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Today, the European Commission is launching the third call for small-scale projects under the Innovation Fund, one of the world's largest funding programmes for the deployment of innovative

low-carbon technologies. Financed by revenues from the auctioning of emission allowances from the EU's Emissions Trading System (EU ETS), this call for small-scale projects will further boost the deployment of industrial solutions to decarbonise Europe.

The new call will make €100 million in grant funding available to small-scale projects with a capital expenditure between €2.5 and €7.5 million in the areas of renewable energy, decarbonisation of energy-intensive industries, energy storage, and carbon capture, use and storage. These technologies should be sufficiently mature and have strong potential to achieve significant greenhouse gas emission reductions compared to conventional technologies.

The Innovation Fund can finance up to 60% of a small project's total capital expenditure. This will help pioneering innovative technologies to overcome the risks usually linked to commercialisation and to enter the market. Projects will be evaluated based on their potential to avoid greenhouse gas emissions, innovation, their financial, technical and operational maturity, and their potential for scaling up as well as their cost-efficiency.  Previous calls have selected projects to advance first-of-a-kind processes, like demonstrating the use of hybrid furnaces to electrify part of glass wool and glass production, which traditionally uses fossil fuels.

Up to 20 projects evaluated as promising but not sufficiently mature to qualify for a grant may receive project development assistance (PDA) from the European Investment Bank (EIB). Two projects – CO2ncrEAT and Hypush – that have benefitted from PDA services from the EIB were pre-selected in the second small-scale call, showing how this service can help to build a successful project application. Projects that were unsuccessful in previous small-scale calls are also encouraged to reapply. The call is open until 19 September 2023 for projects that are implemented in any EU Member State, Iceland or Norway.

Background

The Innovation Fund aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and support Europe's transition to climate neutrality.

Two earlier small-scale calls resulted in the selection of 47 projects. Within the first call, 30 projects received altogether a total grant of €109 million. The EU is investing €62 million in 17 small-scale projects from the second call. These 17 projects are still finalising their individual grant agreements, expected in the second quarter of 2023. Furthermore, the latest call for large-scale projects closed on 16 March 2023 with 239 applications received, which are currently in the evaluation process, with results expected in summer 2023.

The Innovation Fund is implemented by the European Climate, Infrastructure and Environment Executive Agency (CINEA), while the European Investment Bank provides project development assistance to promising projects that are not sufficiently mature. The political agreement strengthening and expanding the EU ETS, reached in December 2022, will increase the size and coverage of the Innovation Fund when it enters into force.

Projects can apply via the EU Funding and Tenders portal, where information on the procedure is available .  Applicants will be informed about the evaluation results in the first quarter of 2024. Grants are expected to be awarded to successful projects in June 2024.