A complementary alternative to the Innovation Fund to finance industrial pilots

Good news for industrial players seeking funding for pilot projects and aiming to bridge the ‘valley of death’ before market entry. Projects with a very advanced level of maturity, but still needing to fine-tune processes, optimise technologies or validate solutions ahead of commercial deployment, now have access to a new funding pathway. Until now, the main — and perhaps only — opportunity available to them was the Innovation Fund programme dedicated to the deployment of industrial pilots. That landscape is now broadening with the launch of the call linked to the Clean Industrial Deal under Horizon Europe. Its budget amounts to €275 million in 2026 and €265 million in 2027, with the expectation of supporting around 32 industrial pilots through grants ranging from €15 million to €25 million per project. The deadline for proposal submission is 15th September.

Does my technology fit this call?

The call covers six technological areas for industrial pilots, grouped into two main pillars.

Decarbonisation of energy-intensive industries

Carbon cycle management (CCU and/or CCUS): optimisation and demonstration of solutions for the capture, utilisation or storage of CO₂ and/or CO from energy-intensive industrial installations. A significant reduction in energy consumption per tonne captured is required — with a target of 30% compared to current technologies — alongside clear commercial potential for decarbonised products, assessed through life-cycle analysis (LCA), market size and cost considerations.

Use of clean energy in production: electrification of processes, decarbonised production, integration of alternative energy carriers (such as hydrogen) and new technologies, on-site renewable storage and recovery or upgrading of waste heat. The aim is to achieve substantial improvements in the use of clean energy in energy-intensive industry by 2035.

Circularity and resource efficiency (materials, energy and water): a 30% improvement by 2035 compared to current industrial benchmarks through commercially viable technological solutions. The objective is to significantly reduce the consumption of raw materials, energy and water, as well as ecosystem impacts and emissions, through circular value chains that convert industrial by-products and end-of-life waste into new raw materials for which low-carbon technologies do not yet exist. Solutions must demonstrate a positive LCA balance and be viable within the regulatory framework expected at project completion.

Clean technologies for climate action

Integrated net-zero energy systems: development and integration of networks, infrastructures and energy systems capable of operating under a climate-neutrality approach.

Advanced zero-emission generation technologies: support for electricity, heat and renewable energy technologies that enable progress towards fully decarbonised energy systems.

Storage technologies, renewable fuels and CCU: solutions including batteries and other energy storage systems, renewable hydrogen, advanced biofuels and renewable synthetic fuels, as well as carbon capture and utilisation technologies, all aimed at facilitating climate neutrality.

A call for genuine industrial pilots

“Although formally framed under Horizon Europe, this call departs from the traditional model of more exploratory collaborative R&D projects,” notes Daniel Magni, European Projects Operations coordinator at Zabala Innovation. Here, Brussels requires a significantly higher level of technical, operational and financial maturity than usual.

Consequently, already at proposal stage, consortia must demonstrate that the pilot can reach Final Investment Decision (FID) and provide a business model and market-readiness strategy far more developed and detailed than is standard in other framework programme calls. Technological excellence alone is not sufficient: applicants must prove real viability and outline a clear path to market.

This logic is reinforced during implementation. The critical milestone will be the pilot’s FID, at which point the European Commission will take a go/no-go decision based on the documentation submitted. Detailed engineering, techno-economic assessment, a full business plan, market access strategy, identification of the lead industrial partner and the relevant permits will be required. In practice, this reflects a filter typical of instruments such as the Innovation Fund, where the focus is on projects ready to invest and scale up, rather than on pure research and development.

Experience to tackle complex calls

Previous experience in European programmes is key to successfully navigating a call of this complexity. Zabala Innovation has built a solid track record in both Horizon Europe and the Innovation Fund, securing more than €750 million for its clients under the former since its launch in 2021, and mobilising around €2.1 billion under the latter, active since 2020. This experience enables the consultancy to support industrial companies and consortia at every stage of the process, from the strategic definition of the pilot to structuring proposals aligned with the technical, financial and market requirements of the Clean Industrial Deal.

In this context, Zabala Innovation stresses the need to act early. “Although the deadline is in September, reaching agreements among the various stakeholders to launch a real industrial pilot is not straightforward,” warns Magni. “For this reason, the best time to assess project alignment with this call is now,” he concludes.

Zabala Innovation will be present with a stand at the European Industrial Energy Days in Rotterdam on 4th March to engage with industrial stakeholders on the opportunities opened up by this call and to explore potential projects.