The European Commission has presented a new tax simplification package which, among other measures, proposes the creation of a common minimum framework for the tax treatment of R&D investments across the European Union.
The main objective is to reduce differences between Member States and encourage greater investment in innovation. For companies developing R&D&I projects, the proposal introduces a new reference point for planning future investment in assets such as machinery, laboratories and pilot plants.
It also highlights the growing connection between tax incentives and European innovation funding policy.
The proposal will now be submitted to the European Parliament for consultation and to the Council of the European Union for adoption before it can enter into force.
Until now, the tax treatment of R&D investment has depended on the rules of each Member State. This has created differences between countries and, in some cases, influenced decisions about where companies choose to develop innovation activities.
The Commission’s proposal introduces a common minimum standard with three main objectives:
Under this approach, taxation becomes an additional policy instrument to encourage R&D investment, alongside existing funding programmes and public support measures.
The European Commission expects the new framework to help strengthen and attract greater investment in R&D activities, as well as support the development of industrial and technological capabilities. Among the expected effects is an estimated annual increase of approximately 0.2% in European GDP.
The Commission also estimates a reduction of almost EUR8 billion in tax compliance costs for businesses.
FI Group by EPSA has actively contributed to this European debate by presenting proposals to reinforce the role of taxation as a lever for R&D&I investment.
“In 2023, we presented a position paper on BEFIT, in which FI Group by EPSA defended the need to include specific tax incentives for innovation within the future common European framework, recovering elements already considered in the CCCTB proposal, such as deductions for R&D investment and specific measures for start-ups,” explains Victor Cruz, Regulatory Public Affairs & Strategy Director.
He adds: “FI Group by EPSA put forward recommendations aimed at improving legal certainty, supporting stable and predictable budgets, promoting eco-innovation and moving towards a common definition of innovation in the European Union.”
In addition to the direct tax treatment of R&D investments, the European proposal includes measures that may influence how companies structure innovation projects at European level.
The proposal includes the removal of withholding taxes on dividends, interest and royalties between companies in different Member States.
This change would make it easier to organise corporate structures with activity in several countries, particularly in areas such as:
The Commission also proposes adjustments to European tax rules that may affect the financing of innovative projects.
These include:
The creation of a common framework may influence how companies plan innovation investment, particularly where the acquisition of equipment, machinery or infrastructure represents a significant part of the R&D budget.
The proposal may be especially relevant for organisations developing new products, processes or technologies that require specific equipment to carry out these activities, including:
Another important point is that the proposal would allow Member States to maintain more favourable national regimes, provided they are aligned with the framework ultimately approved by the European Union. This creates the possibility that future European standards will coexist with existing incentives in each country.
The proposal focuses on tangible investments required to develop R&D activities, including:
The proposal provides for a 100% deduction of the investment, with two possible approaches:
To access the incentive, the assets must also be used continuously for R&D activities for a minimum period of three years. If this requirement is no longer met, the proposal includes a mechanism to regularise the tax benefit obtained.
The content of the proposal makes it possible to anticipate certain trends that can be incorporated into R&D project planning.
In this context, companies should consider reviewing:
The European framework is moving towards greater integration between taxation, funding and innovation. In this context, planning an R&D project goes beyond identifying a specific incentive. It requires companies to analyse how different instruments can be combined and to adapt their funding strategy as the regulatory environment evolves.
Specialist advice from the early stages of a project can help companies identify funding opportunities, define an appropriate strategy and receive support throughout the project lifecycle. This enables businesses to incorporate regulatory developments into their planning and take advantage of available opportunities at both national and European level.
AI innovation hubs are becoming critical to global R&D strategy. Locations such as King’s Cross, the San Francisco Bay Area, Paris, Toronto, Montreal and Singapore offer more than access to talent. They bring together research institutions, public funding, tax incentives, investors, infrastructure and regulatory environments that can directly influence the cost, speed and commercial success of AI development.
For businesses investing in AI, location is no longer a purely operational decision. It is a strategic R&D choice that can shape access to funding, partnerships, specialist expertise and long-term innovation capacity.
AI innovation is often discussed as though it happens entirely in the cloud. In practice, much of it still depends on place.
