Innovation Fund: the complete guide to European funding for industrial decarbonisation, hydrogen and clean technologies

The Innovation Fund, the European Union's fund dedicated to innovation, is one of the European Union's main financial instruments for accelerating the development and deployment of low-carbon technologies.

Its objective is to support industrial investments that significantly reduce greenhouse gas emissions, while strengthening Europe's technological and industrial competitiveness.

Funded by revenues from the EU Emissions Trading System (EU ETS), the programme represents a potential envelope estimated at around €40 billion between 2020 and 2030, based on a carbon price of €75/tonne.

It is primarily aimed at companies carrying innovative industrial projects that present significant emission-reduction potential and are sufficiently advanced to be built and operated.

The sectors concerned notably include:

• iron and steel and metallurgy;
• cement and construction materials;
• chemicals and petrochemicals;
• renewable and low-carbon hydrogen;
• synthetic fuels;
• batteries and energy storage;
• renewable energy;
• carbon capture, use and storage;
• clean technologies and their manufacturing;
• maritime and air transport;
• electrified industrial processes;
• building decarbonisation technologies.

The Innovation Fund differs from conventional investment grants: it does not seek solely to finance industrial modernisation, but to accelerate the commercialisation of innovative technologies that might not necessarily have been deployed without European support.

It can finance projects worth several tens or hundreds of millions of euros, or even industrial investments exceeding one billion euros.

For Capital OS, this is therefore a particularly interesting programme to reference for industrial companies, clean-technology developers and large energy infrastructure projects.

1. Understanding the Innovation Fund 2020-2030

1.1. Funding sourced from the European carbon market

The Innovation Fund is funded by the auctioning of emission allowances under the EU Emissions Trading System.

The mechanism works as follows:

1. Companies covered by the EU ETS must cover their emissions with allowances.
2. A share of the allowances is auctioned.
3. The revenues from these auctions feed the European Innovation Fund.
4. The European Commission uses these resources to finance clean-technology projects.

The amount available therefore depends in particular on the carbon price and the number of allowances auctioned.

The estimate of around €40 billion between 2020 and 2030 is a projection based on a carbon-price assumption. It does not constitute a fixed, guaranteed envelope.

1.2. A programme managed directly by the European Commission

The Innovation Fund is a European programme under direct management.

The European Commission oversees its overall governance and relies in particular on two bodies:

CINEA — European Climate, Infrastructure and Environment Executive Agency

CINEA handles the operational management of the calls:

• publishing calls for projects;
• receiving applications;
• checking eligibility;
• evaluating projects;
• managing selection procedures;
• preparing grant agreements;
• monitoring funded projects.

European Investment Bank (EIB)

The EIB is involved in particular in supporting project development, through the Project Development Assistance (PDA) scheme.

This support aims to improve the technical, financial and commercial maturity of projects that show significant potential but still need further structuring work.

1.3. Around €13 billion already awarded

According to data published by CINEA, around €13 billion in European funding had already been awarded to Innovation Fund projects at the time its portfolio was presented.

The Commission also indicates that around 240 projects have been selected across the countries of the European Economic Area.

The Commission's performance statistics show, as of the end of 2025:

• €11.7 billion in grants committed;
• 197 projects under implementation or completed;
• €58 billion in investment mobilised;
• 962 million tonnes of CO₂ equivalent in planned emission reductions over the first ten years of project operation.

These figures show that the programme is an important lever for mobilising private and public capital, well beyond the European grant alone.

2. Which projects can benefit from the Innovation Fund?

The programme targets innovative technologies capable of making a significant contribution to European climate neutrality.

It covers several industrial categories.

2.1. Highly emitting industries

Energy-intensive industrial sectors are particularly concerned.

These notably include:

• cement;
• lime;
• steel;
• aluminium;
• non-ferrous metals;
• chemicals;
• refineries;
• glass;
• construction materials;
• highly emitting manufacturing industries.

Projects may cover:

• electrification of processes;
• replacement of fossil fuels;
• clinker reduction in cement;
• heat recovery;
• use of alternative raw materials;
• carbon capture and storage;
• development of low-carbon industrial processes.

The challenge is not simply to reduce the consumption of an existing plant. A substantial climate gain and a sufficiently strong technological or operational innovation must be demonstrated.

2.2. Renewable and low-carbon hydrogen

Hydrogen is one of the programme's strategic areas.

