BRUSSELS, Belgium / EuroWire.IO / – European Commission has allocated €3.4 billion in funding from the Innovation Fund to 77 projects focused on achieving net-zero emissions. The announcement detailing the winners of the fund’s call for net-zero technologies was made on October 19. Revenue generated by the EU Emissions Trading System financed this initiative. The projects selected are distributed across 23 countries within the European Economic Area and encompass a diverse array of clean industrial technologies.
The Commission predicts that these projects could prevent approximately 290 million tonnes of carbon dioxide equivalent emissions during their first decade of operation. This equates to about one tonne each second over ten years. The initiative aims to bolster Europe’s leadership and competitiveness in clean technology sectors, while also promoting energy independence and security. Contributing to the EU’s 2050 climate neutrality target, the funding supports long-term climate goals.
Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, highlighted that the projects exemplify European innovators transforming climate ambitions into industrial advancements. He emphasized that reinvesting revenues from the carbon market assists companies in bringing clean technologies to market readiness. The call, launched in December 2025, attracted 358 applications requesting a total of €17.5 billion, surpassing the available €2.9 billion budget. Every category within the call was oversubscribed. The Innovation Fund stands as one of the world’s largest programs dedicated to financing groundbreaking low-carbon innovations.
Major Projects in Scale and Manufacturing Dominate Funding Distribution
Twelve large-scale initiatives sought approximately €1.58 billion, representing the largest portion of the funding pool. An additional 12 projects in clean-tech manufacturing requested nearly €895 million. Seventeen medium-scale projects were selected, amounting to around €458 million, while twenty small-scale projects asked for about €124 million. Sixteen pilot projects aimed for roughly €394 million. These projects span energy-intensive industries, renewable energy, energy storage, and net-zero mobility, collectively covering all five categories of the call, resulting in the 77 chosen projects.
For the first time, the Innovation Fund will support a small modular nuclear reactor initiative and its inaugural direct air carbon capture and storage project. Six projects focus on processing and recycling critical raw materials, such as rare earth permanent magnets and batteries. Additional projects involve advanced alternative fuels and industrial carbon management strategies. The EU has previously backed clean industry projects through the same funding mechanism.
Grant Agreements Expected to Be Finalized in Early 2027
An additional 84 projects passed the evaluation phase but could not secure funding due to budget constraints. Both these projects and the 77 selected ones will receive the STEP Seal quality label, aiding them in attracting further financing. Furthermore, 160 proposals remain eligible for project development support from the European Investment Bank. Evaluations conducted by independent experts considered emissions reduction potential, innovation level, maturity, replicability, and cost efficiency. The seal is part of the Strategic Technologies for Europe Platform.
Currently, the selected project promoters are preparing grant agreements with the European Climate, Infrastructure and Environment Executive Agency. The Commission anticipates announcing the outcome of this process in the first quarter of 2027. Upcoming calls for the Innovation Fund are scheduled to open in early December 2026, including a €1 billion clean-tech manufacturing topic. The fund also manages hydrogen and industrial heat auctions. Its portfolio now encompasses approximately 320 projects with nearly €17 billion committed.