The strongest AI ecosystems tend to emerge where talent, research, capital, infrastructure and public policy are concentrated. This is why locations such as King’s Cross, the San Francisco Bay Area, Paris, Toronto, Montreal and Singapore matter to businesses planning AI-led R&D. They are not simply office locations. They are operating environments.
For companies investing in AI, the decision on where to build, test and scale can influence access to people, funding, partners, tax relief and regulatory certainty. The technology matters, but so does the ecosystem surrounding it.
AI R&D is resource-intensive. It requires specialist engineers, data scientists, domain experts, compute infrastructure, research links, commercial partners and patient capital. These inputs are rarely distributed evenly across a country. They concentrate.
Clusters form because proximity reduces friction. Universities train talent and generate research. Start-ups turn ideas into products. Larger companies provide scale, procurement routes and career pathways. Investors bring capital and market discipline. Public bodies provide grants, infrastructure and incentives. When these groups are close enough to interact regularly, collaboration becomes easier.
This is particularly important in AI because many projects sit between disciplines. A healthcare AI company may need machine learning researchers, clinicians, regulatory specialists, data governance support and commercial partners. A robotics company may need AI engineers, hardware expertise, manufacturing partners and testing environments. A financial services AI business may need technical talent, compliance expertise and access to enterprise clients.
Clusters help companies assemble these capabilities faster.
There is also a talent effect. Skilled workers are more likely to move to places where there are multiple employers, strong research institutions and credible career options. Companies benefit from deeper labour markets. Employees benefit from choice. This creates a reinforcing cycle: talent attracts companies, companies attract capital, and capital attracts more talent.
Venture capital adds another layer. According to OECD analysis, AI firms accounted for 61% of global venture capital investment in 2025, worth USD 258.7 billion. That capital is highly concentrated. Businesses outside the main AI hubs can still raise funding, but clusters improve access to investors who understand the technology, the commercial risks and the route to scale.
Knowledge spillovers are harder to measure, but equally important. They occur through conferences, shared labs, alumni networks, founder communities, investor meetings, university partnerships and informal contact. In a fast-moving field, proximity to the right conversations can be strategically valuable.
King’s Cross has become one of Europe’s most visible examples of an urban AI and science cluster.
Its strength comes from the wider Knowledge Quarter, which covers King’s Cross, St Pancras, Euston and Bloomsbury. Within a small area sit the British Library, the Alan Turing Institute, the Francis Crick Institute, UCL, Google DeepMind and a growing group of technology and life sciences companies.
This mix is important. King’s Cross is not only a technology district. It connects AI with biomedical research, data science, public institutions, transport infrastructure, cultural organisations and commercial space. That gives it a broader innovation base than a pure software cluster.
Google’s Platform 37 development adds further weight. The building is expected to bring Google and Google DeepMind teams together in King’s Cross, alongside the AI Exchange, a public-facing space designed to improve understanding of AI. This matters because anchor organisations shape ecosystems. They attract talent, suppliers, investors and adjacent firms.
The UK Government’s 2024 AI Sector Study estimated that the UK had 5,862 AI companies, £23.9 billion in AI-related revenue and more than 86,000 AI-related jobs. London, the South East and the East of England accounted for around three quarters of registered office locations for UK AI firms. King’s Cross sits inside that concentration.
The district also benefits from its life sciences base. UCL analysis has suggested that the Euston and King’s Cross innovation district already generates more than £8 billion in annual GVA and could add up to £3.5 billion more by 2035 with the right planning, transport and investment conditions. The Francis Crick Institute’s partnerships to expand commercial lab space in the area show how physical infrastructure is being built around scientific demand.
This is the point businesses should recognise. King’s Cross has grown because several conditions overlap: research density, corporate commitment, transport links, public institutions, commercial space and access to finance. It is not a single-factor success story.
King’s Cross is part of a wider global pattern. AI hubs are developing in different ways, shaped by their talent base, policy environment and funding model.
The Bay Area remains the commercial benchmark for AI. It combines world-class universities, large technology companies, venture capital, experienced founders and a deep technical workforce. Its advantage is scale. Companies can access capital, talent, infrastructure providers and customers in one market.
The cost base is high, and competition for talent is intense, but for frontier AI companies the Bay Area remains difficult to ignore.
