European Commission’s €4 billion Innovation Fund call for proposals expands to include maritime sector

The European Commission has announced the opening of the Innovation Fund’s 2023 call for proposals, boasting a historic budget of €4 billion. The significant financial injection aims to accelerate the deployment of cutting-edge decarbonization technologies, and the funds for this initiative are sourced from the EU Emissions Trading System (EU ETS).

Port of Hamburg/Illustratio; Image by Offshore Energy

In comparison to previous calls, the Commission has doubled the budget specifically allocated for cleantech manufacturing projects. A substantial amount of €1.4 billion is earmarked to fortify industrial manufacturing capacity, enhance technology leadership, and bolster supply chain resilience throughout Europe.

Importantly, following the recent revision of the EU ETS Directive, the Innovation Fund is now open to the maritime, road transport, and buildings sectors, in addition to technologies in energy-intensive industries (including aviation), renewable energy, or energy storage.

The call for proposals encompasses five distinct topics, each with its allocated budget and capital expenditure (CAPEX) requirements:

  1. General Decarbonisation (Large-scale): €1.7 billion available for projects with CAPEX above €100 million
  2. General Decarbonisation (Medium-scale): €500 million available for projects with CAPEX between €20 million and €100 million
  3. General Decarbonisation (Small-scale): €200 million available for projects with CAPEX between €2.5 million and €20 million
  4. Cleantech Manufacturing: €1.4 billion available for projects with CAPEX above €2.5 million, focusing on the manufacturing of components for renewable energy, energy storage, heat pumps, and hydrogen production
  5. Pilot: €200 million available for projects with CAPEX above €2.5 million, emphasizing deep decarbonization.

The Commission said that the Innovation Fund can cover up to 60% of a project’s relevant costs. Projects will undergo evaluation based on criteria such as their potential to reduce greenhouse gas emissions, level of innovation, maturity, replicability, and cost efficiency.

Project promoters are encouraged to apply through the EU Funding and Tenders Portal by April 9, 2024, at 17:00 (CET). An informational event, the IF23 Call Info Day, is scheduled online on December 7, 2023, providing insights into new features, the application process, and a chance to interact with the European Climate, Infrastructure, and Environment Executive Agency (CINEA).

Successful applicants will be notified of evaluation results in the fourth quarter of 2024, with grant agreements expected to be signed in the first quarter of 2025.

Against the backdrop of an estimated revenue of €40 billion from the EU Emissions Trading System between 2020 and 2030, the Innovation Fund serves as a crucial financial catalyst for companies and public authorities to invest in state-of-the-art low-carbon technologies, contributing to Europe’s journey towards climate neutrality. The Innovation Fund has already awarded approximately €6.5 billion to over 100 projects through previous calls for proposals.

Simultaneously, the Innovation Fund launched the first pilot auction under the European Hydrogen Bank, offering an €800 million budget for project developers in the EEA.