BRUSSELS, Belgium / EuroWire.IO / – European Commission has allocated €3.4 billion from the Innovation Fund to 77 projects focused on net-zero technologies. The announcement, made on October 19, revealed the successful recipients of the fund’s net-zero technologies call. The funds originate from revenues generated by the EU Emissions Trading System. These projects are distributed across 23 countries within the European Economic Area and encompass a broad spectrum of clean industrial technology innovations.
It is estimated by the Commission that over their initial decade of operation, these initiatives could prevent approximately 290 million tonnes of carbon dioxide equivalent emissions. This figure translates to about one tonne every second for ten years. The projects aim to enhance Europe’s leadership and competitiveness in clean technology sectors, while also bolstering energy independence and security. Contributing to the EU’s objective of achieving climate neutrality by 2050, the funding is a significant step forward.
Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, emphasized that the projects demonstrate how European innovators are transforming climate ambitions into industrial prominence. He noted that reinvesting revenues from the carbon market supports companies in bringing clean technologies to market. The call, launched in December 2025, attracted 358 applications requesting €17.5 billion, against an available budget of €2.9 billion. All five categories of the call were oversubscribed. The Innovation Fund ranks among the largest global programs funding innovative low-carbon solutions.
Funding primarily directed toward large-scale and manufacturing projects
Twelve large-scale initiatives sought approximately €1.58 billion, representing the largest portion of the total funding. An additional 12 projects within clean-tech manufacturing requested nearly €895 million. Seventeen projects classified as medium-scale were selected, totaling about €458 million. Small-scale projects, numbering twenty, asked for around €124 million, while 16 pilot projects targeted approximately €394 million. These projects encompass sectors such as energy-intensive industries, renewable energy, energy storage, and net-zero mobility, collectively representing all 77 chosen initiatives.
For the first time, the Innovation Fund will support a project involving a small modular nuclear reactor, alongside its inaugural direct air carbon capture and storage project. Six initiatives are dedicated to processing and recycling critical raw materials, including rare earth permanent magnets and batteries. Other projects focus on developing advanced alternative fuels and managing industrial carbon emissions. The same fund has previously backed clean industry projects.
Grant agreements expected to be finalized early 2027
An additional 84 projects passed the evaluation phase but did not receive funding due to budget limitations. These projects, together with the 77 selected ones, will obtain the STEP Seal quality label, aiding their efforts to secure other sources of financing. Moreover, 160 proposals remain eligible for project development support from the European Investment Bank. Independent experts assessed applications based on criteria such as emissions reduction, innovation, maturity, replicability, and cost efficiency. The seal is part of the Strategic Technologies for Europe Platform.
The proponents of the selected projects are now preparing grant agreements with the European Climate, Infrastructure and Environment Executive Agency, with the aim of finalizing those arrangements 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 topic. The fund also conducts hydrogen and industrial heat auctions. Currently, the portfolio comprises roughly 320 projects with nearly €17 billion committed.