The Innovation Fund is the EU fund for climate policy, with a focus on energy and industry. It aims to bring to the market solutions to decarbonise European industry and support its transition to climate neutrality while fostering its competitiveness.
Objective(s) and scope
The Innovation Fund is a dedicated EU fund for climate policy, with a particular emphasis on energy and industry. Its primary objective is to introduce market solutions that will support the decarbonisation of the European industry, thereby supporting its transition towards climate neutrality. This is aimed to be achieved while simultaneously enhancing its competitiveness, with funding sourced from the EU Emissions Trading System (ETS).
The Innovation Fund is driven by the following objectives:
- help businesses invest in clean energy and industry
- boost economic growth
- create future-proof jobs
- reinforce European technological leadership on a global scale.
These objectives are realised by financing innovative projects that focus on:
- innovative low-carbon technologies and processes in energy-intensive industries, including products that can substitute carbon-intensive ones
- carbon capture and utilisation – CCU
- construction and operation of carbon capture and storage (CCS) facilities
- innovative renewable energy generation
- energy storage
In light of the recent revision of the ETS Directive, new sectors have been added, including net-zero mobility (maritime, aviation, road transport) and buildings. With the inclusion of the maritime sector in the ETS, the Innovation Fund is now in a position to support the development and implementation of breakthrough technologies aimed at decarbonising this sector. This includes initiatives in energy efficiency, sustainable alternative fuels, electrification, and zero-emission propulsion technologies, such as wind technologies. The fund also supports the development of innovative infrastructure in the maritime sector, particularly for EU container transhipment ports. Projects funded by the Innovation Fund can address the full spectrum of climate impacts, including black carbon emissions.
The fund awards grants through calls for proposals and through competitive bidding procedures (auctions).
The first EU-wide auction (IF23 Auction) for the production of RFNBO (renewable fuel of non-biological origin) hydrogen was launched on 23 November 2023 and closed on 8 February 2024. The auction attracted 132 projects bids from 17 European countries
Administering body
European Investment Bank (EIB) / European Climate, Infrastructure and Environment Executive Agency (CINEA)
Financing value
The Innovation Fund supports up to 60% (in case of regular grants) and up to 100% (in case of competitive bidding) of the relevant costs calculated according to the methodology indicated in each call.
The following information is related to the 2023 call and is provided only for reference.
A total of EUR 4 billion distributed in 5 categories as follows:
- General decarbonisation projects
- General decarbonisation projects (large-scale, CAPEX above EUR 100 million) – EUR 1.7 billion available
- General decarbonisation projects (medium-scale, CAPEX between EUR 20 and 100 million) – EUR 500 million available
- General decarbonisation projects (small-scale, CAPEX between EUR 2.5 and 20 million) – EUR 200 million available
- Cleantech manufacturing – EUR 1.4 billion available for projects with CAPEX above EUR 2.5 million, focusing on the manufacturing of components for renewable energy, energy storage, heat pumps and hydrogen production.
- Pilot projects – EUR 200 million available for projects with CAPEX above EUR 2.5 million focusing on deep decarbonisation.
Regarding the first RFNBO hydrogen bidding, after evaluation, seven renewable hydrogen projects were selected and will receive nearly €720 million in project support from the Innovation Fund. Altogether, the selected projects will cover 1.5 Gigawatts electric (GWe) of electrolyser capacity and produce a total volume of 1.58 million tonnes of RFNBO hydrogen over ten years.
Eligibility criteria (if available)
Eligibility criteria for regular grant include the following:
- Projects must be located in an EU/EEA
- Projects must:
- implement innovation in low-carbon technologies and processes in sectors listed in Annex I and Annex III to the EU ETS Directive 2003/87
- stimulate the construction and operation of environmentally safe capture and geological storage of CO2 (CCS)
- help the construction and operation of innovative renewable energy and energy storage technologies.
- Projects must reach financial close within 4 years after grant signature.
- Projects must operate at least 3 years after entry into operation for pilot and small-scale projects and at least 5 years for the other topics.
- Projects must not have started works at the time of grant application.
Projects applying to calls for regular grants will be selected based on:
- greenhouse gas emissions avoidance potential
- degree of innovation
- project maturity
- replicability
- cost efficiency
The detailed scoring and ranking methodology, as well as additional criteria for geographical and sectoral balance, are set in each call for proposals.
Further information on eligibility criteria
Additional eligibility criteria for the maritime sector projects can be added. For reference, under call INNOVFUND-2023-NZT:
- when the projects concern investments on ships, those ships must call ports under the jurisdiction of an EU/EEA country on a regular basis or perform service or support activities in such ports.
- when the projects concern investments in ports infrastructure, the ports must be under the jurisdiction of an EU/EEA country.
Application period
[Call currently closed]
There will be regular calls for project proposals throughout the duration of the Innovation Fund (between 2020 and 2030).
For reference, last call was published on 23 November 2023 and remained open until 9 April 2024 (5 months).
Additional information
Different topics are covered under each call, some of which may be relevant to the maritime industry. For reference, a total of 337 project proposals were submitted in response to the 2023 call. Out of those, 10% were related to mobility, and 70% of those concerned the maritime industry. This resulted in 24 applications (7%) for support for the maritime industry.