Projects may concern:

• electrolysers;
• renewable hydrogen production;
• electrolytic low-carbon hydrogen;
• integrated production infrastructure;
• storage systems;
• conversion technologies;
• industrial use of hydrogen;
• hydrogen-derived fuels.

Projects must comply with the European definitions and criteria applicable to renewable and low-carbon hydrogen.

An electrolysis facility does not therefore automatically become eligible: the source of the electricity, the carbon footprint and the production conditions are decisive.

2.3. Synthetic fuels and sustainable fuels

The Innovation Fund finances projects aiming to develop alternative fuels for sectors that are difficult to electrify.

Projects may concern:

• sustainable aviation fuels;
• synthetic fuels (e-fuels);
• low-carbon maritime fuels;
• molecules produced from renewable hydrogen;
• the use of captured CO₂ as a feedstock;
• integrated production facilities.

These technologies can help decarbonise aviation, maritime transport and certain industrial activities.

2.4. Batteries and energy storage

Projects for manufacturing battery components and storage are also covered.

Supported technologies may notably include:

• battery cells;
• active materials;
• battery components;
• innovative manufacturing processes;
• battery recycling;
• stationary storage systems;
• storage technologies that enable greater integration of renewable energy.

The programme can support production plants or industrial demonstrators where their technology and climate contribution meet the call's criteria.

2.5. Renewable energy and clean technologies

The Innovation Fund can also support projects concerning:

• solar energy;
• wind energy;
• storage technologies;
• renewable energy production equipment;
• energy recovery technologies;
• energy conversion systems;
• components needed for the energy transition.

A distinction must be made between clean-technology manufacturing projects and conventional renewable electricity production projects.

The fund targets innovative projects with climate and industrial added value.

2.6. Carbon capture, use and storage (CCUS)

CCUS is an important category of the Innovation Fund.

Projects may cover:

• capturing CO₂ at industrial facilities;
• purifying CO₂;
• transport;
• geological storage;
• carbon reuse;
• integrated capture and storage chains;
• technologies that reduce emissions from hard-to-decarbonise industries.

Projects must demonstrate their climate performance across the entire value chain.

Simply capturing a quantity of CO₂ is not enough: the destination of the carbon, its potential storage permanence and the emissions associated with the process must all be verified.

3. The Innovation Fund's call categories

The programme uses two main families of instruments:

• conventional grant calls;
• competitive auctions.

Conventional calls are generally organised around the size and nature of the projects.

3.1. Large-scale projects

Large-scale projects concern industrial investments whose capital expenditure (CAPEX) generally exceeds €100 million in the general category.

They may in particular concern:

• large industrial facilities;
• hydrogen production units;
• synthetic-fuel plants;
• carbon capture and storage facilities;
• integrated decarbonisation projects;
• large clean-technology manufacturing units.

These projects require thorough preparation:

• technical studies;
• engineering;
• market studies;
• administrative authorisations;
• financing plan;
• supply contracts;
• commercial strategy;
• business model;
• construction schedule.

3.2. Medium-scale projects

Medium-scale projects generally concern investments whose CAPEX is between €20 and €100 million in calls that use this segmentation.

They may concern intermediate-sized industrial units, demonstrators or decarbonisation projects for existing facilities.

Project size alone is not enough to determine eligibility: the segmentation and thresholds of the relevant call must be examined.

3.3. Small-scale projects

Small-scale projects are intended for more limited industrial investments.

Past calls have notably used a category between €2.5 and €20 million of CAPEX.

They may concern:

• an industrial demonstrator;
• a recycling process;
• an innovative production unit;
• a heat-recovery project;
• a low-carbon manufacturing process;
• a storage technology;
• a facility for producing clean components.

These calls are of particular interest to industrial SMEs and technology companies developing a first commercial installation.

Note: thresholds and categories have evolved in recent calls. The documentation of the applicable call must always be used as the reference.

3.4. Pilot projects

Pilot projects aim to demonstrate particularly innovative technologies with significant emission-reduction potential.

They may concern:

• breakthrough industrial processes;
• storage technologies;
• innovative energy-production solutions;
• carbon-capture technologies;
• low-carbon transport technologies;
• clean manufacturing processes.

Pilot projects are not necessarily very small: above all, they must show a demonstrator character and significant innovation.

