The European Commission has announced the opening of three new funding opportunities under the Innovation Fund with a total budget of €5.2 billion in EU Emissions Trading System (EU ETS) revenues.
“By channelling €5.2 billion of EU ETS revenues into net-zero technologies, hydrogen and industrial heat decarbonisation, Europe is not just setting the stage for a greener future and technological leadership but investing in its own future,” said EC executive vice-president Teresa Ribera.
The general call for net-zero technologies (IF25 NZT call) seeks to bridge investment gaps, attract public and private capital, and strengthen Europe’s leadership in clean-technology manufacturing and deployment.
With an allocated budget of €2.9 billion, it supports decarbonisation projects that demonstrate highly innovative technologies and processes that are sufficiently mature and have a significant potential to reduce greenhouse gas (GHG) emissions. It involves projects of different scale, as well as those focusing on the manufacturing of components for renewable energy, energy storage, heat pumps and hydrogen production, including electric-vehicle batteries.
Projects that can apply to the call will be assessed based on their potential to reduce GHG emissions, degree of innovation, project maturity, replicability and cost efficiency. There will be a new dedicated bonus point for projects coordinated and implemented only by SMEs.
Supporting industrial transformation through hydrogen
Clean hydrogen is increasingly used for the decarbonisation of heavy industry and transport sectors. With €1.3 billion, the third auction under the European Hydrogen Bank (IF25 Hydrogen Auction) is designed to provide cost-efficient support for the production of renewable fuels of non-biological origin (RFNBO) hydrogen or electrolytic low-carbon hydrogen across three topics, including a new topic for producers of hydrogen with maritime or aviation off takers.
Projects selected under the auction will receive support in the form of a fixed premium payment upon verified and certified production of hydrogen for a maximum period of 10 years.
Tackling emissions with decarbonising industrial process heat
The first European-wide auction for decarbonising industrial process heat (IF25 Heat Auction) is a milestone in establishing the future Industrial Decarbonisation Bank to address one of the EU’s biggest sources of GHG emissions. Up to €1 billion will be used to support electrified and direct-renewable heat production, which is currently responsible for three-quarters of industrial emissions. Support will be auctioned to projects which can deliver the most cost-effective CO2 abatement, closing the cost gap between sustainable solutions and fossil fuel-based alternatives for industrial process heat.
Opened to different project sizes and across all industrial sectors, the auction will support the deployment of technologies such as heat pumps, electric boilers, resistance and induction heating, direct renewable heat solutions (solar thermal or geothermal) as well as hybrid projects that combine different technologies. Support is granted as an output-based fixed premium, linked to verified decarbonised heat production and paid for a maximum period of five years.
In addition, Member States have the possibility to leverage on the Innovation Fund’s evaluation process and a streamlined state aid approval process. Via the ‘Auctions-as-a-Service’ scheme, they are able to dedicate national funds to support projects that have passed the evaluation award criteria but were not selected for Innovation Fund funding due to budgetary limitations. Germany and Spain have confirmed their participation in Auctions-as-a-Service in these auctions. Germany will dedicate a further €1.3 billion in national funds to support RFNBO hydrogen production projects nationally. Spain will also dedicate a total of €465 million in national funds, of which €415 million will support hydrogen projects and an additional €50 million to support industrial heat decarbonisation projects.
Questions and answers on the IF25 NZT Call
Questions and answers on the IF25 Auctions
Innovation Fund projects dashboard
