EU Funds 85 Projects to Accelerate Climate Neutrality with €4.8 Billion Investment

The European Commission announced today that it has selected 85 decarbonization technology-focused projects to receive €4.8 billion in grants utilizing funds raised through its EU Emissions Trading System (EU ETS).

Established in 2005, the European Emissions Trading System puts a price on carbon emissions for key greenhouse gas (GHG) intensive sectors, including electricity and heat generation, oil refineries, steel, cement, paper, chemicals, and commercial aviation, among others. In 2023, EU lawmakers agreed to expand the EU ETS’ scope, increasing the direct emissions reductions required by covered sectors and incorporating new industries. The EU ETS is now expected to generate revenues of approximately €40 billion from 2020 to 2030.

Funded by the EU ETS, the Innovation Fund is one of the world’s largest funding programs for the deployment of net zero technologies, and one of the key tools behind the European Green Deal Industrial Plan. The plan aims to enhance the competitiveness of Europe’s net zero industries and support the EU’s transition to climate neutrality by creating financial incentives for companies and public authorities to invest in advanced net zero and low-carbon technologies.

This announcement marks the fourth, and largest, wave of grants by the Innovation Fund, bringing total awards to date to €12 billion. The current round is the first to include projects of different scales, ranging from large and medium to small and pilot projects, and includes a focus on cleantech manufacturing. Supported projects will develop, build, and operate manufacturing plants for key components in wind and solar energy, heat pumps, and components for electrolysers, fuel cells, energy storage technologies, and the battery value chain.

Additional categories covered by the grants include projects aimed at supporting technologies to cut net greenhouse gas emissions in energy-intensive industries; industrial carbon management, with selected projects anticipated to contribute 13% of the Net-Zero Industry Act target of storing at least 50 million tonnes of CO2 from hard-to-abate industries; renewable hydrogen, with selected projects expected to deliver 61 kilotonnes of renewable fuel of non-biological origin (RFNBO) annually; and net zero mobility, focused on cutting emissions in the mobility sector, particularly the maritime sector.

The European Commission said it will issue the next call for proposals for the Innovation Fund in December 2024.

Wopke Hoekstra, Commissioner for Climate Action and responsible for transport, said: “The Innovation Fund is funding more projects than ever before. Eighty-five innovative projects in 18 countries bring cutting-edge clean technologies at the service of climate action. New projects in the maritime, aviation, and road transport sectors will boost efforts to reach clean mobility. The Fund is once again demonstrating how the EU ETS is a great tool in reducing emissions and funding the projects we need to build a climate-neutral and competitive Europe.”