The Innovation Fund is one of the world’s largest funding programmes for the demonstration of innovative low-carbon technologies.
It will provide around EUR 10 billion of support over 2020-2030 for the commercial demonstration of innovative low-carbon technologies, aiming to bring to the market industrial solutions to decarbonise Europe and support its transition to climate neutrality.
The goal is to help businesses invest in clean energy and industry to boost economic growth, create local future-proof jobs and reinforce European technological leadership on a global scale.
This is done through calls for large and small-scale projects focusing on:
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.
As the successor of the NER300 programme, the Innovation Fund improves the risk-sharing for projects by giving more funding in a more flexible way through a simpler selection process and is also open to projects from energy-intensive industries.
For the period 2020-2030, the Fund may amount to about EUR 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 instrumen t for delivering the EU’s economy-wide commitments under the Paris Agreement and its objective to be climate neutral by 2050, as recognised in the European Green Deal Investment Plan.
The Innovation Fund focuses on highly innovative technologies and big flagship projects within Europe 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 and Member States, Norway and Iceland.
At the same time, the projects need to be sufficiently mature in terms of planning, business model as well as financial and legal structure.
The f und supports cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example, through industrial symbiosis.
The Fund is also open to small-scale projects with total capital costs under €7.5 million.
There will be regular calls for proposals in the lifetime of the Innovation Fund.
The application process has two stages:
Project proponents can apply by submitting their projects when there is an open call for proposals. Projects can apply via the EU Funding and Tenders portal.
The first call for proposals for large-scale projects closed on 29 October 2020. For more information, check the large-scale projects tab.
There will be regular calls for proposals in the lifetime of the Innovation Fund.
The application process is simplified and has only one stage:
Project proponents can apply by submitting their projects when there is an open call for proposals.
The first call for proposals for small-scale projects is open until 10 March 2021. Projects can apply via the EU Funding and Tenders portal.
For more information, check the small-scale projects tab.
Projects will be selected based on:
The detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectorial balance, are set in each call for proposals. For small-scale projects, the selection criteria are simplified.
For the criteria of the first call for proposals for large-scale projects, check the Funding and Tenders Portal and for the criteria of the call for the small-scale projects, check the small-scale projects tab.
The Innovation Fund will support up to 60% of the additional capital and operational costs of large-scale projects and up to 60% of the capital costs of small-scale projects.
The grants will be disbursed in a flexible way based on project financing 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 European Commission, assisted by the implementing bodies INEA and EIB is tasked with the overall management of the Innovation Fund. The final responsibility for the selection of projects that will be awarded the Innovation Fund grant or the PDA support lies with the Commission.
For the development of the Innovation Fund, the Commission is assisted by the Innovation Fund Expert group. Information on the group and its meetings is available in the Register of Commission Expert Groups, while its work in preparing the first call for proposals is available under the large-scale projects tab.
The Commission has designated the Executive Agency for Innovation and Networks as the implementing body of the Innovation Fund. It will:
INEA will report regularly to the Commission and provide feedback on general orientations for further development of the Innovation Fund.
The European Investment Bank is responsible for the provision and management of the Project Development Assistance (PDA) support. The EIB will also be in charge of the monetisation of the Innovation Fund allowances and the management of the Innovation Fund revenues. The EIB will report regularly to the Commission.
Member States actively participate in the implementation of the Innovation Fund. They are consulted on key decisions, including:
If requested by the Commission, Member States will also advise and assist the Commission in setting general orientations for the Innovation Fund, as well as in addressing problems in the implementation of a project. Regulatory and financial support from a government or local authority will be an important element to evaluate the maturity of projects.
Innovation Fund grants can be combined with funding from other support programmes, for example:
A paper provides more clarifications on the combination of Innovation Fund support with other public support.
The Innovation Fund grant is not considered to be State aid. To cover the remaining costs, a project applicant can combine the Innovation Fund grant with public support by a Member State.
The amount of public support for a project will depend on the cumulation thresholds of the applicable State aid rules, such as:
The above-mentioned State aid measures are currently under review and possibly subject to update.
In 2019, the Commission organised an Innovation Fund Tour of workshops hosted by sector associations and Member States to prepare the first call for proposals.
The Commission presented the new funding instrument and the essential elements to be developed for the first call, while companies came forward with their project ideas and discussed key sector-specific issues.
The list of projects presented at the workshops helped the Commission gather real life examples as test cases for various methodologies on the selection criteria.
More information:
For more information you can contact the Innovation Fund Team at DG Climate Action at CLIMA IF EXPERTGROUP.
‘Large-scale’ are projects with a capital expenditure above EUR 7.5 million.
The first call for large-scale projects opened on 3 July 2020 with a budget of EUR 1 billion for breakthrough technologies for renewable energy, energy-intensive industries, energy storage, and carbon capture, use and storage. The call closed on 29 October 2020 and the next step is the admissibility and eligibility checks of all submissions.
