BRUSSELS, Belgium / EuroWire.IO / – The European Commission has allocated €3.4 billion in funding from the Innovation Fund to 77 initiatives focused on net-zero technologies. On October 19, the Commission revealed the results of the fund’s call for proposals supporting net-zero innovations. This funding source is derived from revenues generated by the EU Emissions Trading System. The chosen projects span 23 countries within the European Economic Area and encompass a broad spectrum of sustainable industrial technologies.
It is projected that these initiatives could prevent approximately 290 million tonnes of carbon dioxide equivalent emissions during their initial decade of operation. This equates to roughly one tonne every second over ten years. These investments aim to reinforce Europe’s leadership in clean technology and boost industrial competitiveness. They are also intended to promote energy independence and security, aligning with the EU’s objective of reaching climate neutrality by 2050.
Wopke Hoekstra, the Commissioner for Climate, Net Zero and Clean Growth, highlighted that these projects exemplify European innovators transforming climate goals into industrial advancements. He emphasized that reinvesting revenues from carbon markets helps companies bring clean technologies to market. The call, launched in December 2025, attracted 358 applications requesting a total of €17.5 billion, significantly surpassing the available €2.9 billion budget. All five categories of the call were oversubscribed. The Innovation Fund stands as one of the globe’s largest programs dedicated to funding innovative low-carbon solutions.
Major projects dominate funding distribution
Twelve large-scale initiatives sought around €1.58 billion, representing the largest portion of the allocated funds. An additional 12 projects in clean-tech manufacturing requested nearly €895 million. Seventeen medium-scale projects were selected, valued at approximately €458 million. Small-scale projects requested roughly €124 million across 20 proposals, while 16 pilot initiatives aimed for about €394 million. The portfolio spans sectors including energy-intensive industries, renewable energy, energy storage, and net-zero mobility, with all five topics covered by the 77 selected projects.
For the first time, the Innovation Fund will support a small modular nuclear reactor project. It will also fund its inaugural direct air carbon capture and storage project. Six projects focus on processing and recycling critical raw materials, such as rare earth permanent magnets and batteries. Other selected initiatives involve advanced alternative fuels and industrial carbon management. Previously, the Commission endorsed clean industry projects through the same fund.
Funding agreements anticipated in early 2027
An additional 84 proposals passed the evaluation process but could not be funded due to budget constraints. These, along with the 77 chosen projects, will receive the STEP Seal quality label to support their efforts in attracting further financing. Moreover, 160 other proposals remain eligible for project development assistance from the European Investment Bank. Evaluations by independent experts considered factors such as emissions reduction potential, innovation, maturity, replicability, and cost efficiency. The seal is part of the Strategic Technologies for Europe Platform.
Currently, the selected project promoters are preparing grant agreements with the European Climate, Infrastructure and Environment Executive Agency. The Commission expects to announce the outcomes of this process in the first quarter of 2027. The upcoming calls for the Innovation Fund are scheduled to open in early December 2026, including a €1 billion clean-tech manufacturing focus. Additionally, the fund manages hydrogen and industrial heat auctions. Its portfolio now comprises around 320 projects with nearly €17 billion in commitments.