🌱 What does the EU’s Innovation Fund do?
The EU’s Innovation Fund “is one of the world’s largest funding programmes for the deployment of net-zero and innovative technologies”. It aims to “support Europe's transition to climate neutrality” by 2050. It does this by “creat[ing] financial incentives for companies and public authorities to invest in […] low-carbon technologies”.
🌱 Why is funding being given out?
Between 2020 and 2030, the EU Emissions Trading System (ETS) collected an estimated €40 billion. This budget is used by the Innovation Fund to finance low-carbon technologies. Through past calls, the fund allocated around €12 billion to over 200 innovative projects. Additionally, nearly €700 million was allocated to six projects through the European Hydrogen Bank’s first auction.
🌱 What is planned?
On 3 December 2024, the European Commission announced that it is planning further funding of net zero technologies. Through the Innovation Fund and using revenues from the ETS, the Commission will now provide €4.6 billion in funding. With a €3.4 billion budget, the Commission will launch two “calls for proposals […] to accelerate the deployment of innovative decarbonisation technologies in Europe, including electric vehicles batteries”. With a €1.2 billion budget, the Commission will launch a “second auction of the European Hydrogen Bank to accelerate the production of renewable hydrogen in the European Economic Area”. Those looking for funding for their batteries and net zero technologies have until 24 April 2025 to apply.
🌱 What is being funded?
Each of the calls come with “new resilience criteria”, which are – amongst others – aimed at “protect[ing] Europe against dependency on a single supplier”. The general call for net zero technologies has a €2.4 billion budget. It will fund “decarbonisation projects of different scale, as well as projects focusing on the manufacturing of components for renewable energy, energy storage, heat pumps and hydrogen production”. To receive funding, projects must have the “potential to reduce greenhouse gas emissions”, and they must demonstrate a “degree of innovation, project maturity, replicability, and cost efficiency”.
🌱 What funding is there for batteries?
There will be a €1 billion call specifically for electric vehicle battery cell manufacturing. This will fund “projects that can produce innovative electric vehicles battery cells or deploy innovative manufacturing techniques, processes and technologies”. Moreover, on 3 December 2024, the Commission and European Investment Bank (EIB) launched a new partnership focused on increasing investments into the battery manufacturing sector. Through the partnership, a €200 million top-up (loan guarantee) will be granted to the Innovation Fund’s InvestEU programme. This funding will be used to “support innovative projects along the European battery manufacturing value chain” and “to address financing challenges by enabling additional EIB venture debt operations over the next three years”.
Read more about the funding here:
- https://ec.europa.eu/commission/presscorner/detail/en/ip_24_6184