New multi-billion-euro opportunities to accelerate Europe’s climate transition
The European Commission has opened three major funding calls under the Innovation Fund, backed by €5.2 billion in revenues from the EU Emissions Trading System (EU ETS).
These include:
- €2.9 billion for the 2025 Net-Zero Technologies call (IF25 NZT)
- €1.3 billion for the third EU Hydrogen Bank auction
- €1 billion for the first-ever Industrial Process Heat decarbonisation auction
Together, these instruments strengthen the EU’s ambition to meet its 2030 climate goals and achieve climate neutrality by 2050, while advancing the Clean Industrial Deal and reinforcing Europe’s industrial competitiveness.
Driving Europe’s clean industrial transformation
€2.9 billion for Net-Zero Technologies
The general call for net-zero technologies (IF25 NZT) aims to close investment gaps, mobilise private and public capital, and bolster Europe’s leadership in clean-tech manufacturing and deployment.
With €2.9 billion allocated, the call supports large- and small-scale projects showcasing mature, highly innovative technologies capable of reducing greenhouse gas (GHG) emissions.
Eligible sectors include:
- renewable energy equipment
- energy storage
- heat pumps
- hydrogen production
- electric-vehicle battery components
Projects will be assessed on GHG reduction potential, innovation, maturity, replicability, and cost efficiency.
A new bonus point is introduced to encourage SME-led projects, recognising their key role in Europe’s decarbonisation pathway.
Supporting industrial transformation through hydrogen
€1.3 billion for the European Hydrogen Bank auction
Hydrogen is becoming essential for replacing fossil fuels in heavy industry and transport. The third auction of the European Hydrogen Bank (IF25 Hydrogen Auction) allocates €1.3 billion to support the production of:
- RFNBO hydrogen
- electrolytic low-carbon hydrogen
The auction introduces a new topic for hydrogen producers supplying maritime or aviation off-takers.
Selected projects will receive a fixed premium for verified hydrogen production over up to 10 years, improving cost competitiveness and accelerating market uptake.
Tackling emissions by decarbonising industrial process heat
€1 billion for the first EU-wide industrial heat decarbonisation auction
Industrial process heat accounts for three-quarters of all industrial emissions. The new IF25 Heat Auction allocates €1 billion to support:
- electrified heat
- direct renewable heat (solar thermal, geothermal)
- heat pumps
- electric boilers
- induction and resistance heating
- hybrid systems combining multiple technologies
Support will take the form of a fixed output-based premium, linked to verified decarbonised heat production for up to five years.
This auction represents a major milestone in developing the Industrial Decarbonisation Bank, aiming to close the cost gap between fossil-based heat and clean alternatives.
Additional national contributions through Auctions-as-a-Service
EU Member States can enhance the Innovation Fund’s impact through the Auctions-as-a-Service mechanism, which streamlines evaluation and state-aid procedures.
Two countries confirmed participation:
- Germany: €1.3 billion in national funding for RFNBO hydrogen projects
- Spain: €465 million, including €415 million for hydrogen and €50 million for industrial heat decarbonisation
These contributions allow high-quality projects that meet evaluation criteria—but fall outside the EU budget limit—to still obtain financial support.
