(i)

Climate and energy have become priorities, as the EU is taking the lead in building a global low carbon economy. In March 2007, the European Council adopted conclusions (1) on reducing greenhouse gas emissions by at least 20 % by 2020 compared to 1990 (30 % as part of an international agreement on global targets) and to set a binding 20 % target for the use of renewable energy sources by 2020, including a 10 % share of biofuels in transport petrol and diesel consumption. Agriculture and forestry can make an important contribution in providing the feed stocks for bio-energy, in carbon sequestration and in further reducing greenhouse gas emissions.

(ii)

The objectives of the EU with regard to water policy are laid down in Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (2), which will start to reach full implementation in the period 2010-2012. As main users of water and water resources, agriculture and forestry have a major role to play in sustainable water management both in terms of quantity and of quality. Water management will be an increasingly important part of the adaptation strategy to deal with already unavoidable climate change.

(iii)

Member States have committed themselves to halting biodiversity decline by 2010, a target which seems increasingly unlikely to be met. A large part of Europe's biological diversity is dependent on agriculture and forestry and the efforts to protect biodiversity will have to be increased, particularly in the light of the expected adverse effects of climate change and increasing water demand.

(iv)

Dairy producers make a substantial contribution to maintaining the countryside through sustainable farming activity, especially in disadvantaged regions. In view of their high production costs and the structural changes they have to face as a result of the phasing-out of the milk quota system, accompanying support measures should be made available to dairy producers, in order to allow them to better adapt to new market conditions.

(v)

Rural development measures can be used in particular to encourage innovation in water management, in production and use of renewable energies, in protection of biodiversity and in dealing with climate change mitigation and adaptation and to promote win-win solutions for competitiveness and the environment. In order to promote full use of innovation, specific support for innovative operations related to the new challenges should be made available.’.

(i)

In particular, investment support under axis 1 can be targeted towards energy, water and other input saving machinery and equipment as well as to the production of renewable energy for on farm use. In the agriculture and food sector and in the forestry sector, investment support should help to develop innovative and more sustainable ways of biofuel processing.

(ii)

Under axis 2, the agri-environment measures and forestry measures can be used in particular to enhance biodiversity by conserving species-rich vegetation types and protecting and maintaining grassland and extensive forms of agricultural production. Specific actions under axis 2, such as agri-environment measures or afforestation, can also help to improve the capacity to better manage the available water resources in terms of quantity and protect them in terms of quality. Furthermore, certain agri-environmental and forestry actions contribute to curbing emissions of nitrous oxide (N2O) and methane (CH4) and help to promote carbon sequestration.

(iii)

Under axis 3 and 4, local scale projects and cooperation for renewable energy projects can be supported as well as diversification of farmers into bioenergy production. Conservation of natural heritage can help in protecting high-nature-value habitats and high-value water bodies.

(iv)

As all rural areas are being confronted with the climate change and renewable energy issues, Member States can encourage the local action groups under axis 4 (Leader) to pick up these issues in their local development strategies as a cross-cutting theme. The groups are well placed to contribute to climate change adaptation and renewable energy solutions tailored to the local situation.

(v)

Innovation has the potential to achieve particularly positive effects in meeting the new challenges of climate change, the production of renewable energies, more sustainable water management practices and halting biodiversity decline. Support for innovation in these areas could take the form of encouraging the development, take-up and application of relevant technologies, products and processes.

(vi)

As a general principle, support shall be targeted on types of operations which are coherent with the objectives and provisions established in Regulation (EC) No 1698/2005 and which contribute to generating positive potential effects in view of the new challenges such as those specified in Annex II to that Regulation.’.