4. The IF26 calls planned for December 2026

The programme's current developments are particularly important for companies preparing a project for 2027.

As of 30 October 2026, no Innovation Fund call is open. However, the Commission announces five new calls planned for December 2026.

These include:

1. IF26 Net-Zero Technologies;
2. IF26 SME Call;
3. IF26 Maritime Call;
4. IF26 Heat Auction;
5. IF26 Hydrogen Auction.

4.1. IF26 Net-Zero Technologies

This call is the programme's main general scheme for supporting clean technologies and decarbonisation.

It comprises four categories:

Category	Indicative CAPEX
General decarbonisation — large projects	More than €100M
General decarbonisation — small and medium projects	€2.5 to €100M
Manufacturing of clean technologies and critical raw materials	More than €2.5M
Pilot projects	More than €2.5M

Clean-technology manufacturing notably concerns components intended for:

• renewable energy;
• energy storage;
• heat pumps;
• hydrogen production.

The call also includes a component dedicated to critical raw materials, in line with the European objectives of securing supply chains.

Announced schedule: opening planned for December 2026 and closing planned for April 2027.

4.2. IF26 SME Call

The Commission announces two new calls specifically aimed at SMEs.

This development is particularly interesting for companies developing low-carbon technologies without the financial resources of a large industrial project.

The aim is to make the programme more accessible to smaller-scale projects.

The detailed arrangements, thresholds, sectors and budgets must be checked in the final documents published when the call opens.

Simply being an SME does not guarantee eligibility: the project must still meet the fund's emission-reduction and innovation objectives.

4.3. IF26 Maritime Call

The new maritime call aims to accelerate the deployment of innovative technologies to decarbonise maritime transport.

It targets projects with a CAPEX of at least €2.5 million.

The areas concerned include:

• energy-efficiency technologies;
• sustainable alternative fuels;
• electrification;
• zero-emission propulsion systems;
• wind-assisted propulsion technologies;
• innovative port infrastructure.

The evaluation criteria are based on:

• the degree of innovation;
• avoided emissions;
• project maturity;
• replicability;
• cost-effectiveness.

Opening is planned for December 2026, with closing announced for April 2027.

4.4. IF26 Hydrogen Auction

This auction is part of the European Hydrogen Bank framework.

The announced provisional budget is €500 million.

Two categories are planned:

Component	Indicative budget
Production of renewable RFNBO hydrogen	€350M
Renewable hydrogen and/or low-carbon electrolytic hydrogen	€150M

The auction aims to support hydrogen production that complies with European definitions.

The provisional schedule plans an opening in December 2026 and a closing in February 2027.

The mechanism is based on a competitive logic: candidates propose a level of financial support and are evaluated according to the auction rules.

This scheme is different from a conventional grant awarded after scoring a project file.

4.5. IF26 Heat Auction

The Commission also announces an auction dedicated to industrial heat.

The aim is to accelerate the deployment of low-carbon heat solutions and contribute to the decarbonisation of industrial thermal uses.

The final arrangements and detailed schedule must be checked in the call's conditions.

Industrial companies wishing to electrify their thermal processes, develop clean heat solutions or transform their facilities should follow this scheme closely.

5. Competitive auctions: how does the funding work?

Innovation Fund auctions are based on a logic different from conventional calls.

The Commission sets a volume or support envelope, then companies submit bids according to the auction rules.

Projects are evaluated against qualification criteria and ranked by price or the level of support requested, depending on the mechanism concerned.

5.1. Hydrogen auctions

The European Hydrogen Bank auctions aim to support the production of renewable or low-carbon hydrogen.

Producers submit a support price requested per kilogram of hydrogen produced, according to the call's conditions.

The mechanism is designed to reduce the cost gap between renewable hydrogen and fossil alternatives.

Payments are linked to actual production and the contractual conditions.

5.2. Auction-as-a-Service

The Auction-as-a-Service (AaaS) mechanism allows a Member State to mobilise additional national resources to fund projects that took part in a European auction without being selected within the initial European envelope.

The country can thus fund additional projects on its territory, relying on the European evaluation procedure.

This mechanism may be of interest to French companies, as it allows European resources to be supplemented with national budgets.

However, it does not constitute an automatic right to funding: the Member State's participation and the availability of its funds must be confirmed.

6. Who can benefit from the Innovation Fund?

The fund is open to project promoters established in eligible countries: European Union Member States, Iceland, Liechtenstein and Norway.

