The Innovation Fund is one of the world's largest funding programmes for climate action, for:
The EU Emissions Trading System (EU ETS), the world’s largest carbon pricing system, is providing the revenues for the Innovation Fund from the auctioning of 450 million allowances from 2020 to 2030, as well as any unspent funds from the NER300 programme. The Fund may amount to about €10 billion, depending on the carbon price. In parallel to the Innovation Fund, the EU ETS provides the main long-term incentive for these technologies to be deployed.
The Innovation Fund is a key funding instruments for delivering the EU’s economy-wide commitments under the Paris Agreement and supporting the European Commission’s strategic vision of a climate neutral Europe by 2050.
For more information, see also the Documentation tab.
The Innovation Fund will:
The Innovation Fund is designed to take into account the lessons learned from its predecessor, the NER300 programme. It is bigger and better in several ways:
The Innovation Fund will focus on highly innovative technologies and big flagship projects with European value added that can bring on significant emission reductions. It is about sharing the risk with project promoters to help with the demonstration of first-of-a-kind highly innovative projects.
It aims to finance a varied project pipeline achieving an optimal balance of a wide range of innovative technologies in all eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) and Member States.
At the same time, the projects need to be sufficiently mature in terms of planning, business model and financial and legal structure.
The Fund will also support cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example through industrial symbiosis or business model innovation.
The Fund is also open to small-scale projects with total capital costs under €7.5 million which can benefit from simplified application and selection procedures.
The application process has two phases:
Project proponents can apply by submitting their projects when there is an open call for proposals.
The Commission aims to launch the first call in 2020, followed by regular calls until 2030.
More details on the application process, including relevant documentation, will be published in the call(s) for proposals.
Projects will be selected based on:
The selection criteria will be weighted according to their relative importance. The final ranking of projects will be established based on comparing the scores across and within different sectors.
The calls for proposals will set the detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectorial balance.
The Innovation Fund will support up to 60% of the additional capital and operational costs linked to innovation.
The grants will be disbursed in a flexible way based on project needs, taking into account the milestones achieved during the project lifetime.
Up to 40% of the grants can be given based on pre-defined milestones before the whole project is fully up and running.
The Innovation Fund grants can be combined with the InvestEU investment support instrument.
Grants can also be combined with Horizon Europe.