BRUSSELS, Belgium / EuroWire.IO / – The Innovation Fund has allocated €3.4 billion to support 77 renewable and sustainable technology projects across Europe. This announcement from the European Commission was made on Monday, October 19, during the call for net-zero technologies funded by the initiative. The financing comes from earnings generated through the EU Emissions Trading System. These projects span 23 countries within the European Economic Area and include everything from large industrial facilities to smaller experimental pilots.
The European Commission estimates that, during their first ten years of operation, these initiatives could cut approximately 290 million tonnes of carbon dioxide equivalent emissions. This roughly translates to about one tonne of reduction every second for a decade. The investments are expected to bolster Europe’s industrial competitiveness in the field of clean technology and to reinforce the bloc’s goals of energy independence and security. All these efforts contribute to the EU’s overarching objective of achieving climate neutrality by 2050.
Wopke Hoekstra, the Commissioner for Climate, Net Zero and Clean Growth, highlighted that European innovators are transforming climate commitments into industrial leadership. He emphasized that reinvesting revenues from emissions trading into clean technology aids companies in entering markets and reducing their emissions. Competition for the available funding was fierce, with the call launched in December 2025 attracting 358 applications requesting a total of €17.5 billion, against a budget of €2.9 billion. Every one of the five thematic areas of the call received more applications than available funds.
Nuclear energy and direct air capture projects included in the new portfolio
Among the selected initiatives, the Innovation Fund’s first small modular reactor project is featured, reflecting the EU’s growing interest in nuclear power. Additionally, this is the first direct air carbon capture and storage project to receive financial backing. Six projects focus on the processing and recycling of critical raw materials, including rare earth magnets and batteries. These efforts align with the Net-Zero Industry Act and the RESourceEU Action Plan.
Further projects address energy-intensive sectors, renewable energy, storage solutions, net-zero mobility, alternative advanced fuels, and industrial carbon management. Breakdown by category shows that 12 large-scale projects requested approximately €1.58 billion, while 12 manufacturing initiatives sought nearly €895 million. Seventeen medium-sized projects applied for about €458 million, and 20 smaller projects requested roughly €124 million. The remaining 16 pilot projects asked for around €394 million. The largest share of requested funds was allocated to the large-scale projects.
Additional recognition for non-funded projects through quality certification
In addition to the winners, 84 proposals met the evaluation criteria but could not be awarded grants due to budget constraints. These will receive the STEP Seal, aiding their pursuit of additional funding. Moreover, 160 other proposals are eligible to apply for project development assistance from the European Investment Bank. The current Innovation Fund portfolio now comprises approximately 320 projects with nearly €17 billion committed.
Project proposers are in the process of finalizing grant agreements with the European Climate, Infrastructure and Environment Executive Agency, with the official announcement expected in the first quarter of 2027. Future calls for the Innovation Fund are planned to open early December 2026, including a €1 billion allocation dedicated to clean-tech manufacturing. The fund is expected to leverage around €40 billion in carbon market revenues from 2020 to 2030. Independent experts evaluated each submission based on emission reduction potential, innovation level, technological maturity, and cost effectiveness.