH?

Regulation (EU) 2021/241 of the European Parliament and of the Council of February 12, 2021, relating to the establishment of a framework to facilitate sustainable investments and amending Regulation (EU) 2019/2088, is known as the European Union Taxonomy Regulation.

This regulation is directly applicable in each member state of the European Union. It aims to provide a classification system (taxonomy) to determine the extent to which an economic activity is environmentally sustainable.

It therefore provides technical criteria to determine whether an activity contributes substantially to the EU’s environmental objectives related to climate change and other environmental aspects.

Article 17 of Regulation (EU) 2020/852 “Significant harm to environmental objectives” defines the six environmental objectives established in the DNSH principle.
When evaluating an economic activity according to the criteria (environmental objectives of the DNSH principle), the environmental impact of both the activity itself and the products and services generated by that activity throughout its entire duration must be taken into account. life cycle, in particular taking into account the production, use and end of useful life of those products and services.

 

2.-How should we prove compliance with the DNSH principle in a specific project that we present to the Next Generation EU funds?

The Ministry for the Ecological Transition and the Demographic Challenge (MITECO) presented the Guide with recommendations to adapt both the design ant the development of  PRTR actions to the DNSH principle with the aim of facilitating evaluation and a checklist for projects.

Depending the requirements established in the different aids, validation of DNSH compliance can be carried out both internally (self-assessment, responsible declaration) or by an accredited entity.

3.-What should a correct DNSH memory include?

In the Technical Guide of the European Comission an indicative list of possible evidence to be provided in the actions to justify compliance with the DNSH principle on each environmental objective is offered.

For example, for the goal of “climate change mitigation and circular economy”, the assessment and possible tests could be:

Source: Ministtry for the Ecological Transition and the Demographic Challenge

The DNSH report must allow the correct qualitative and/or quantitative justification of the project. Likewise, it must include justification for exclusions, estimates or low-quality information.

Finally, the DNSH reports must include attached documentation and complementary studies (for example, life cycle analyses, corporate environmental footprint, carbon footprint or water footprint) that serve to prove compliance with the DNSH principle.

4.-What is the climate and environmental contribution labeling that appears within DNSH self-assessments and reports?

It is the percentage of climate and environmental contribution that frames the action established in the Recovery, Transformation and Resilience Plan (PRTR).

A calculation system has been established for the contribution to climate objectives of the planned investments, which consists of assigning to each action one, and only one, of the fields of intervention (labels) provided in the Annex VI of Regulation (EU) 2021/241.

Therefore, in the DNSH principle memories:

  1. We verify the climate or environmental contribution label that has been assigned to the PRTR investment in which this action is framed, as a reference.
  2. We justify the label that is intended to be attributed to this performance.
  3. We justify that said label (and the action itself) support the specific environmental objective being evaluated.

5.-How do we validate the DNSH principle?

In principle, there are three ways to validate compliance with the DNSH principle. They may vary according to the call for Next Generation funds in which the project is framed and the need for less or more information:

  • Responsible declaration (must be adapted by each convening Administration taking into account the risks of the activity).
  • Self-assessment (simplified or substantive presentation of justifications depending on whether it is considered that there may be some impact or that it does not contribute significantly to the objective).
  • An external validation will consist of an independent assessment in activities with greater environmental impact (such as, for example, those in which compliance with the DNSH principle is of special relevance for the PRTR) or whenever it is considered appropriate.

It is essential to correctly analyze compliance with the DNSH principle before submitting the proposal to a Next Generation call in order to obtain a favorable resolution.

Likewise, in the justification phase, it is advisable to limit the risks related to non-compliance with the DNSH principle.

 

6.-What subsidy lines exist where DNSH reports must be submitted?

The aid/subsidies that are currently open can be consulted from the following links:

MITECO website

CDTI website

We provide solutions

At OAK ,we have provided services in the field of sustainability since 2004. In these almost 20 years, we have developed projects in the field of environmental management, as well as the complete evaluation of the life cycle of a product or service.

This knowledge allows us to projects that comply with the DNSH and the environmental objectives detailed in the Regulation 2020/852, always with the aim of facilitating and ensuring access to Next Generation funds.

More information can be found at the following links:

DNSH  Guide- Ministry for the Ecological Transition and Demographic Challenge

DNSH principle

The CDTI-E.P.E.

The information contained herein is collected from various sources. Although we endeavor to keep it correct, accurate and current, we cannot guarantee that it will remain so at the time you access it. For this reason, any initiative that may be taken using such information as a reference must be preceded by an exhaustive verification of its reality and accuracy, as well as the relevant professional advice from our consulting and development area.