6.1. Industrial companies

Industrial companies are the most directly concerned beneficiaries.

They can carry projects for:

• decarbonising industrial sites;
• modernising processes;
• electrification;
• carbon capture;
• hydrogen production;
• manufacturing clean technologies;
• producing sustainable fuels;
• energy storage.

The project must be sufficiently advanced to demonstrate its technical, financial and legal feasibility.

6.2. Technology SMEs

SMEs may be particularly interested in the small-scale calls, pilot projects and the new SME-specific calls.

They can notably develop:

• recycling technologies;
• low-carbon industrial equipment;
• storage solutions;
• clean production processes;
• energy-recovery technologies;
• industrial decarbonisation solutions.

Company size is not the only criterion: project maturity, CAPEX, emission reduction and the call's rules are decisive.

6.3. Mid-caps and large companies

Mid-caps and large groups can carry large-scale industrial projects.

They can notably present projects for the deep transformation of their industrial sites, hydrogen production, synthetic fuels or low-carbon materials.

6.4. Consortia and industrial partners

A project can bring together several companies, technology suppliers, energy operators and financial partners.

A consortium can be relevant when the necessary skills are spread across several players.

However, there is no general requirement for a consortium in every call.

6.5. Public and scientific bodies

Public and research bodies can take part in projects, notably as partners.

The Innovation Fund nonetheless remains an instrument geared towards pre-commercial or commercial projects, rather than academic research.

7. What level of grant can be obtained?

For conventional calls, the support rate can reach 60% of relevant costs.

This is not necessarily 60% of the project's entire accounting budget.

Relevant costs are calculated according to a methodology specific to the fund and the call, which may take into account:

• capital expenditure;
• operating costs;
• expected revenues;
• reference costs;
• emission savings;
• the project's economic lifetime.

Auctions can fund up to 100% of relevant costs depending on their mechanism's terms, but they do not work like a conventional grant.

7.1. Example of an industrial project

A company wants to build a facility for recycling critical raw materials.

The project represents a total investment of €80 million.

The relevant costs under the European methodology are estimated at €50 million.

With a maximum rate of 60%, the potential support would be:

€50M × 60% = €30M.

The company must therefore finance the remainder of the project through its own resources, bank financing, investors and possibly other compatible public schemes.

This calculation is illustrative. The final amount depends on the evaluation and methodology of the call.

7.2. Payments linked to project milestones

Grants may be paid progressively according to financial needs and the stages set out in the agreement.

For conventional grants, up to 40% of the grant amount can be paid based on predefined milestones before the project becomes fully operational.

Payment of the balance is linked to fulfilment of contractual obligations and expected performance.

For auctions, payments are organised during the operational period, according to the mechanism's conditions.

8. The Innovation Fund's selection criteria

The Innovation Fund evaluates projects against five fundamental criteria.

8.1. Greenhouse gas emission reduction

The project must demonstrate real potential for emission reduction.

The following must be established:

• baseline emissions;
• project emissions;
• avoided emissions;
• the assumptions used;
• the calculation scope;
• the reference period;
• any indirect effects.

The Commission uses specific calculation methodologies.

A project that does not clearly demonstrate its climate benefit risks not being competitive.

8.2. Technological innovation

The project must show a significant level of innovation compared with available solutions.

This may involve:

• a new technology;
• an improved process;
• a new combination of technologies;
• an innovative industrial method;
• a solution enabling a major reduction in emissions.

The innovative nature must be demonstrated with regard to the state of the art.

8.3. Project maturity

Maturity is an essential criterion.

The project must be sufficiently advanced in terms of:

• engineering;
• business model;
• financing;
• legal structure;
• authorisations;
• supply arrangements;
• contracts;
• industrial schedule.

A project that has not yet identified its site, its business model or its key partners may be too immature to be selected.

8.4. Replicability

The Commission wants to fund solutions that can be replicated.

The project must demonstrate that it can be deployed at other sites, in other territories or by other companies.

The ability to spread the technology and contribute to decarbonising an entire sector strengthens the application's appeal.

8.5. Cost-effectiveness

The funding must produce a climate impact proportionate to the support requested.

The Commission examines in particular the quantity of emissions avoided relative to the funding requested and the relevant costs.

Projects must therefore present a robust economic and environmental case.

