Innovation fund: €5.2 billion for clean energy

The European Commission has announced the opening of three new funding opportunities under an innovation fund with a total budget of €5.2 billion in revenue from the EU Emissions Trading System (EU ETS). Applications for carbon-neutral technologies for 2025 (with a budget of €2.9 billion), the third auction for hydrogen production under the European Hydrogen Bank (with a budget of €1.3 billion) and the first-ever auction for decarbonizing industrial process heat under the Industrial Decarbonization Bank (with a budget of €1 billion) can be submitted through the EU’s Funding & Tenders portal.

Innovation fund

The Innovation Fund is one of the world’s largest programs for financing the demonstration and commercialization of innovative low-carbon technologies, financed by EU ETS revenues. The fund’s estimated budget for 2020-2030 is about 40 billion euros. It aims to create financial incentives for companies and public authorities to invest in cutting-edge low-carbon technologies and support Europe’s transition to climate neutrality.

Taking into account all ongoing and upcoming projects, the Innovation Fund has now allocated more than 15.8 billion euros to support more than 275 initiatives from previous calls for proposals. Both the hydrogen and heat auctions are based on a competitive market approach and follow a pay-as-bid model. Bids are ranked by price within each topic, and money will be awarded until the available budget is exhausted. For the hydrogen auction, bids are ranked according to the price in euros per kilogram of hydrogen produced, and for the heat auction, bids are ranked according to the price in euros per ton of_CO2 reduced.

Call for proposals – carbon neutral technologies

The call for proposals on carbon-neutral technologies aims to fill investment gaps, attract public and private capital and strengthen Europe’s leadership in the production and deployment of clean technologies.

A budget of €2.9 billion has been allocated for the implementation of this activity. The measure aims to support decarbonization projects with highly innovative technologies and processes that are sufficiently advanced and have significant potential to reduce greenhouse gas emissions. The fund supports projects of various scales, including those focusing on the production of components for renewable energy generation, heat pumps and hydrogen, including batteries for electric vehicles, and energy storage.

Projects submitted under this measure will be evaluated based on their potential to reduce greenhouse gas emissions, degree of innovation, project maturity, replicability and cost-effectiveness. Recognizing that small-scale innovation can play an important role in European decarbonization efforts, there will be a new bonus point for projects coordinated and implemented exclusively by SMEs.

Applications under this measure can be submitted until April 23, 2026, at 5 p.m. via the EU Funding & Tenders portal.

European Hydrogen Bank auction

Another proposed support is the auctions under the European Hydrogen Bank. The third auction, worth €1.3 billion, is designed to provide cost-effective support for the production of non-biological renewable hydrogen or low-carbon electrolytic hydrogen in three thematic areas, including a new theme for hydrogen producers with marine or aviation customers. Projects selected in the auction will receive support in the form of a fixed premium for a maximum of 10 years, once hydrogen production has been verified and certified. You can read about the earlier auction in a previous article: Hydrogen bank – first auctions next month. 800 million euros in EU support

The call for applications runs until February 19, 2026 at. 17.00.

Auction to decarbonize industrial heat

The first pan-European auction for decarbonizing industrial heat is a milestone on the way to establishing a future industrial decarbonization bank to address one of the EU’s largest sources of greenhouse gas emissions. Up to €1 billion will go to support electrified and directly renewable heat generation, which currently accounts for three-quarters of industrial emissions. The support will be auctioned to projects that can provide the most cost-effective reductions in_CO2 emissions, bridging the cost gap between sustainable solutions and fossil fuel-based alternatives for industrial heat.

The auction, open to projects of all sizes and in all industry sectors, will support the deployment of technologies such as heat pumps, electric boilers, resistance and induction heating, direct renewable heat solutions (solar, aerothermal, hydrothermal or geothermal energy), as well as hybrid projects combining different technologies. Support comes in the form of a fixed production-based bonus tied to verified zero-carbon heat production and paid over a maximum period of five years.

The call for applications runs until February 19, 2026 at. 17.00.