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.