Toronto and the wider Ontario ecosystem offer a different model. The Vector Institute, the University of Toronto and the Toronto-Waterloo corridor have helped build one of North America’s strongest AI talent bases. Ontario also benefits from Canada’s SR&ED tax incentive programme and provincial support such as the Ontario Innovation Tax Credit.
For companies looking for North American AI capability outside the Bay Area, Ontario offers strong research depth and a structured incentive environment.
Montreal’s AI position is closely linked to Mila, the Quebec AI Institute, and its academic network across Université de Montréal, McGill, Polytechnique Montréal and HEC Montréal. The city is especially strong in deep learning research and talent development.
Quebec has also strengthened its innovation support through the CRIC tax credit for R&D, innovation and pre-commercialisation activity. That gives Montreal a clear proposition: research strength, public support and a lower-cost environment than many US hubs.
Paris has become a stronger European AI contender through a mix of state strategy, academic depth and start-up infrastructure. Station F has increased its AI activity, while France 2030 has backed nine AI clusters with €360 million to strengthen research, training and innovation.
France also has one of Europe’s most established R&D tax incentive systems through the Crédit d’Impôt Recherche. For companies assessing European AI locations, Paris combines market access, talent and public support.
Singapore’s strength lies in coordination. Its government has treated AI as part of a broader national innovation strategy, linking talent, regulation, digital infrastructure and regional market access. The National AI Strategy and Enterprise Innovation Scheme give businesses a clear policy framework.
Singapore is especially relevant for companies looking at Asia-Pacific expansion. It offers connectivity, a pro-business environment and a growing base of AI partnerships across professional services, finance, healthcare and advanced industries.
AI hubs do not grow through market forces alone. Public policy often shapes whether a cluster becomes durable.
Governments use incentives for a practical reason: R&D creates benefits that extend beyond the company funding it. New knowledge, skilled workers and technical capability can spread through supply chains and wider industries. Without support, businesses may underinvest.
R&D tax incentives help reduce the cost of eligible activity. In the UK, the merged RDEC scheme applies from 1 April 2024 at a 20% credit rate, while Enhanced R&D Intensive Support provides additional support for qualifying loss-making R&D-intensive SMEs. In France, the Research Tax Credit supports qualifying R&D expenditure. Canada’s SR&ED programme remains a major federal incentive, often layered with provincial schemes. Singapore’s Enterprise Innovation Scheme offers enhanced deductions or allowances for qualifying innovation activity.
These incentives affect the real cost of experimentation. For AI businesses, this can include work on model development, data processing methods, software architecture, automation, testing, technical uncertainty and integration challenges, provided the activity meets the relevant scheme rules.
Grants play a different role. They can help companies start projects that would otherwise be delayed or reduced in scope. UK programmes such as BridgeAI support AI adoption and development in priority sectors. EU AI Factories are designed to improve access to compute, data and expertise. France 2030 is using public investment to strengthen national AI capability. Quebec’s support for Mila shows how direct funding can reinforce research institutions and talent pipelines.
Public-private partnerships are also central. Innovation hubs need convenors: institutions that bring companies, researchers, funders, standards bodies and public agencies together. The Alan Turing Institute, Digital Catapult, Innovate UK, the Francis Crick Institute, Station F and Singapore’s EDB all play different versions of this role.
For businesses, the lesson is clear. Incentives should not be treated as an afterthought once a location has been chosen. They are part of the location decision.
AI location strategy should start with the work being undertaken. A company developing frontier models has different needs from a manufacturer applying AI to production processes, or a healthcare company building regulated decision-support tools.
Five factors deserve close attention.
AI hubs are becoming strategic engines of R&D because they bring together the conditions that help companies move from technical possibility to commercial use. Talent, capital, infrastructure, research institutions and incentives all matter. Their value increases when they work together.
King’s Cross shows how this can happen in a dense urban district. Its advantage is not only the presence of major AI companies. It is the combination of AI, life sciences, public research, transport, universities and commercial investment in a small geography.
Other hubs offer different strengths. The Bay Area has unmatched capital depth. Ontario and Montreal offer research strength and structured public support. Paris benefits from national AI investment and a strong R&D tax regime. Singapore offers regional access and coordinated policy.
For businesses investing in AI, the location decision should be treated as part of the R&D strategy. The right hub can improve access to talent, shorten collaboration cycles, reduce project costs and open routes to funding. The wrong location can make the same project slower, more expensive and harder to scale.
