The European Commission has launched three new funding initiatives under the Innovation Fund, allocating a total of €5.2 billion from the EU Emissions Trading System (EU ETS) revenues. The new calls include €2.9 billion for net-zero technologies, €1.3 billion for hydrogen production through the European Hydrogen Bank, and €1 billion for decarbonising industrial process heat via the Industrial Decarbonisation Bank.
These measures are intended to help meet the EU’s climate and energy targets by 2030 and achieve climate neutrality by 2050. They also aim to advance clean transition efforts and support European industry competitiveness.
The general call for net-zero technologies (IF25 NZT call) will fund projects that demonstrate innovative methods to reduce greenhouse gas emissions. The budget of €2.9 billion will be available to projects of various sizes, including those focused on manufacturing components for renewable energy, energy storage, heat pumps, hydrogen production, and electric-vehicle batteries. Projects will be evaluated based on their emission reduction potential, innovation level, maturity, replicability, and cost efficiency. There is a dedicated bonus point for small- and medium-sized enterprises (SMEs) coordinating or implementing projects.
For hydrogen production, the third auction under the European Hydrogen Bank (IF25 Hydrogen Auction) offers €1.3 billion in support of renewable fuels of non-biological origin (RFNBO) hydrogen or electrolytic low-carbon hydrogen projects across three topics. This includes a new focus on producers supplying maritime or aviation sectors. Selected projects will receive fixed premium payments upon verified hydrogen production over up to ten years.
The first auction targeting decarbonisation of industrial process heat (IF25 Heat Auction) provides up to €1 billion to support electrified and direct-renewable heat production technologies such as heat pumps, electric boilers, resistance heating, induction heating, solar thermal or geothermal solutions, as well as hybrid approaches. These efforts address one of Europe’s largest sources of industrial emissions—process heat—and support is awarded based on cost-effective CO2 abatement over five years.
Member States can use the Innovation Fund’s evaluation system through an ‘Auctions-as-a-Service’ scheme to allocate national funds to eligible but unfunded projects due to budget limits. Germany has committed an additional €1.3 billion in national funds for RFNBO hydrogen projects; Spain will provide €465 million—€415 million for hydrogen initiatives and €50 million for industrial heat decarbonisation.
Applications for the IF25 NZT call are open until 23 April 2026 via the EU Funding & Tenders Portal; successful applicants are expected to sign grant agreements by early 2027. The IF25 Hydrogen Auction and IF25 Heat Auction accept bids until 19 February 2026 with grant agreements anticipated within nine months after closure.
According to the Commission: “Together, these opportunities mark a major step forward in achieving the EU’s climate and energy objectives by 2030 and climate neutrality by 2050. They will also significantly contribute to progress on the clean transition and deliver the Clean Industrial Deal, boosting the competitiveness and resilience of European industry.”
Background information shows that since its inception in 2020 through previous calls for proposals—including ongoing project preparations—the Innovation Fund has allocated more than €15.8 billion across over 275 projects using competitive auctions ranked by bid price per kilogram of hydrogen produced or per tonne of CO2 abated.
Project Development Assistance remains available from the European Investment Bank for technical or financial advisory needs; high-quality proposals may also receive a Strategic Technologies for Europe Platform Seal regardless of funding outcome to help attract further investment.