Innovation Fund: Development of innovative
low-carbon technologies

Innovation Fund
Fernando Gomez
Fernando Gomez

Innovation Fund: Development of innovative low-carbon technologies

The Innovation Fund (IF) program is one of the most important global initiatives for financing the development of innovative low-carbon technologies. The new DG CLIMA programme will provide a great opportunity to generate truly innovative projects, ideas and technologies that will help us change our industrial model towards a neutral and ecologically sustainable emissions system.

FI will be a key financing instrument for meeting the EU’s financial commitments under the Paris Agreement, and its goal of creating a climate-neutral Europe by 2050, as also recognised in the European Green Pact Investment Plan


  • Innovative low-carbon technologies and processes in energy-intensive industries, including carbon-intensive substitutes.
  • Carbon Capture and Utilization (CCU)
  • Construction and operation of carbon capture and storage (CCS) systems
  • Innovative generation of renewable energy
  • Energy storage


The European Union Emissions Trading Scheme (EU ETS), is the largest carbon pricing system in the world and will provide revenues to the IF programme through the auctioning of 450 million euros of emission allowances from 2020 to 2030, as well as any funds not implemented in the NER300 programme. For the period 2020-2030, funding may amount to around 10 billion euros, depending on the price of the carbon credits issued.

The first call for large scale innovative proposals (Large-scale Projects, above 7.5 million euros, with a deadline of 29 October 2020) aims to contribute to the EU’s economic recovery in an environmentally sustainable way, helping companies to invest in clean energy and industries and boost their economic growth, create new local jobs and generate a competitive advantage for the EU’s industrial sector.

FI will focus on truly innovative technologies and large flagship projects with European added value that can deliver significant reductions in CO2 emissions. The aim is to share the risk with project promoters to assist them in the demonstration phase of highly innovative and one-of-a-kind projects.

The programme will also be open to small-scale projects with a total capital cost of less than EUR 7.5 million, which can benefit from simplified application and selection procedures. This programme will be opened at the end of 2020.

Projects will be selected on the basis of Efficiency in avoiding greenhouse gas emissions, Degree of innovation, Project maturity, Scalability and Cost efficiency.

  1. Expression of interest, where the effectiveness of the project, the degree of innovation and the level of maturity will be evaluated. Projects that meet only the first two criteria are eligible for the Project Development Assistance (PDA) phase.
  2. Full proposal, where projects are assessed against all criteria, including scalability and cost efficiency.

* For small-scale projects, the application process will have a single stage.

For grant funding, FI will support up to 60% of additional capital and operating costs related to innovation or technological development. Grants will be disbursed in a flexible manner according to the project’s financing needs, and taking into account the milestones achieved during the life of the project (measurable and verifiable reduction of GHG emissions).

In addition, up to 40% of the grants may be awarded based on predefined milestones, even before the project is fully operational.


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