AI may be digital, but innovation still has an address.
Artificial intelligence has moved beyond experimentation. It is now a core driver of competitiveness, efficiency and strategic differentiation across industries. As adoption accelerates, however, a parallel force is reshaping its development: regulation.
Governments worldwide are no longer taking a passive approach to AI innovation. They are actively defining the conditions under which it must evolve. The European Union’s AI Act, alongside emerging frameworks in the United States, Asia and Latin America, signals a structural shift. AI is no longer simply a technological opportunity. It is now a regulated domain.
This creates a fundamental question for organisations: does regulation slow innovation, or does it redefine how innovation happens?
The answer is increasingly clear. Regulation is not a constraint on innovation. It is a filter. It determines which innovations are viable, fundable and scalable.
For businesses, the question is no longer whether to comply. It is how to use compliance to unlock investment, accelerate adoption and build long-term competitive advantage.
The first wave of AI adoption was defined by experimentation. Companies tested models, explored use cases and prioritised speed over structure. Governance, explainability and risk management were often secondary considerations.
That phase is over.
We are now entering the era of trusted AI, where systems must demonstrate not only performance, but also accountability, transparency and control. This shift is being driven by regulators, but also by market expectations. Clients, investors and partners increasingly require assurance around how AI systems operate, use data and make decisions.
In practice, organisations must redesign their AI roadmaps around three core pillars:
As internal governance frameworks mature, companies are formalising processes that include risk classification, human oversight and traceability. This aligns with emerging standards such as ISO/IEC 42001, where AI systems are managed through structured, auditable processes across their lifecycle.
The implication is direct. AI is no longer a standalone capability. It is an integrated, regulated system that must be designed for trust from day one.
One of the most underestimated effects of AI regulation is its direct impact on funding.
Public funding programmes, particularly in Europe, are increasingly aligned with regulatory compliance. Funding is no longer awarded solely on the basis of technological ambition or innovation potential. It is increasingly linked to a project’s ability to demonstrate ethical use, security and responsible governance.
This is especially visible in the European ecosystem, where the AI Act sets a clear framework for acceptable practices. Projects that incorporate risk management, data governance and human oversight are better positioned to access funding instruments, including R&D incentives and strategic innovation programmes.
At the same time, governments are prioritising investment in sovereign and strategic technologies. AI sits at the centre of this agenda, but only when it aligns with broader objectives: resilience, security and control over critical data and infrastructure.
For companies, this creates a structural shift:
Organisations that treat compliance as a checkbox will fall behind. Those that integrate it into their innovation strategy will be better positioned to access capital that others cannot.
A second major shift is taking place in how AI systems are designed.
Historically, compliance was reactive. Systems were developed first, and regulatory requirements were addressed later, often at significant cost. Today, this approach is no longer viable.
AI systems are increasingly being built to be compliant by design. This means that requirements relating to data protection, cybersecurity, traceability and governance are integrated from the earliest stages of development.
This shift has several consequences:
For industrial AI projects, the impact is direct. Digital transformation programmes must now include governance layers, documentation standards and risk controls as core components, rather than add-ons.
Companies that adopt this approach achieve two key advantages. First, they reduce the risk of costly redesigns or compliance failures. Second, they accelerate adoption by building trust with stakeholders from the outset.
A common pattern is emerging in successful projects: when governance and compliance are embedded early, organisations move faster in later stages. They face fewer barriers in deployment, scaling and market acceptance.
While regulation is becoming universal, its implementation varies significantly across regions. These differences have direct implications for companies operating internationally.
Europe leads with a structured and comprehensive approach. The AI Act introduces a risk-based framework that defines clear obligations, particularly for high-risk systems. The European model prioritises trust, safety and fundamental rights. While this creates higher compliance requirements, it also establishes a strong foundation for scalable and trusted AI.
The United States adopts a more flexible, market-driven approach. Regulation exists, but it is less centralised. Innovation tends to lead, with governance frameworks evolving in response. This creates a more dynamic ecosystem, but also greater uncertainty over the long term.
Asia, particularly China, combines strong state involvement with rapid technological deployment. Regulation is present, but often aligned with national strategic objectives. The focus is on scaling AI capabilities quickly while maintaining control over key sectors.
