BRUSSELS, Belgium / EuroWire.IO / – The European Commission has allocated €3.4 billion from the Innovation Fund to support 77 sustainable technology projects across Europe. The announcement was made on Monday, October 19, as part of the fund’s call for net-zero solutions. These grants are financed through revenues generated by the EU Emissions Trading System. Projects are spread across 23 countries within the European Economic Area, encompassing everything from industrial facilities to small pilot initiatives.
The European Commission estimates that these projects could avoid approximately 290 million tonnes of carbon dioxide equivalent emissions within their first decade of operation, equating to roughly one tonne per second over ten years. The Commission highlighted that these investments will bolster Europe’s industrial competitiveness in clean technology and are also expected to enhance energy independence and security for the bloc. Contributing to the EU’s goal of achieving climate neutrality by 2050, the projects play a crucial role in the broader strategy.
Wopke Hoekstra, the Commissioner for Climate, Net Zero and Clean Growth, emphasized that European innovators are transforming climate ambitions into industrial leadership. He added that channeling emissions trading revenues into clean technology fosters market entry for firms and supports emission reductions. Competition for the available funding was fierce, with the call launched in December 2025 attracting 358 applications requesting €17.5 billion, against an available budget of €2.9 billion. Each of the five topics within the call received more applications than available funds.
Nuclear and Direct Air Capture Projects Included in the Portfolio
Among the selected projects is the Innovation Fund’s first small modular reactor initiative, reflecting the EU’s growing interest in nuclear power. It also features the first direct air carbon capture and storage project to secure support. Additionally, six projects focus on the processing and recycling of critical raw materials, such as work related to rare earth permanent magnets and batteries. These initiatives are aligned with the Net-Zero Industry Act and the RESourceEU Action Plan.
The portfolio further encompasses projects targeting energy-intensive industries, renewable energy sources, energy storage solutions, net-zero mobility, advanced alternative fuels, and industrial carbon management. Regarding funding requests by topic, 12 large-scale projects sought approximately €1.58 billion, while 12 manufacturing projects aimed for nearly €895 million. Seventeen medium-scale initiatives requested around €458 million, and 20 small-scale projects sought about €124 million. Additionally, 16 pilot projects requested roughly €394 million. The largest share of requested funds was allocated to large-scale projects.
Recognition for Projects Without Funding via Quality Seal
A total of 84 proposals satisfied the evaluation criteria but did not receive grants due to budget limitations. These will be awarded the STEP Seal, alongside the 77 successful projects, to help facilitate future funding from other sources. Furthermore, 160 other proposals are eligible to apply for project development assistance from the European Investment Bank. The current Innovation Fund portfolio comprises around 320 projects, with nearly €17 billion in commitments.
Project promoters are in the process of finalizing grant agreements with the European Climate, Infrastructure and Environment Executive Agency. The European Commission expects to announce the results in the first quarter of 2027. Upcoming Innovation Fund calls are anticipated to open in early December 2026, including a €1 billion funding topic dedicated to clean-tech manufacturing. The fund leverages an estimated €40 billion in carbon market revenues generated from 2020 to 2030. Independent experts assessed each application based on criteria such as emissions reduction potential, innovation level, maturity, and cost efficiency.