Innovation Fund

Innovation Fund

The Innovation Fund is a key funding instrument for delivering the EU’s economy-wide commitments under the Paris Agreement and its objective to become climate-neutral by 2050.The Fund will be financed by revenues from the auctioning of allowances under the EU Emissions Trading System and may amount to about €10 billion, depending on the carbon price.

CALLS FOR PROPOSALS

Calls are published regularly on the Funding & Tender Opportunities web server.

LEGAL BASIS

Commission Delegated Regulation 2019/856 of 26 February 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council with regard to the operation of the Innovation Fund | OJ L 140/06, 28.5.2019

DOCUMENTS

Report on the implementation of the Innovation Fund, including the review referred to in Article 24 of Regulation 1031/2010 | COM(2022) 416 final, 26.8.2022

General information

The Innovation Fund will provide around €38 billion of support from 2020 to 2030, depending on the carbon price, for the commercial demonstration of innovative low-carbon technologies, aiming to bring to the market industrial solutions to decarbonise Europe and support its transition to climate neutrality.

The goal is to help businesses invest in clean energy and industry to boost economic growth, create local future-proof jobs and reinforce European technological leadership on a global scale.

This is done through calls for large and small-scale projects focusing on:

innovative low-carbon technologies and processes in energy-intensive industries, including products substituting carbon-intensive ones
carbon capture and utilisation (CCU)
construction and operation of carbon capture and storage (CCS)
innovative renewable energy generation
energy storage.

Procedure

The Innovation Fund focuses on highly innovative technologies and big flagship projects within Europe that can bring on significant emission reductions. It is about sharing the risk with project promoters to help with the demonstration of first-of-a-kind highly innovative projects.

It aims to finance a varied project pipeline achieving an optimal balance of a wide range of innovative technologies in all eligible sectors and Member States, Norway and Iceland. At the same time, the projects need to be sufficiently mature in terms of planning, business model as well as financial and legal structure.

The fund supports cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example, through industrial symbiosis. The Fund is also open to small-scale projects with total capital costs under €7.5 million.

Projects will be selected based on: effectiveness of greenhouse gas emissions avoidance; degree of innovation; project maturity; scalability; and cost efficiency. The detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectorial balance, are set in each call for proposals. For small-scale projects, the selection criteria are simplified.

The Innovation Fund will support up to 60% of the additional capital and operational costs of large-scale projects and up to 60% of the capital costs of small-scale projects. The grants will be disbursed in a flexible way based on project financing needs, taking into account the milestones achieved during the project lifetime.