The European Union Emissions Trading Scheme (EU ETS), is the largest carbon pricing system in the world and will provide revenues to the IF programme through the auctioning of 450 million € of emission allowances from 2020 to 2030, as well as any of the funds not implemented in the NER300 programme. For the period 2020-2030, funding may amount to around € 20 billion, depending on the price of the carbon credits issued.
Innovation Fund aims to contribute to the economic recovery of the EU in an environmentally sustainable way, helping companies to invest in energy and clean industries and boost their economic growth, create new local jobs and generate a competitive advantage for the EU’s industrial sector.
The first call for large scale innovative proposals was open until October 2020 and the first to submit projects with a total capital expenditure between 2,500,000 and 7,500,000 euros (Small scale) was open until March 10, 2021. Now it is the turn of the second call for large-scale projects which will open on 26 October 2021, with an estimated budget of between €1.3 and €1.5 billion, depending on the carbon price. The application and selection process will have a single stage.
The project evaluation methodology will remain largely similar to that of the first call and the call documents will be improved to better guide applicants. The deadline for submitting an application is expected to be 1 March 2022. Information on the evaluation results will be provided in July 2022 and grants will be awarded in the last quarter of 2022.
Projects will be selected based on Efficiency to avoid greenhouse gas emissions, Degree of innovation, Project maturity, Scalability and Cost efficiency.
The Innovation Fund focuses on the following initiatives and types of projects:
Innovative low-carbon technologies and processes in energy-intensive industries, including carbon-intensive substitutes.
Carbon Capture and Utilization (CCU)
Construction and operation of carbon capture and storage (CCS) systems
Innovative generation of renewable energy
Learn more about the Innovation Fund program and its advantages
APPLICATION DEADLINE: The second call for small-scale projects will open in March 2022 and will remain open for five months.
ORGANISING ENTITY: European Commission
The Innovation Fund (IF) program is one of the most important global initiatives in financing for the development of innovative low-carbon technologies. IF focuses on truly innovative technologies and large flagship projects with European added value that can bring significant reductions in CO2 emissions. The aim is to share the risk with the project promoters to help them in the demonstration phase of highly innovative and unique projects (first-of-a-kind highly innovative Projects).
Successor to the NER 300 program (2012-2014) funded by the EU Emissions Trading System includes the following improvements:
Open to energy-intensive industry projects
Better distribution of project risks (higher subsidies)
A more flexible support, following the cash flow needs of the projects (up to 40% pre-payment of the grant).
Simplified governance and simplified decision making
Applicants must be legal entities: private, public or international organizations.
Applicants must be directly responsible for the implementation and management of the project (no intermediaries)
Applicants may apply on their own or within a consortium.
TYPE AND AMOUNT OF FUNDS
This call has two types of funding depending on the volume of expenditure of the project:
Large (July 2021) (open)
Size of the project
> 7.5M€ CAPEX
< 7.5M€ CAPEX
Carbon capture, use and storage
Volume of support
Up to 60% of the additional costs
Up to 60% of total CAPEX
Activities to support innovation in low carbon technologies and processes in the sectors listed in Annex I of the ETS Directive, including
environmentally safe carbon capture and utilization (ECC) that contributes substantially to climate change mitigation, as well as to substitutes.
Activities that help stimulate the construction and operation of projects that aim to capture and geologically store CO2 in an environmentally safe manner (CCS)
Activities that help stimulate the construction and operation of renewable energy and energy storage technologies
The possible eligible applications for the projects are very varied:
Modifications to existing plants
Innovative fuels / electro-fuels / use of biomass / electrification of existing plants
New products that save emissions in their use
New products that save emissions in their end-of-life treatment