9. Which expenses are taken into account?

The Innovation Fund uses a specific methodology for relevant costs.

A distinction must be made between overall capital expenditure and the costs that can actually be included in the grant calculation.

The categories may notably include:

9.1. Capital expenditure

• production equipment;
• industrial facilities;
• treatment systems;
• carbon-capture equipment;
• electrolysers;
• storage facilities;
• fuel production units;
• clean-technology manufacturing equipment.

9.2. Operating costs

Depending on the call's methodology, certain operating costs can be included in the calculation of relevant costs.

They may concern:

• energy consumption;
• inputs;
• raw materials;
• operating costs;
• maintenance costs;
• additional costs associated with the low-carbon technology.

9.3. Revenues and reference costs

The calculation does not simply consist of applying a rate to every invoice.

It takes into account the differences between the innovative project and a reference scenario.

Revenues generated by the project and any savings are also factored into the methodology.

This approach aims to measure the actual financial support needed to make the project viable.

10. Project Development Assistance: preparing a project before applying

Project Development Assistance (PDA) is a support scheme particularly useful for companies whose project is promising but not yet sufficiently mature.

It is offered by the European Investment Bank.

10.1. What is the aim of the PDA?

The aim is to advance the project on technical, financial and commercial dimensions.

The support can cover:

• feasibility studies;
• the business model;
• financial analysis;
• engineering;
• supply strategies;
• legal structuring;
• contracts;
• financing strategy;
• industrial implementation conditions.

The PDA is not an investment grant paid to the company. It is personalised technical and financial support, provided free of charge to selected promoters.

10.2. Who can benefit from the PDA?

Projects must notably:

• be located in the European Union, Iceland, Liechtenstein or Norway;
• present a technological innovation;
• have significant emission-reduction potential;
• be replicable and scalable;
• show reasonable prospects of profitability within the four years following grant preparation.

The scheme particularly targets small-scale projects, projects from under-represented sectors and projects with significant potential for improving their maturity.

10.3. How to apply for the PDA?

Two routes are possible:

1. Apply directly to the EIB.
2. Request to be considered for the PDA when applying to an Innovation Fund call, where the call allows it.

The support can last around three to nine months depending on the project's needs.

It is particularly useful for companies that need to strengthen their business plan, technical studies or financing strategy before submitting a new application.

11. Can the Innovation Fund be combined with other grants?

Yes. The Innovation Fund can be combined with other public or private funding, subject to the rules on combining funding and the absence of double funding.

The fund has a particular feature: the Innovation Fund grant is not itself considered State aid.

This does not mean that all other public grants can be combined without limit. Complementary grants remain subject to the applicable European rules.

Possible complementary funding notably includes:

Programme or instrument	Complementary role
Horizon Europe	Research and technological development
FEDER	Investment and regional development
InvestEU	Loans, guarantees and mobilisation of capital
Modernisation Fund	Energy modernisation in eligible States
Just Transition Fund	Economic transformation of the territories concerned
Connecting Europe Facility	Energy and transport infrastructure
IPCEI	Strategic European projects in certain value chains
Private capital	Equity and project financing

11.1. Innovation Fund and Horizon Europe

Horizon Europe can finance the research and development of a technology.

The Innovation Fund can then step in once the project reaches a sufficient level of maturity to be demonstrated or deployed industrially.

The two programmes can therefore fit into the same innovation trajectory, subject to the rules on combining funding.

11.2. Innovation Fund and FEDER

FEDER can help fund certain productive investments or infrastructure under a regional programme.

The Innovation Fund targets decarbonisation projects with significant innovation and climate impact.

The expenses funded by each programme must be precisely identified and the rules on combining funding checked.

11.3. Innovation Fund and InvestEU

InvestEU can facilitate the financing of the part of the project not covered by the grant.

It can intervene through guarantees and financing implemented by financial intermediaries or European partners.

This combination is particularly interesting for industrial projects requiring high levels of investment.

12. Selected French projects: concrete examples

France has become one of the best-represented countries in the Innovation Fund.

On 28 October 2026, the French ministry responsible for the ecological transition announced the results of the latest call: 16 French projects selected, representing more than €750 million in grants to be formalised into agreements.

The 77 projects selected at European level represent €3.4 billion in potential support.

The amounts announced for French projects correspond to the grants requested by the winners and form the basis for preparing agreements with the Commission. They should not be presented as amounts already fully paid out.

