Non-profit calls for clarity over EU crowdfunding

Muddled regulatory framework comprised of different national laws must be harmonised to boost green schemes, says Citizenergy

The European Commission should remove barriers to cross-border crowdfunding efforts – particularly for sustainable-energy ventures, says region-wide non-profit group Citizenergy.

As an association dedicated to stimulating investment in renewable energy source (RES) projects, the group argues in a position paper that if the EU wants to drive citizen interest and investment in those schemes, member states’ national crowdfunding laws must be harmonised.

Furthermore, it says, the Commission should promote and share best practices for funding such initiatives, at both a national and regional level.

In Citizenergy’s view:

1. Excessive regulatory and administrative burdens are preventing the establishment of EU-wide crowdfunding platforms for channelling citizens’ investments;
2. Due to the variety of national regulatory systems across the continent, legal uncertainty currently surrounds citizens’ cross-border investments in the crowdfunding market; and
3. An uneven playing field persists across EU member states, in terms of public support for, and visibility of, RES projects – as well as tax incentives for citizens’ investment.

On those grounds, the group says, “we encourage the Commission’s endeavour to support crowdfunding as a mean of access to finance for SMEs – especially regarding innovative businesses in the field of renewable energy”.

“Recently,” the paper notes, “some member states have undertaken first steps in order to set up a legal framework applicable to crowdfunding, which could reduce the costs of setting up… platforms and make the overall process simpler and more transparent.

“However,” it points out, “it is important to notice that without a coherent legal approach to crowdfunding across EU member states, new barriers are created. This is especially true for crowdfunding platforms with a pan-European focus, as well as for companies or projects raising capital and citizens wanting to invest cross border.”

It adds: “As crowdfunding continues to develop and grow in market size, an adequate European policy framework will be needed to support the sector with regard to innovation, compliance and transparency.

“Citizens’ investment must be enabled cross border in order to allow equal access to renewable energy projects, so that investment can flow between EU member states and finance renewable energy according to market needs.”

In a further statement, Henrique Burnay – senior partner at Citizenergy stakeholder Eupportunity – said: “Citizen investment via instruments such as crowdfunding brings a variety of benefits – not least of which is a more decentralised, secure and democratic energy landscape.”

Read the full position paper here.

For previous The Treasurer coverage of Europe’s approach to crowdfunding, read this article from May.