The European Commission has awarded €2.9 billion in grants to 61 projects under the EU’s Innovation Fund, backing the deployment of net-zero and low-carbon technologies across multiple industrial sectors. The funding is drawn from revenues of the EU Emissions Trading System (ETS).
The Innovation Fund is one of the world’s largest programmes for bringing climate technologies to market. It supports first-of-a-kind or flagship projects capable of delivering material greenhouse-gas reductions, spanning energy-intensive industries, renewables, energy storage, hydrogen, carbon capture, utilisation and storage (CCUS), net-zero mobility and buildings, and cleantech manufacturing.
According to the Commission’s announcement, the new awards will accelerate industrial decarbonisation by scaling proven concepts into commercial operation. The selection covers projects of different sizes, from large-scale industrial platforms to medium- and small-scale deployments, alongside pilot lines for manufacturing components used in clean-energy supply chains. This mix is designed to reinforce European manufacturing capacity for net-zero technologies as envisaged in the EU’s climate neutrality objective for 2050.
Early breakdowns published by market sources indicate the package spans several thematic windows. Ten large-scale decarbonisation projects (€1.26bn) focus on process-emissions cuts in cement and lime, refinery operations, chemicals, and enabling CO₂ transport and storage infrastructure. Nineteen medium-scale projects (capital expenditure of €20–100m) together receive €459m. A further 12 awards in cleantech manufacturing—covering components for renewables, energy storage systems, heat pumps and hydrogen—share €775m. In transport, 23 projects (~€1bn) include sustainable fuel production for aviation and shipping (such as e-SAF and e-methanol) and other advanced fuels. The Commission says the portfolio is expected to avoid about 221 million tonnes of CO₂-equivalent over its first decade of operation.
The Innovation Fund is financed by the sale of ETS allowances and therefore expands in line with carbon market revenues. Since its launch in 2020, cumulative Innovation Fund support awarded has exceeded €12 billion to roughly 200 projects prior to the latest round, with the total rising further following these selections. The programme is administered by the European Climate, Infrastructure and Environment Executive Agency (CINEA) for the Commission’s Directorate-General for Climate Action.
The €2.9bn announcement follows a record 2024 call in which 85 projects were selected for €4.8bn, including for the first time a dedicated cleantech manufacturing focus. That 2024 cohort brought the Fund’s total support above €12bn and widened the mix of scales from pilots through to large-scale industrial deployments.
Today’s awards are intended to reinforce Europe’s industrial base for clean technologies at a time of heightened competition for manufacturing capacity and supply chains. By advancing commercial-scale deployment, the Commission aims to create bankable references that can unlock additional private investment, shorten time-to-market for emerging technologies, and support emissions cuts in hard-to-abate sectors. The selection also seeks to improve resilience by localising production of key components in areas such as batteries, heat pumps and renewables equipment.
Projects supported by the Innovation Fund are required to demonstrate innovation beyond the state of the art and a credible pathway to significant emissions avoidance. Awards are typically disbursed against milestones during construction and early operation, with monitoring of performance against greenhouse-gas and delivery targets. The Fund can cover up to 60% of relevant capital and operational costs, with the remainder expected from private and other public sources.
CINEA will now proceed to grant-agreement preparation with the selected beneficiaries. This stage covers final due diligence on scope, budget, timelines and environmental safeguards, after which projects can draw down tranches as they meet agreed milestones. The Commission has signalled further Innovation Fund opportunities, including regular calls and auctions, to maintain a pipeline from research and demonstration into deployment.
Context: The Innovation Fund sits alongside other instruments intended to support decarbonisation and industrial competitiveness, including Horizon Europe for research and innovation, and ETS-driven carbon-pricing incentives. By combining funding with the ETS price signal, the Commission aims to lower risk for first movers and accelerate cost curves for technologies needed to reach the EU’s 2030 and 2050 climate targets.
