innovation fund

INNOVATION FUND: LOW CARBON INNOVATION

On 3rd November the European Commission (EC) launched a new call for EU projects aiming at reducing Greenhouse gas emissions. The programme named Innovation Fund launched for the first time in 2020, addresses in this call large-scale projects with a capital expenditure (CAPEX) of minimum €7,5M, overall €3 Bn are available to fund innovative projects which have the capacity to significantly contribute to reduce Green House Gas (GHG) emissions. This call is twice as high as last year’s large scale call and three times higher than 2020’s call.

This is the 5th call which the EC opens, the 4 previous calls have already committed more than €2.7 bn altogether. There has been already two calls opened for Large and Small scale projects respectively in 2020 and 2021. Small scale projects are below €7,5M CAPEX.

The Innovation Fund aims to support the funding of innovative low carbon technologies and processes, with the objective of bringing to the market industrial solutions to decarbonise Europe. It is financed thanks to the Emission Trading Scheme (ETS), depending on carbon price achieved, between 2020 and 2030 the Innovation Fund could total €38 Bn to finance projects. The EU initiative is one of the largest of the kind in the world, it is one of the key instruments proposed by Europe to reduce its emissions by at least 55% by 2030.

The call opened on 3rd November and closing on 16th March will continue to fund low-carbon technologies and processes projects allowing to reduce GHG emissions such as Carbon Capture and Sequestration or Use (CCS/CCU), innovative renewable energy or storage technologies.

However this year the call aims to put a stronger focus on solutions helping the electrification of industry (to move away from emission intensive energy consumption) and hydrogen with €1 bn set aside for that priority.

Manufacturing in Europe of cleantech components is also a second novelty included in this year call: the EC encourages projects aiming to produce in Europe renewables installations components (solar, wind, etc), hydrogen electrolyser and fuel cells, energy storage solutions and heat pumps.

Finally, the call also foresees to support highly innovative midsize pilot projects, this the third novelty of the Innovation Fund large scale call 2022.

To select the best projects, the EC will consider 5 criteria: the degree of innovation of the project, the absolute and relative GHG emissions reduction enabled, the way the grant is spent (cost efficiency), how mature projects are from a financial, operational and technological point of view and how scalable they are.

Learn more about the Innovation Fund program and its advantages

CALL: Innovation Fund
APPLICATION DEADLINE: The third call for Large-scale projects opened on 3 November 2022 and will remain open until 16 March 2023.
ORGANISING ENTITY: European Commission
OBJECTIVE:

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.
  • The project must be located in the EU, Norway or Iceland

This call has two types of funding depending on the volume of expenditure of the project:

Large Small (close)
Size of the project > 7.5M€ CAPEX < 7.5M€ CAPEX
Eligible Activities (a) support projects demonstrating highly innovative technologies, processes, business models or products/services, that are sufficiently mature and have a significant potential to reduce greenhouse gas emissions

(b) offer financial support tailored to market needs and risk profiles of eligible projects, while attracting additional public and private resources.

Application process One phase One phase
Volume of support Up to 60% of the additional costs Up to 60% of total CAPEX

LARGE SCALE CALL:

General decarbonisation sub-call:

  • Activities that support innovation in low-carbon technologies and processes in sectors listed in Annex I to the EU ETS Directive 2003/87 including environmentally safe carbon capture and utilisation (CCU) that contributes substantially to mitigating climate change, as well as products substituting carbon-intensive ones produced in sectors listed in Annex I to the EU ETS Directive
  • Activities that help stimulate the construction and operation of projects that aim at the environmentally safe capture and geological storage of CO2 (CCS)
  • Activities that help stimulate the construction and operation of innovative renewable energy and energy storage technologies.

Innovative electrification in industry and hydrogen sub-call

  • Support projects on innovative electrification in industry and innovative hydrogen production and use, in support of the 2030 targets for renewable hydrogen established in the REPowerEU Action Plan, and to decrease the use of and dependency on imported fossil fuels.
  • The following activities can be funded under this topic:
    • Activities that support the innovative direct electrification of industry replacing conventional fossil fuels use, both in sector-specific and cross-sectoral uses.
    • Activities that support innovative hydrogen production and applications (i.e. hydrogen use as an energy carrier, or hydrogen as a reducing agent, or as a feedstock) in industry.

Clean-tech manufacturing sub-call

  • Support projects on innovative clean-tech manufacturing of components for hydrogen production, renewable energy and energy storage in order to build industrial capacity, technology leadership, supply chain resilience and strategic autonomy on these decarbonisation technologies within the EU.
  • Construction of manufacturing facilities and their operation to produce specific components for:
    • renewable energy installations (in photovoltaics, concentrated solar power, on-shore and offshore wind power, ocean energy, geothermal, solar thermal, and others), including their connection to the electricity/heat grid;
    • electrolysers and fuel cells;
    • energy storage solutions for stationary and mobile use for intra-day and long duration storage;
    • heat pumps.

Mid-sized pilots sub-call

  • Support highly innovative, disruptive or breakthrough technologies in deep decarbonisation needed for achieving the climate neutrality goal and strengthening synergies with the Horizon Europe programme.
  • Up to 40 Million euro grants can be requested for a project.

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