12.1. GravitHy — A low-carbon iron plant in Fos-sur-Mer

The company GravitHy plans to develop a low-carbon hot-briquetted iron production plant.

The project targets a production capacity of 2 million tonnes per year.

It relies on the use of low-carbon hydrogen to decarbonise an important step in the steel production chain.

The project is particularly strategic for the decarbonisation of European steelmaking.

12.2. Ageli — Direct lithium extraction in Alsace

The Ageli project, carried by Eramet, aims to develop an industrial facility for direct lithium extraction from geothermal resources.

The planned capacity could reach 15,000 tonnes per year of battery-grade lithium carbonate.

The project helps secure the European supply of materials needed for batteries.

12.3. SOLAR4EU — Production of photovoltaic cells and modules

The project carried by Holosolis in Hambach, Moselle, plans to develop an industrial capacity of 5 GW of photovoltaic cells and modules.

The aim is to strengthen Europe's production capacity for solar equipment.

12.4. H4 Marseille Fos — Synthetic fuels for aviation

The project plans an integrated platform for producing synthetic fuels for aviation.

The announced capacity could reach 75,000 tonnes per year.

The project relies notably on the use of low-carbon hydrogen and captured CO₂.

12.5. L'Ardoise — Sustainable fuels

The L'Ardoise project, in the Gard department, is also among the selected French projects.

It contributes to the development of sustainable fuels for the aviation and transport sectors.

12.6. BELair — Low-carbon fuels in Normandy

The BELair project, located in Normandy, is among the French projects selected in the 2026 round.

It illustrates the development of new production capacity for sustainable fuels.

12.7. BESS-4-C — Battery storage

The project carried by EDF Renouvelables aims to develop an innovative battery storage solution.

The aim is to strengthen the flexibility of the electricity system and facilitate the integration of renewable energy.

12.8. STEAMBOX and TISSUE — Electrification of industrial heat

These projects illustrate the possibilities for decarbonising industrial heat.

They aim to develop solutions that replace fossil fuels in thermal processes.

12.9. French projects selected in 2025

The previous selection round also recognised several French projects.

Among them:

• AirvaultGoCO₂, carried by Heidelberg Materials;
• EeStart, carried by Verso Energy;
• DEZiR, carried by Verso Energy;
• VAIA, carried by Vicat;
• GREENFIELD BIOGAZ, carried by Greenfield Biogaz;
• W2BIOFUEL, carried by Idex Infra;
• ENGINEUS PULL, carried by Safran Electrical & Power;
• LEYMEL, carried by Tenergie;
• LCSCM, carried by Neocem Holding;
• WATTRAXIS, carried by Soleil Elements 26;
• Fos3F, carried by Ideol;
• REC2pCAM, carried by Orano;
• TakeKair, carried by Hynamics;
• DEMONSTR8, carried by Mecaware.

These projects illustrate the diversity of the technologies supported: low-carbon cement, sustainable fuels, batteries, recycling, floating photovoltaics, electrification and hydrogen.

13. Innovation Fund: how to identify an eligible company?

For Capital OS, the Innovation Fund must be treated as an industrial-project funding programme, not as a general grant awarded based on NAF code alone.

Matching must take several dimensions into account.

13.1. Sector of activity

The most relevant sectors include:

• iron and steel;
• metallurgy;
• cement;
• chemicals;
• refining;
• energy;
• batteries;
• hydrogen;
• recycling;
• alternative fuels;
• clean-technology manufacturing;
• maritime transport;
• aviation.

13.2. Type of project

The most important signals are:

• construction of a new industrial unit;
• creation of a demonstrator;
• deep transformation of a process;
• industrial electrification;
• CO₂ capture;
• hydrogen production;
• manufacturing of clean components;
• recycling of critical materials;
• energy storage;
• production of synthetic fuels.

13.3. Industrial maturity

Companies should be sought that have:

• an identified site;
• feasibility studies;
• a sufficiently advanced technology;
• a business plan;
• a business model;
• an industrial schedule;
• a supply strategy;
• a financing plan.

13.4. Financial capacity

The company must be able to finance the part of the project not covered by the Innovation Fund.

It is particularly important to examine:

• equity;
• borrowing capacity;
• investors;
• bank financing;
• complementary public funding;
• commercial contracts.

A project with strong technological potential but no credible funding solution may be deemed insufficiently mature.

