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Key Impact Points:
- Major Investment: The EU allocates €4.8 billion from emissions trading revenues to fund 85 innovative net-zero projects in 18 countries.
- Significant Emission Reductions: Net-Zero Projects expected to reduce emissions by approximately 476 million tonnes of CO₂ equivalent over ten years.
- Advancement of Cleantech Manufacturing: Funding supports clean technologies in energy-intensive industries, renewable energy, energy storage, carbon management, and net-zero mobility.
The European Commission has selected 85 innovative net-zero projects to receive €4.8 billion in grants from the Innovation Fund, aiming to accelerate the deployment of cutting-edge clean technologies across Europe. This marks the largest funding round since the fund’s inception in 2020, boosting total support to €12 billion and increasing the number of projects by 70%.
Wopke Hoekstra, Commissioner For Climate Action and responsible for transport said:
“The Innovation Fund is funding more projects than ever before. 85 innovative projects in 18 countries bring cutting-edge clean technologies at the service of climate action. New projects in the maritime, aviation and road transport sectors will boost efforts to reach clean mobility. The Fund is once again demonstrating how the EU ETS is a great tool in reducing emissions, and funding the projects we need to build a climate-neutral and competitive Europe.”
Why It Matters
Located in 18 countries—including Belgium, Denmark, Germany, and France—the selected projects span various sectors: energy-intensive industries, renewable energy, energy storage, industrial carbon management, net-zero mobility, and buildings. These initiatives are set to become operational before 2030 and are expected to reduce emissions by about 476 million tonnes of CO₂ equivalent over their first decade.
Supporting Key EU Policy Objectives
Cleantech Manufacturing: In alignment with the Net-Zero Industry Act (NZIA), projects will develop manufacturing plants for essential components in wind and solar energy, heat pumps, electrolysers, fuel cells, and energy storage technologies. This includes contributing to:
- 3 GW of solar photovoltaic manufacturing capacity in the EU.
- 9.3 GW of electrolyser manufacturing capacity in the EU.
Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight said:
” In a pivotal stride towards Europe’s climate neutrality goals, the Innovation Fund has achieved another significant milestone. The unprecedented €4.8 billion in grants will support the largest selection of Innovation Fund projects to date. For the first time, the STEP Seal has been awarded to a number of projects, which can facilitate access to more EU funding opportunities, helping make European industry stronger and more competitive. ”
Energy-Intensive Industries: The Net-Zero projects will deploy technologies to cut greenhouse gas emissions, integrate renewable energy, and implement heat and energy storage solutions in sectors that are challenging to decarbonize.
Industrial Carbon Management: Initiatives will capture CO₂ from hard-to-abate sources such as cement, lime, and chemical industries, contributing to 13% of the NZIA target of storing at least 50 million tonnes of CO₂ per year.
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Renewable Hydrogen: Selected projects aim to deliver 61 kilotonnes of renewable fuels of non-biological origin annually, enhancing the use of renewable hydrogen in industry and transport.
Net-Zero Mobility: Projects will reduce emissions in the maritime sector by building and retrofitting vessels for renewable fuels and electricity use. They will also support the production of 525 kilotonnes of sustainable transport fuels per year.
Next Steps
Successful applicants are expected to sign grant agreements with the European Climate, Infrastructure and Environment Executive Agency (CINEA) in the first quarter of 2025.
Additionally, Net-Zero projects that scored above evaluation thresholds but were not funded will receive project development assistance from the European Investment Bank and are awarded the STEP Seal—the EU’s new quality label under the Strategic Technologies for Europe Platform (STEP) to facilitate access to further support opportunities.
Looking Ahead
The Commission plans to launch the next call for proposals under the Innovation Fund in early December 2024.
Background: The EU Emissions Trading System’s Innovation Fund is one of the world’s largest funding programs for deploying net-zero and innovative technologies, with an estimated revenue of €40 billion between 2020 and 2030. To date, the fund has awarded about €7.2 billion to over 120 innovative projects across the European Economic Area.
The bottom line: This substantial investment underscores the EU’s commitment to accelerating the transition to a climate-neutral economy by supporting innovative projects that reduce emissions and bolster Europe’s technology leadership.