Latin America is at an earlier stage. Adoption is accelerating, but regulatory frameworks are still developing. This creates opportunities for rapid implementation, but also risks linked to future alignment with global standards.
For businesses, the implication is clear: AI strategies must be designed for regulatory diversity. Solutions that are compliant in one region may not scale globally without adaptation.
Despite the visibility of regulation, many organisations are still underestimating its business impact.
The first misconception relates to cost. Compliance is often seen as an expense that reduces margins. In reality, its absence can be far more expensive. Retrofitting compliance into existing systems, facing regulatory penalties or rebuilding non-compliant solutions can significantly increase costs.
The second blind spot is scalability. AI systems that are not designed with regulatory requirements in mind face major barriers when expanding into new markets. What works locally may not be transferable internationally.
The third and most critical risk is obsolescence. AI solutions developed today may become non-compliant tomorrow if they do not anticipate regulatory evolution. This can create stranded investments and limit long-term value creation.
Organisations that fail to address these challenges early face a compounding disadvantage. They risk losing access to funding, facing operational constraints and struggling to scale.
By contrast, companies that integrate governance frameworks, including structured AI management systems, mitigate these risks. They create a foundation where innovation can evolve within clear, sustainable boundaries.
AI regulation marks a turning point in how innovation is conceived, developed and scaled.
It is not simply a set of constraints imposed on technology. It is a framework that defines what sustainable, scalable and investable innovation looks like.
For businesses, the implication is strategic. Compliance is no longer a legal requirement operating in isolation. It is a core lever for funding, differentiation and growth.
Organisations that embed governance, transparency and accountability into their AI systems will not only reduce risk. They will position themselves to capture new opportunities, access strategic funding and build trust in increasingly competitive markets.
The shift is already underway.
The question is not whether regulation will shape AI innovation. It is whether companies are ready to use it to their advantage.
On 8-9 June 2026, FI Group by EPSA participated in the European Association of Innovation Consultants (EAIC) Annual General Meeting in Zagreb, Croatia.
EAIC is a European association representing innovation consultancy firms and supporting dialogue between consultants, institutions and industry on research, development and innovation funding policy.
The event brought together key stakeholders from EU institutions, industry and consultancy to discuss the future of innovation funding in Europe, with a particular focus on the next European long-term budget for research and innovation, the Multiannual Financial Framework (MFF) 2028-2034.
These discussions are highly relevant for organisations seeking to anticipate how European innovation funding will evolve in the coming years.
FI Group by EPSA’s participation in the EAIC AGM reinforces its position as an active contributor to the development of European innovation policy and funding frameworks.
By being present where key decisions are discussed and shaped, FI Group by EPSA gains early visibility of policy and programme developments while contributing to the design of future funding mechanisms. This enables the company to create tangible value for clients by:
This involvement supports FI Group by EPSA’s ability to provide clients with forward-looking insight, stronger strategic guidance and a clearer understanding of future EU funding programme opportunities.
During the EAIC AGM, Luca Pira, Public Affairs and International Grant Manager and Coordinator of the National Funding Schemes Working Group, played a central role in both implementation and strategic discussions as part of the Working Group Coordinators panel.
In this context, he presented FI Group by EPSA’s contributions to key topics, including the future design of EU innovation funding at national and regional level under the MFF 2028-2034, as well as regulatory and State aid frameworks.
This included input into the recent public consultation on the General Block Exemption Regulation, where FI Group by EPSA contributed as part of a coordinated effort at both national and European level alongside key industry associations: the European Association of Innovation Consultants (EAIC), the Asociación Española para el Fomento de la Financiación de la I+D+i (AFIDI), the Associazione Italiana per la Ricerca Industriale (AIRI), and BusinessEurope.
Luca also highlighted upcoming work on a European comparative report on R&D and technological innovation incentives, coordinated by Víctor Cruz, Regulatory, Public Affairs & Strategy Director. This further demonstrates FI Group by EPSA’s expertise in tax incentives and regulatory intelligence.
FI Group by EPSA’s active participation in the EAIC AGM also strengthens its international partner network, particularly in countries and regions where the company does not yet have a direct presence, such as Croatia and the broader Balkan region.
These markets are becoming increasingly strategic within the European innovation landscape. Through EAIC, FI Group by EPSA is also able to leverage collective advocacy capacity at European level, enhancing its influence on policy and funding frameworks beyond what a single organisation could achieve independently.