13.5. Carbon indicators

The matching engine must also identify companies able to demonstrate:

• baseline emissions;
• avoided emissions;
• CO₂ savings;
• reduction in carbon intensity;
• operating lifetime;
• replication capacity.

This information is decisive for the evaluation.

14. How to submit an Innovation Fund application?

Applications are submitted via the European Funding & Tenders portal.

Step 1 — Identify the call

The scheme matching the project must be selected:

• Net-Zero Technologies;
• SME Call;
• Maritime Call;
• hydrogen auction;
• industrial heat auction.

Step 2 — Check the investment threshold

CAPEX thresholds can vary considerably.

It must be checked that the project meets the targeted category and that the capital expenditure is correctly calculated.

Step 3 — Calculate avoided emissions

The promoter must build a robust carbon assessment, in line with the call's methodology.

Step 4 — Demonstrate project maturity

Technical, financial, legal and commercial studies must be gathered.

Authorisations, contracts and partner commitments can be decisive.

Step 5 — Build the financing plan

The application must present the need for European support and the complementary resources available.

It must be demonstrated that the project could not be carried out under the same conditions without the funding requested.

Step 6 — Submit the proposal

The application must be submitted before the deadline, following the required forms and documents.

Step 7 — Prepare the agreement

If selected, the promoter must finalise the grant agreement with the European Commission.

Selection does not mean that all funds are paid out immediately: the project remains subject to contractual obligations and delivery milestones.

FAQ — Innovation Fund

What is the budget of the Innovation Fund?

The programme has a potential envelope estimated at around €40 billion between 2020 and 2030, based on a carbon price of €75/tonne.

Can an SME benefit from the Innovation Fund?

Yes. SMEs can apply to calls suited to their size and project. New SME-specific calls are announced for December 2026.

What is the maximum grant rate?

Conventional calls can fund up to 60% of relevant costs. Competitive auctions can reach 100% of relevant costs depending on the mechanism's conditions.

Does the Innovation Fund finance the purchase of machinery?

It can finance equipment needed for an innovative, low-carbon industrial project. It is not a general grant for modernising a plant.

Do you have to be an industrial company?

Industrial companies are the most directly concerned beneficiaries, but technology developers, energy operators and other promoters may also be eligible depending on the call.

Can a hydrogen plant be funded?

Yes. Renewable and low-carbon hydrogen production is one of the programme's strategic areas, notably through the European Hydrogen Bank auctions.

Does the fund finance batteries?

Yes. The manufacturing of cells and components, storage technologies and certain recycling processes can be covered.

Can a cement decarbonisation project be funded?

Yes. Cement and lime are among the highly emitting industrial sectors targeted by the programme.

Does the fund finance CO₂ capture?

Yes. Carbon capture, use and storage projects are eligible when they meet the call's criteria.

Can the Innovation Fund and FEDER be combined?

Yes, subject to complying with the rules on combining funding and not financing the same expenses twice.

What is the difference between the Innovation Fund and LIFE?

LIFE finances broader environmental and climate projects, with a demonstration and replication logic.

The Innovation Fund targets industrial low-carbon technologies, with particular attention to their emission-reduction potential and commercial deployment.

What is Project Development Assistance?

The PDA is free technical and financial support offered by the EIB to selected projects. It helps improve their maturity and their chances of obtaining funding.

Which calls are open as of 30 October 2026?

No Innovation Fund call is open on that date. Five new calls are planned for December 2026.

Is France well positioned in the programme?

Yes. The French ministry announced on 28 October 2026 that France was at the top of the European ranking in the latest selection, with 16 projects and more than €750 million in grants to be formalised into agreements.

Conclusion

The Innovation Fund is one of Europe's most powerful instruments for supporting industrial transformation and the deployment of low-carbon technologies.

It stands out through its level of ambition, the size of the projects funded and the importance given to emission reductions, industrial maturity and the replication of technologies.

The companies most likely to benefit are those developing structuring industrial projects in the energy, hydrogen, battery, materials, chemicals, metallurgy, sustainable-fuel and carbon-capture sectors.

France has just confirmed its position with 16 projects selected in the latest round announced in October 2026.

For companies, the next strategic milestone is the publication of the five IF26 calls planned for December 2026. Preparation of studies, the carbon assessment, the financing plan and partnerships should begin before they open.

Last updated: 30 October 2026.