Innovation Fund 2023 opens with record budget of €4 billion

The opening of the Innovation Fund 2023 call marks a milestone with a record budget of €4 billion to support the uptake of innovative decarbonisation technologies. This call doubles the funds available for clean tech manufacturing projects compared to the previous call and allocates €1.4 billion to strengthen industrial manufacturing capacity, technology leadership and supply chain resilience in Europe. Project promoters have until 9 April 2024 to submit their applications through the EU Funding and Tenders Portal.

They will have the opportunity to apply for grants in five distinct categories, each with specific budget and CAPEX requirements:

• General decarbonisation, large-scale: €1.7 billion is available for projects with a CAPEX of more than €100 million.
• General decarbonisation, medium scale: €500 million is available for projects with a CAPEX between €20 million and €100 million.
• General decarbonisation, small scale: €200 million are allocated for projects with a CAPEX between €2.5 million and €20 million.
• Clean technology manufacturing: €1.4 billion is earmarked for projects with a CAPEX of more than €2.5 million, with an emphasis on the manufacture of components for renewable energy, energy storage, heat pumps and hydrogen production.
• Pilot projects: €200 million is earmarked for projects with a CAPEX above €2.5 million, with an emphasis on deep decarbonisation.

Projects will be assessed based on their potential to reduce greenhouse gas emissions, as well as their degree of innovation, maturity, replicability, and cost-effectiveness. The Innovation Fund programme can cover up to 60% of the eligible costs of a project. In addition, eligibility is extended to projects located in the European Economic Area (EEA), and, following the recent revision of the EU Emissions Trading Scheme Directive, calls are opened to additional sectors such as maritime, road transport and construction, as well as technologies in energy-intensive sectors such as aviation, renewable energy, or energy storage.

Promising projects that do not reach sufficient maturity to receive a grant or are not selected due to budgetary constraints will be eligible for project development assistance provided by the European Investment Bank.

Next steps of Innovation Fund 2023

The European Commission recommends participation in the Innovation Fund 2023 Information Day, which will take place online on 7 December 2023. This event offers the opportunity to gain experience about the new features, understand the application procedures and ask questions to the European Climate, Infrastructure and Environment Executive Agency (CINEA), which oversees implementing the Innovation Fund calls. In addition, the fund’s national contact points organise information days in most Member States.

In terms of timing, the evaluation results are expected to be available in the last quarter of 2024, and successful applicants will sign grant agreements in the first quarter of 2025.

In addition, the Innovation Fund has launched the first pilot auction under the European Hydrogen Bank, with a budget of EUR 800 million for project promoters in the EEA. Importantly, projects will not be able to combine support from the Innovation Fund call with the European Hydrogen Bank pilot project.

Zabala Innovation, a reference in this programme

Innovation Fund, endowed with €40 billion from the EU Emissions Trading Scheme between 2020 and 2030, aims to financially incentivise companies and authorities to invest in advanced low-carbon technologies, thus supporting Europe’s transition to climate neutrality. To date, the Innovation Fund has awarded around €6.5 billion to more than 100 innovative projects through its previous calls.

In the previous phase of the Innovation Fund, in which there were separate calls for large-scale and small-scale projects, Zabala Innovation saw the quality of its work in accompanying its clients reflected in the results. So far, the consultancy firm has led six Large Scale projects to success, including Ecoplanta. In the last Innovation Fund Large Scale call for proposals, the results of which were announced in July, five projects supported by Zabala Innovation were funded. As a result, the consultancy firm’s success rate (45%) was 2.6 times higher than the overall rate.