This approach creates stronger opportunities for FI Group by EPSA and its clients in international and cross-border innovation initiatives.
Active engagement across EAIC Working Groups
FI Group by EPSA is actively engaged in several EAIC Working Groups, covering:
This involvement strengthens the company’s expertise, expands its network and enhances its ability to anticipate and shape market trends.
As Europe defines its next innovation funding cycle, FI Group by EPSA will continue to contribute actively within EAIC, remaining at the forefront of policy and programme developments. This includes participation in the EAIC Summit on the Future of Funding in Europe, taking place on 3 November 2026 in Brussels. The event is expected to feature speakers such as MEP Christian Ehler, a key figure in EU research and innovation policy, who plays a leading role in shaping the MFF 2028–2034 and the upcoming FP10.
This engagement is aligned with a broader shift in the sector: from a primarily operational role focused on identifying opportunities and preparing applications, towards a more strategic advisory role. This requires the ability to combine technical, financial and regulatory expertise to position projects, structure partnerships and support clients across the full innovation lifecycle.
By leveraging EAIC’s collective advocacy capacity at European level, FI Group by EPSA strengthens its ability to influence frameworks, anticipate change and create tangible value for clients, while reinforcing its competitive position in the European innovation funding landscape. FI Group by EPSA can support organisations in identifying upcoming opportunities, interpreting regulatory changes and positioning projects for future funding success.
“In nature, nothing is created, nothing is lost, everything is transformed.”
Antoine Lavoisier’s well-known statement captures a principle that has shaped the natural world for millennia, yet has often been overlooked in human economic development.
In its earliest stages, humanity relied directly on natural resources for survival. As knowledge advanced, societies began to domesticate nature, integrating plants and animals into more predictable and productive systems. Later, industrialisation enabled transformation at unprecedented scale, converting raw materials into goods, infrastructure and wealth.
However, this progress also created a critical disconnection. While industries became increasingly sophisticated in the way they produced, they frequently treated the by-products of production, including waste and residues, as valueless externalities. Materials were discarded as though they had no further utility and no wider consequence.
That logic is now being challenged. A new industrial paradigm is emerging, one in which waste is no longer viewed simply as something to be eliminated, but as a strategic asset that can be reintegrated into production cycles.
The data makes it impossible to treat waste as a peripheral issue. It points instead to a systemic inefficiency in the global economy.
According to the Global E-waste Monitor (2024), the world generated 62 million tonnes of electronic waste in 2022, an 82% increase compared with 2010. Less than 25% was formally recycled, despite the significant economic value of the materials involved (ITU and UNITAR, 2024).
The World Bank (2021) estimates that global municipal solid waste reached 2.24 billion tonnes in 2020 and is projected to rise to 3.88 billion tonnes by 2050. Plastics further illustrate the scale of the challenge. Approximately 400 million tonnes of plastic waste are generated annually, while total global plastic production reached around 460 million tonnes in 2022, with recycling rates below 10% (World Economic Forum, 2022; WorldMetrics, 2026).
Glass follows a similar pattern. Of the roughly 130 million tonnes produced each year, only around 21% is effectively recycled (Gradeall, 2026). In metals, however, the economic case for reuse is clearer. Data from the Bureau of International Recycling shows that around 630 million tonnes of ferrous scrap were reused in global steel production in 2024, demonstrating that, where there is a strong economic rationale, waste quickly becomes input (BIR, 2025).
Aluminium provides another compelling example. More than 35 million tonnes are recycled annually, with energy savings of up to 95% compared with primary production (International Aluminium Institute, 2024; Business Research Insights, 2026).
The food system may be the most striking example of inefficiency. Around 1 billion tonnes of food were wasted globally in 2019, accounting for an estimated 8% to 10% of global greenhouse gas emissions (UNEP, 2021).
Taken together, these figures show that the issue is not merely the volume of waste being generated. It is the scale of value being systematically discarded. In many cases, the constraint is not technical feasibility, but an economic model that has failed to capture the full potential of materials after their first use.
Packaging is one of the most visible and paradoxical expressions of this linear model.