We gathered feedback on the first stage application process of the call for large-scale projects. Thanks to all stakeholders who filled out the questionnaire. It will help improve the application process to future Innovation Fund calls.
The first call for large-scale project proposals closed 29 October 2020. The next step in the first call of the Innovation Fund is the admissibility and eligibility checks of all submissions. External evaluators will evaluate proposals that fulfil the admissibility and eligibility conditions against the award criteria.
Applicants will be informed about the results of the evaluation in the first quarter of 2021. The best ranked 70 projects will be invited to submit a full application for the second stage by 23 June 2021.
Rejected proposals that have the potential to improve their maturity may be invited for the project development assistance provided by the EIB. The information on the evaluation results from the second stage will be provided in the fourth quarter of 2021. Grants will be awarded at the end of 2021.
We received 311 applications for innovative clean tech projects, promising to reduce around 1.2 billion tonnes of CO2 during their operating period within the Innovation Fund. Further analysis shows the main technological pathways employed in the proposed projects.
The first call for large-scale projects closed 29 October 2020. More calls will take place at a later stage in time.
You will find all information and documentation needed at the Funding and Tenders Portal, including the call text, application forms, Frequently Asked Questions and the helpdesk for additional questions.
You can start your submission on the funding and tenders opportunities portal.
More information is also available on INEA website.
The first call will fund clean energy and clean industry innovative investments to contribute to the green recovery of EU economy and maintain the momentum in EU journey to climate neutrality.
Key elements of the first call for proposals for large-scale projects:
Event | Timing |
---|---|
Launch of large-scale call | 3 July 2020 |
Deadline for submission of applications to 1st stage | 29 October 2020 |
Information on evaluation results and invitation for the 2nd stage or PDA | Q1 2021 (indicative) |
Deadline for submission of applications to 2nd stage | Q2 2021 (indicative) |
Information on 2nd stage evaluation results | Q4 2021 (indicative) |
Award of the grants | End 2021 (indicative) |
The first call for large-scale projects was prepared throughout 2019 and 2020 with the active involvement of the Innovation Fund Expert Group.
On 5 June 2020, the Innovation Fund Expert Group had a live-streamed virtual meeting.
The following background documents informed the discussions:
These build on the discussion papers developed for the technical workshops in February and March and subsequent feedback received.
On 12 March, a web-streamed workshop addressed the project maturity, innovation and scalability selection criteria, due diligence, project development assistance and knowledge sharing under the Innovation Fund.
On 5-6 February 2020 a group of technical experts selected by the members of the Innovation Fund Expert Group (IFEG) met to discuss potential methodologies to estimate GHG emissions avoidance and relevant costs of innovative projects eligible for funding under the Innovation Fund, in the preparation for the first call for proposals expected for June 2020.
On 18 December 2019 the Innovation Fund Expert Group (IFEG) met to start the final preparation for the first call.
On 28 March 2019, the Innovation Fund Expert Group met to start the discussions on the preparation for the first call.
On 4 December 2018, the Innovation Fund Expert Group met to discuss the draft Delegated Regulation on the operation of the Innovation Fund.
On 8 June 2018, the Innovation Fund Expert Group met for the first time to discuss its role, the lessons learned from the NER 300 programme and the rules for financing, application, project selection and governance of the Innovation Fund.
‘Small-scale’ are projects with total capital costs below EUR 7.5 million.
The first call for small-scale projects opened on 1 December 2020 with a budget of EUR 100 million for breakthrough technologies for renewable energy, energy-intensive industries, energy storage, and carbon capture, use and storage.
It is eligible for projects with a capital expenditure comprised between EUR 2.5 and 7.5 million and focuses on innovative yet mature technologies that are ready to reach the market.
The first call for small-scale projects is open until 10 March 2021.
You will find all information and documentation needed at the Funding and Tenders Portal, including the call text, application forms, Frequently Asked Questions and the helpdesk for additional questions.
More information is also available on INEA’s website.
Innovation Fund webinar 1: small-scale call application step-by-step
The first call for small-scale projects will fund innovative projects in clean energy and industry to support the deployment of key technologies needed to reach climate neutrality and contribute to Europe’s green recovery.
Key elements of the first call for small-scale projects:
The emphasis is on truly innovative projects that are ready for commercial deployment, for instance delivering installations to a customer in a new market segment. Besides, three key activities are encouraged: products that substitute carbon-intensive ones, net carbon removal innovations and direct air capture.
Event | Timing |
---|---|
Launch of small-scale call | 1 December 2020 |
Deadline for submission of applications | 10 March 2021 |
Information on evaluation results and invitation for grant preparation | August 2021 (indicative) |
Award of the grants | As of Q4 2021 (indicative) |
The first call for small-scale projects was prepared throughout 2020 with the active involvement of the Innovation Fund Expert Group.
Innovation Fund Expert Group in the Register of Commission Expert Groups