BRUSSELS, Belgium / EuroWire.IO / – The European Commission announced on October 19 the allocation of €3.4 billion from the Innovation Fund to support 77 projects focused on net-zero technologies. These projects, which span 23 countries within the European Economic Area, encompass a broad spectrum of clean industrial innovations. The funding is derived from revenues generated by the EU Emissions Trading System.
According to estimates from the Commission, these initiatives could prevent approximately 290 million tonnes of carbon dioxide equivalent emissions during their initial decade of operation, which equates to about one tonne every second over ten years. The projects aim to bolster Europe’s industrial leadership and competitiveness in clean technology sectors while promoting energy independence and security. This initiative aligns with the EU’s objective of achieving climate neutrality by 2050.
Wopke Hoekstra, the Commissioner for Climate, Net Zero and Clean Growth, highlighted that these projects exemplify how European innovators are transforming climate commitments into industrial advancements. He emphasized that reinvesting revenues from the carbon market supports companies in bringing clean technologies to commercial viability. The call for proposals, launched in December 2025, attracted 358 applications requesting a total of €17.5 billion, well above the available budget of €2.9 billion. All five categories of the call were oversubscribed, underscoring strong interest. The Innovation Fund stands as one of the world’s largest programs dedicated to funding innovative low-carbon technologies.
Funding predominantly targets large-scale and manufacturing initiatives
The most substantial portion of the funding, approximately €1.58 billion, was requested by 12 large-scale projects. An equal number of projects in clean-tech manufacturing sought nearly €895 million. Additionally, 17 medium-scale projects, valued at about €458 million, were selected, alongside 20 small-scale projects requesting around €124 million. Sixteen pilot projects aimed for roughly €394 million. The portfolio features projects across energy-intensive industries, renewable energy, energy storage, and net-zero mobility, with all five categories represented among the 77 selected initiatives.
For the first time, the Innovation Fund will back a project involving a small modular nuclear reactor, along with its inaugural direct air carbon capture and storage initiative. Other projects focus on processing and recycling critical raw materials, such as rare earth permanent magnets and batteries. Additional selected initiatives include advanced alternative fuels and industrial carbon management solutions. Previously, the Commission has supported clean industry projects through this same funding scheme.
Grant agreements are anticipated in early 2027
An additional 84 projects passed evaluation but could not be financed due to budget limitations. These, along with the 77 selected projects, will be granted the STEP Seal quality label to facilitate attracting further funding. Moreover, 160 proposals remain eligible for project development assistance from the European Investment Bank. Independent experts assessed applications based on emissions reduction potential, innovation level, maturity, replicability, and cost efficiency. This seal is part of the Strategic Technologies for Europe Platform.
Currently, the selected project promoters are preparing grant agreements with the European Climate, Infrastructure and Environment Executive Agency, with the European Commission expecting to announce the outcome of that process in the first quarter of 2027. Future calls for the Innovation Fund are scheduled to open in early December 2026, including a €1 billion focus on clean-tech manufacturing. Additionally, the fund manages hydrogen and industrial heat auctions. Its portfolio now encompasses around 320 projects with nearly €17 billion in commitments.