In many cases, packaging serves its purpose for only a few days, hours or even minutes. It protects products, enables transport and supports consumption. Yet once discarded, it can persist for years, decades or even centuries, particularly in the case of plastics and complex multilayer materials that are difficult to recycle.
Because packaging cuts across so many sectors, it occupies a unique position within the waste ecosystem. It may be made from plastic, glass, paper, metal or combinations of several materials, which increases both its prevalence and the complexity of recovery.
Approximately 36% of all plastic produced globally is used for packaging, much of it discarded after a single use (World Economic Forum, 2022). This creates a structural mismatch between the short period of use and the long-term environmental and economic consequences of disposal.
It also explains why packaging sits at the centre of the circular innovation debate. High-value materials are too often converted rapidly into low-value waste, creating both a sustainability challenge and a missed commercial opportunity.
This situation is now driving a fundamental shift in how waste is perceived. Increasingly, waste is being recognised as a stock of uncaptured value.
Research, Development and Innovation (R&D&I) are central to this transition. They enable businesses to transform waste streams into new inputs, materials, processes and business models. This is no longer a theoretical ambition. It is already developing at economic scale.
The global recycling and circular economy market, estimated at around USD 64.7 billion in 2026, is projected to reach approximately USD 126.5 billion by 2035, driven by new technologies and industrial applications (Business Research Insights, 2026).
From a broader perspective, the circular economy solutions market was estimated at approximately USD 2.7 trillion in 2024 and is expected to reach USD 5.8 trillion by 2034, reflecting growing investment in models that reintegrate waste into production systems (Global Market Insights, 2025).
This is more than an environmental trend. It is a concrete economic frontier. Innovation is increasingly being applied directly to waste streams, converting them into productivity gains, operational resilience and new sources of revenue.
The strategic implication is clear. If waste has not yet become an asset within a company’s operations, the barrier is not always technological. In many cases, the issue lies in how innovation projects are financially structured, prioritised and funded.
Many opportunities already exist within business operations. Waste, losses and inefficiencies can often be converted from costs into new revenue streams or productivity gains. However, these opportunities remain underexplored when the projects required to unlock them lack appropriate financial support.
This is where public innovation funding mechanisms and instruments such as R&D Tax Credits can play a central role. By reducing the cost of capital, mitigating risk and expanding investment capacity, these mechanisms can help companies pursue R&D&I projects that may otherwise remain marginal or underfunded.
When aligned with business strategy, innovation funding can help companies develop new applications for industrial waste, improve material recovery, redesign processes and build commercially viable circular models.
Companies that treat innovation purely as an expense risk continuing to discard value alongside their waste.
By contrast, companies that structure innovation as an investment are better placed to transform operational liabilities into competitive advantages.
Industries that treat waste as assets are pulling ahead because they apply a stronger logic of capital allocation and value creation.
They do not view waste as the end of a process. They view it as a strategic input that can reduce dependency on raw materials, generate new revenue streams, improve efficiency and strengthen long-term resilience.
As circular innovation moves from sustainability ambition to commercial reality, the companies best positioned to lead will be those that identify hidden value within their operations and structure the funding needed to unlock it.
In this context, waste is no longer simply a cost to be managed. It is an opportunity to be developed, financed and scaled.
European funds for businesses have become one of the most relevant drivers for supporting business projects linked to innovation, sustainability, digitalisation and industrial development.
The European Union structures a range of programmes that channel resources towards strategic initiatives, including Next Generation EU, ERDF funds, and calls under the Horizon Europe programme, each with complementary objectives and approaches. Understanding how these instruments operate, what opportunities they offer and which criteria determine access is essential for companies to anticipate calls and position their projects with a greater likelihood of success.
To support the planning of European funds for businesses, we provide an European calls, enabling organisations to identify key dates and the most relevant opportunities for each type of company.
European funds for businesses are financial instruments created by the European Union to support projects that promote economic growth, competitiveness and the transition towards a more innovative and sustainable model. Their purpose is to channel resources into initiatives that enable companies to:
These grants are structured through different programmes aligned with specific priorities. Some encourage investment aimed at modernising production processes or adopting advanced technologies, while others finance R&D&I activities, decarbonisation actions, or projects that reinforce territorial cohesion through new industrial capabilities. This diversity of objectives makes it easier for companies of different sizes and sectors to find funding schemes suited to their project needs.
