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European Climate Infrastructure and Environment Executive Agency

About Innovation Fund

Objectives

The Innovation Fund will contribute to greenhouse gas reduction by:

  • helping create the right financial incentives for new investments in the next generation of technologies needed for the EU's low-carbon transition
  • boosting growth and competitiveness by empowering companies with a first-mover advantage to become global clean technology leaders
  • supporting innovative low-carbon technologies in all Member States in taking off and reaching the market.

It is designed to take into account the lessons learned from its predecessor, the NER300 programme. It is bigger and better in several ways:

  • Open to projects from energy intensive-industries
  • Improves the risk-sharing for projects: its grants cover up to 60% of the additional capital and operational costs of innovation
  • Provides support in a more flexible way, following the cashflow needs of the project through pre-defined milestones
  • Simpler selection process
  • Stronger synergies with other EU funding programmes
  • Streamlined governance and simplified decision-making

Policy Background

The Innovation Fund is one of the world’s largest funding programmes for the demonstration of innovative low-carbon technologies.

The Innovation Fund will provide around EUR 38 billion of support from 2020 to 2030 (at EUR 75 / tCO2), 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.

As the successor of the NER300 programme, the Innovation Fund improves the risk-sharing for projects by giving more funding in a more flexible way through a simpler selection process and is also open to projects from energy-intensive industries.

The Directorate Generale Climate Action is in charge of the policy development.

What can be funded?

The Innovation Fund focuses on highly innovative technologies and big flagship projects with European value added that can bring 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.

The Fund aims to finance a varied project pipeline achieving an optimal balance of a wide range of innovative technologies in all eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) in EU Member States, Iceland and Norway.

At the same time, the projects need to be sufficiently mature in terms of planning, business model and financial and legal structure.

The Fund also supports cross-cutting projects for innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example through industrial symbiosis.

Large-scale projects

Large-scale are projects with a capital expenditure above €7.5 million. The Commission plans to launch one call for large-scale project every year.

The second call for large-scale projects was launched on 26 October 2021. With a budget of EUR 1.5 billion, which is increased by 50% compared to the previous call, it will finance breakthrough technologies for renewable energy, energy-intensive industries, energy storage, and carbon capture, use and storage.

The deadline to submit a full application was 3 March 2022 and we received 138 applications in all eligible categories.

The information on the evaluation results will be provided in the third quarter of 2022 and grants will be awarded in the last quarter of 2022.

Small-scale projects

Small-scale are projects with a capital expenditure between EUR 2.5 and 7.5 million. The Commission will launch one call for small-scale project per year.

The second call for small-scale projects was launched on 31 March 2022 with a budget of EUR 100 million. The call text and application process remained largely similar to those of the first call and applicants have five months to prepare their application (until 31 August 2022).

Selection criteria

Projects will be selected based on different criteria:

  • Effectiveness of greenhouse gas emissions avoidance
  • Degree of innovation
  • Project maturity
  • Scalability
  • Cost efficiency (cost per unit of performance)

The detailed scoring and ranking methodology are set in each call for proposals

Legal framework

The Commission Delegated Regulation on the Innovation Fund provides the overall framework for its operation.

Data Protection Notice

Data Protection Notice for processing personal data during the evaluation of the project proposals for the Innovation Fund programme.