The European Commission (EC) has opened three funding windows under the Innovation Fund, supported by €5.2 billion in EU Emissions Trading System revenues. These include a €2.9 billion call for net-zero technologies (IF25 NZT call), a €1.3 billion auction under the European Hydrogen Bank for renewable and low-carbon hydrogen production (IF25 hydrogen auction), and a €1 billion auction dedicated to industrial process heat decarbonisation (IF25 heat auction) through the Industrial Decarbonisation Bank. These initiatives are intended to advance the EU’s climate and energy goals for 2030, support progress toward climate neutrality by 2050, and reinforce the Clean Industrial Deal.
The IF25 NZT call aims to narrow investment gaps, attract public and private capital and strengthen clean-technology manufacturing in Europe. It targets decarbonisation projects of different scale that deploy innovative solutions capable of reducing greenhouse gas (GHG) emissions, including initiatives in renewable energy component manufacturing, energy storage, heat pump, and hydrogen technologies such as electric vehicle batteries. Applications will be evaluated on GHG reduction potential, innovation, degree of innovation, maturity, replicability, and cost-effectiveness. Additionally, projects led exclusively by small and medium enterprises (SMEs) will receive dedicated evaluation bonus points.
The IF25 hydrogen auction will support production of renewable fuels of non-biological origin and electrolytic low-carbon hydrogen across three categories, including a new category for hydrogen producers supplying to maritime and aviation offtakers. Selected projects will receive fixed premium payments for a maximum of up to ten years upon verified and certified hydrogen output. The IF25 heat auction, funded with €1 billion, will support electrified and direct-renewable heat systems across all sizes and sectors such as heat pumps, electric boilers, resistance and induction heating, solar thermal, geothermal, and hybrid technologies. Support will be granted as a fixed premium linked to verifiable decarbonised heat output for up to five years. Furthermore, member states may co-finance additional eligible projects through the ‘Auctions-as-a-Service’ mechanism, with Germany committing €1.3 billion to hydrogen production projects and Spain allocating €465 million to both hydrogen production and industrial heat initiatives.