The importance of European funds for businesses lies in their ability to reduce financial barriers and facilitate the launch of initiatives that require significant investment. They also help accelerate transformations that would be more complex to undertake using internal resources alone. In a competitive and constantly evolving environment, they represent a strategic tool to drive business innovation, strengthen sustainability and align investments with EU priorities in energy transition, digitalisation and industrial development.
The funds have enabled European funding for businesses to support projects related to digitalisation, energy transition, industrial innovation and process modernisation, financing strategic initiatives that require substantial investment. Their main contribution has been to provide resources for transformations that enhance competitiveness and support adaptation to EU priorities in areas such as energy efficiency, sustainable mobility and technological development.
However, this instrument is temporary, with a clearly defined timeframe: its implementation period ends in August 2026, placing organisations at a decisive moment. Spain has launched various calls through the Recovery, Transformation and Resilience Plan, including strategic programmes such as the PERTEs, enabling companies across different sectors to access funding for high‑impact projects.
The final phase brings a more demanding environment: increased competition, limited scope to refine proposals, and a clear need to progress with the execution of already approved projects. At this stage, the ability to define solid initiatives aligned with the plan’s priorities is decisive in making the most of the European funds for businesses available before the programme officially closes.
The European Regional Development Fund (ERDF) is one of the key European funds for businesses within the EU’s cohesion policy. Its purpose is to reduce territorial disparities and support economic development through investments that strengthen competitiveness, promote innovation and encourage the transition towards more sustainable production models.
In the 2021–2027 period, ERDF resources are focused on five main priorities:
For companies, ERDF represents a stable source of funding, with active calls in Spain through regional and national programmes. Aid intensity varies by autonomous region, with higher percentages in less developed or transition regions, enabling business projects at different maturity levels to access resources adapted to their territorial context.
Horizon Europe is one of the main European funds for businesses supporting research and innovation projects with a direct impact on business competitiveness. Its financial framework strengthens opportunities over the coming years: The European Commission has allocated €14 billion for the period 2026–2027, securing a significant amount of funding for technological, scientific and industrial development initiatives.
For companies, this programme offers funding aimed at high value‑added projects, including the development of new technologies, advanced digital solutions, and initiatives related to climate and energy, mobility, health, artificial intelligence or deep tech. It also includes specialised instruments such as the European Innovation Council (EIC), which supports startups, scaleups and companies with disruptive projects seeking to increase technological maturity and accelerate market entry.
Horizon Europe requires a higher level of technical preparation, specialised consortia where required by the call, and clear alignment with European missions and priorities. For organisations with a robust innovation strategy, it represents an opportunity to finance ambitious developments, position themselves within strategic value chains and access international collaborations that strengthen long‑term competitiveness.
Other programmes fund R&I projects in specific fields, such as industrial decarbonisation, green and digital transitions, defence capabilities, connectivity infrastructure, culture, or health. These include instruments like the Innovation Fund, the LIFE Programme, the Digital Europe Programme, the European Defence Fund, the Connecting Europe Facility, the Erasmus+ Programme, EU4Health, and InvestEU, among others.
European funds for businesses support initiatives with a clear impact on competitiveness, sustainability and innovation. The most common types of project include:
Accessing European funds for businesses requires sound technical preparation and a clear strategy to ensure that the project complies with the priorities and criteria of each funding scheme. The typical steps include:
FI Group by EPSA works on a daily basis with business projects seeking to access European funding for companies, and this experience reveals a clear pattern: success depends not only on drafting a proposal, but also on correctly interpreting the criteria valued in each call for proposals and structuring projects accordingly.
This requires rigorous technical analysis to define objectives, justify the impact and tailor the scope to what is actually funded. This initial phase is crucial for avoiding deviations, ensuring consistency and increasing the chances of selection, particularly in highly competitive calls for proposals with demanding requirements.
During implementation, documentation management and compliance with milestones also directly affect the continuity of funding. FI Group by EPSA supports companies throughout this process to ensure that implementation remains aligned with approvals and that each action is properly justified — essential in programmes where deviations can affect the final payment.
This integrated approach enables companies to proceed with greater confidence on projects involving innovation, digitalisation or industrial growth, taking advantage of the European funds available to help businesses strengthen their competitiveness and accelerate transformations that would otherwise require greater internal resources or longer timelines.
