About the European Commission's Innovation Fund

Jul 07, 2020

 

What is the Innovation Fund?

The Innovation Fund is a funding programme provided by the EU to finance breakthrough technologies. It one of the world’s largest funding programmes of its kind.

It aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies, and give EU companies a first-mover advantage to become global technology leaders.

The Fund focuses on:

  • energy intensive-industries;
  • carbon capture, use and storage;
  • renewables; and
  • energy storage 

How is the fund financed?

The Fund is financed by revenues from two areas:

  • the auction of emission allowances from the EU's Emissions Trading System
  • unspent revenues from the NER 300 programme, the predecessor to the Innovation Fund. 

How much will be available? 

Depending on the carbon price, the Innovation Fund may amount to €10 billion between 2020–2030. 

What projects are eligible?

The fund aims to finance a varied project pipeline to achieve an optimal balance of a wide range of innovative technologies in all eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) and Member States. Projects need to be sufficiently mature in terms of planning, business model and financial and legal structure, but the Fund is also open to small-scale projects with total capital costs under €7.5 million which can benefit from simplified application and selection procedures.
The Fund will also support cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example through industrial symbiosis.

Can Innovation Fund grants can be combined with other funding?

Innovation Fund grants can be combined with funding from other support programmes, including:  

The Innovation Fund grant is not considered to be State aid. To cover the remaining costs, a project applicant can combine the Innovation Fund grant with public support by a Member State. The amount of public support for a project will depend on the cumulation thresholds of the applicable State aid rules.

Why is the Innovation Fund important? 

The Innovative Fund will provide a boost to the green recovery by creating local future-proof jobs, paving the way to climate neutrality and reinforcing European technological leadership on a global scale.

According to Executive Vice-President Frans Timmermans: “these large-scale investments will help restart the EU economy and create a green recovery that leads us to climate neutrality in 2050.”

The Innovation Fund is a key funding instruments for delivering the EU’s economy-wide commitments under the Paris Agreement and its objective to be climate neutral Europe by 2050, as recognised also in the European Green Deal Investment Plan.

How will the Innovation Fund help projects? 

The Innovation Fund will improve the risk-sharing for projects by giving more funding in a more flexible way, through a simpler selection process.  This support will help new technologies to reach the market.

The first call will provide grant funding of €1 billion to large-scale projects for clean technologies to help them overcome the risks linked to commercialisation and large-scale demonstration. 

For promising projects which are not yet ready for market, a separate budget of €8 million is set aside for project development assistance.

How is the fund implemented?

The Innovation Fund will be implemented by the Executive Agency for Networks and Innovation (INEA), which will report regularly to the Commission and provide feedback on general orientations for further development of the Innovation Fund.

The European Investment Bank will provide project development assistance to promising projects that are not ready for full application. The EIB will report regularly to the Commission.

Member States also actively participate in the implementation of the Innovation Fund, and  are consulted on key decisions, including decisions to launch the call for proposals, maximum amount of the Innovation Fund support to be made available for the PDA, list of pre-selected projects for PDA support, and lists of pre-selected projects for the Innovation Fund grants, prior to the award of grants.

How do projects apply?

Projects can apply via the EU Funding and Tenders portal.

For small-scale projects, the application process will have only one stage.

For large-scale projects there are two stages of application:

  1. Expression of interest
    Projects are initially assessed on their effectiveness, innovation and maturity level. 
    (Where projects meet only the first two criteria, they may qualify for project development assistance.)
  2. Full application
    Projects are assessed on all the criteria, including scalability and cost efficiency.

How are projects selected? 

Projects will be selected based on:

  • Effectiveness of greenhouse gas emissions avoidance
  • Degree of innovation
  • Project maturity
  • Scalability
  • Cost efficiency

The detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectorial balance, are set in each call for proposals. For small-scale projects, the selection criteria can be simplified.

Who/what can avail of the Innovation Fund?

Projects in eligible sectors from all EU Member States, Iceland and Norway. 

The funds can be used in cooperation with other public funding initiatives, such as State aid or other EU funding programmes. 

What is the timeline?

The first call for proposals for large-scale projects is open until 29 October 2020. 

There will be regular calls for proposals in the lifetime of the Innovation Fund.


Watch this short video for a quick introduction.