What is the Innovation Fund?
The Innovation Fund (IF) was started in 2020 as the EU’s main tool to support Europe’s transition to climate neutrality. The fund is fed by revenues from the EU Emissions Trading System (estimated at 40 billion euros in 2020-2030). This budget is used to provide grants for companies and public bodies investing in cutting-edge low-carbon technologies.
The fund works with official application rounds (‘calls for proposals’). The most recent round was launched on 23 November 2023, and is often referred to as the ‘IF23 Call’. The call has a record budget of 4 billion euros and is open for proposals until 9 April 2024 (17:00 CET).
What are the themes of the new call?
The new call focuses on ‘Net Zero Technologies’ and offers grant opportunities for innovations that match the following five topics:
- General decarbonisation large-scale projects:
For this topic, the EU is looking for projects with a total capital expenditure (CAPEX) of 100 million euros and more. Projects may include innovation in low-carbon technologies and processes; environmentally safe carbon capture and utilisation (CCU); and innovative renewable energy and energy storage technologies. Available budget for this topic: 1.7 billion euros.
- General decarbonisation medium-scale projects:
This addresses the same themes as mentioned in the topic above, only now for medium-sized projects (CAPEX between 20 million and 100 million euros). Available budget for this topic: 500 million euros.
- General decarbonisation small-scale projects:
This addresses the same themes as the two topics above, but only for ‘small’ projects (CAPEX between 2,5 million and 20 million euros). Available budget for this topic: 200 million euro.
- Cleantech manufacturing:
This category is aimed at manufacturing components for hydrogen production (including electrolysers and fuel cells), renewable energy installations (photovoltaics, solar power, wind power, ocean energy, geothermal, solar thermal etc.), batteries and other energy storage solutions, and heat pumps. The project’s CAPEX must be more than 2.5 million euro. Available budget: 1.4 billion euros.
Finally, the Innovation Fund is looking for highly innovative pilot projects, aimed at validating, testing and optimizing innovative technologies focusing on deep decarbonisation (including safe CCU/CCS and pilots with substitutes for carbon-intensive products. Pilots projects must take place in an operational environment, and have a CAPEX above 2.5 million euros. The IF grant can amount to a maximum of 40 million euros per pilot project. Available budget: 200 million euros.
Key grant conditions
As explained above, only projects with a significant financial scale are eligible for the Innovation Fund. Don’t let that deter you, however, because the grant payments are also substantial: the Innovation Fund can cover up to 60% of a project’s relevant costs! But of course the Innovation Fund has more grant conditions. To name a few other key requirements (and guidelines):
- LOCATION: projects must be implemented in one of the EU member states, Norway, Iceland, Liechtenstein or (in some cases) Northern Ireland.
- IMPACT: projects must contribute substantially to mitigating climate change (in particular for unavoidable process emissions, as well as products substituting carbon-intensive ones).
- DURATION: projects must reach financial close within four years after the grant signature and operate for a minimum of five years after entry into operation (except for small-scale and pilot projects which have a three-year minimum operation period). NB: pilot and cleantech manufacturing projects are encouraged to achieve financial close within two years (and entry into operation within four years) after grant agreement.
Transport and buildings sectors
Starting with this IF23 Call, the Innovation Fund is also open for three new sectors: the maritime, road transport and buildings sectors. This expansion offers new opportunities for innovations in low- and zero-carbon technologies and processes that concern the consumption of fuels in buildings and road transport. And as for the maritime sector, the fund can now support breakthrough innovations in the field of electrification, sustainable fuels, energy efficiency, zero-emission propulsion technologies, or innovative infrastructure for EU container transhipment ports.
Is your company working on innovations in the field of energy or climate that could have a major impact for Europe? And are you wondering whether you can apply for a grant from the Innovation Fund? If so, you can of course consult this extensive project overview. Or… you can submit your plans to our Innovation Fund experts. They can tell you what your chances are, and help to prepare an optimal grant application.
PNO has a lot of experience with the Innovation Fund. We have collaborated on many successful grant applications and high-class innovation projects. Our results are partly due to the cooperation between our experienced grant and innovation experts, who are active in various country offices, industry sectors, expert teams and PNO labels (EGEN, PNO Chemistry, CiaoTech, ARTTIC etc). Our international Servicedesk can be reached via 0031 88 838 13 81 or send a message.