EC invests €1bn in innovative clean tech projects

The European Commission (EC) has launched the first call for proposals under its Innovation Fund, reportedly one of the world's largest programmes for the demonstration of innovative low carbon technologies. The fund will finance breakthrough technologies for renewable energy, energy-intensive industries, energy storage and carbon capture, use and storage (CCUS). 

Executive Vice-President Frans Timmermans says: ‘This call for proposals comes at just the right time. The EU will invest €1bn in promising, market-ready projects such as clean hydrogen or other low carbon solutions for energy-intensive industries like steel, cement and chemicals. We will also support energy storage, grid solutions, and carbon capture and storage. These large-scale investments will help restart the EU economy and create a green recovery that leads us to climate neutrality in 2050.’

For the period 2020–2030, the Innovation Fund will allocate around €10bn from the auctioning of allowances under the EU Emissions Trading System, in addition to undisbursed revenues from the Innovation Fund's predecessor, the NER 300 programme.

The first call will provide grant funding of €1bn to large-scale projects for clean technologies to help them overcome the risks linked to commercialisation and large-scale demonstration. This support will help new technologies to reach the market. For promising projects which are not yet ready for market, a separate budget of €8mn is set aside for project development assistance.

The call is open for 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. Projects will be evaluated according to their potential to avoid greenhouse gas (GHG) emission, innovation potential, financial and technical maturity, and potential for scaling up and cost efficiency.

The deadline for submission of applications is 29 October 2020. Projects can apply via the EU Funding and Tenders portal where more details on the overall procedure are available.

Commenting on the news, Adam Eskdale, Associate at law firm Ashurst, says: ‘The fund demonstrates that the EU is keenly aware that a lack of government backing, as well as financing, would be a key barrier for many potential market players looking to contribute to the energy transition. It also indicates that the EU sees real value in the strategy of investing in green technologies now using money gathered through emissions trading, with a view to benefiting from a net gain in the future, once these technologies have a more prevalent role in the energy system.’