The Innovation Fund is one of the most important funding programs for the demonstration of innovative low-carbon technologies.
It is a key funding instrument for delivering on EU economic commitments under the Paris Agreement and its goal of being a climate-neutral Europe by 2050, as also recognized in the investment plan of the European Green Deal.
Financial envelope for implementation
The Fund, whose budget for the period 2020-2030 amounts to around 40 billion euros, is financed by the European Union Emissions Trading System (EU ETS).
The Innovation Fund supports investments in:
The evaluation of the projects is based on five Award Criteria:
- Degree of Innovation;
- Effectiveness of greenhouse gas (GHG) emissions avoidance;
- Project Maturity;
- Cost Efficiency.
In 2023, amendments to the EU ETS Directive underwent an enhancement, which notably bolstered the Innovation Fund in the following ways:
- Increased Size: The overall size of the Innovation Fund was expanded from 450 million ETS allowances to approximately 530 million ETS allowances
- Expanded Scope: The scope has been broadened to encompass new sectors (such as maritime, aviation); Additionally, medium-scale projects are now elegible. Starting in 2025, the Do Not Significant Harm (DNSH) principle will be applied with a stronger emphasis on multiple environmental impacts
- Introduction of Financial Instruments: New financial instruments, referred to as 'Competitive Bidding', have been introduced
- Geographical Balance: There is a heightened focus on achieving geograpgical balance, including providing technical assistance to Member States with low effective participation.
With these enhancements, the Innovation Fund is well-prepared to contribute to the objectives of the European Green Deal, lead in clean technology innovation and serve as global example.
Contact us for more information on "Innovation Fund" and on other European concessions.