The 2025 Innovation Fund calls are now open

The European Commission has opened three major funding windows designed to accelerate the deployment of decarbonisation technologies and expand the use of renewable hydrogen and electrified industrial heat. Framed within the Innovation Fund, these initiatives mobilise more than €5 billion, with deadlines running from February to April 2026.

They also introduce stricter eligibility checks and new criteria at a time when Brussels aims to strengthen supply chains in key sectors and improve transparency in the allocation of funds. The calls opened on Wednesday and are accompanied by detailed rules for applicants across the entire European Economic Area.

“The strong results obtained in recent calls confirm the robustness of our work and the capacity of European companies to advance industrial decarbonisation when they have the right support,” says Marcos Jareño, Head of Business Development in European Programmes at Zabala Innovation. “With 12 projects approved in the lines that closed in 2025 and more than 30 since the programme began, we continue to consolidate a success rate that demonstrates the effectiveness of our strategy in such a demanding instrument as the Innovation Fund,” he adds.

Net-Zero Technologies

The Net-Zero Technologies call is the fifth general round of the Innovation Fund and the largest of the three launched this week. It has a budget of €2.9 billion and will remain open until 23 April 2026. It targets projects capable of demonstrating emissions reductions in energy-intensive industries, renewable energy, mobility, buildings, storage, and carbon capture and storage.

The European Commission has divided the initiative into five categories covering large-scale (allocated €1.2 billion), medium-scale (€300 million) and small-scale (€100 million) decarbonisation investments; manufacturing of strategic components (€1 billion for components for renewable systems, batteries and others); and pilot projects (€300 million).

Investment thresholds by project type:

• Large scale: above €100 million.
• Medium scale: between €20 million and €100 million.
• Small scale: between €2.5 million and €20 million.
• Manufacturing facilities: above €2.5 million for components related to renewables, electrolysers, fuel cells, energy storage or heat pumps.
• Pilot projects (early-stage technologies): above €2.5 million with a maximum grant of €40 million.

“The results of the latest Net-Zero Technologies call confirm a clear trend: new large-scale projects with investments above €100 million face increasing difficulties in securing Innovation Fund support,” notes Jareño. “In contrast, smaller projects — such as innovative refurbishments, clean-tech manufacturing facilities or pilot actions — are likely to benefit from lower competition and higher success rates,” he forecasts.

Unlike last year, there will be no dedicated call for electric vehicle battery cell manufacturing. Instead, these activities are integrated into the clean technology components manufacturing line.

Brussels has introduced several further updates in this edition. The methodology for assessing emissions reductions has been revised and now includes additional risks linked to the requirement that projects must “do no significant harm” (DNSH) to the environment. This obligation must be evidenced already at the application stage. Replicability assessments have also been adjusted and now incorporate the same environmental safeguards.

Renewable hydrogen auction

The third renewable hydrogen auction, managed through the European Hydrogen Bank, focuses on the market deployment of renewable hydrogen produced from non-biological sources and low-carbon hydrogen generated via electrolysis. Unlike Net-Zero Technologies, it does not require innovation: it follows auction rules whereby projects request funding in the form of fixed-premium bids per kilogram of hydrogen produced; the lowest bids win. In the last auction, which closed in February this year, winning bids reached €1.22 per kilogram, including projects selected from the reserve list.

The submission deadline is 19 February 2026.

The auction includes three funding windows totalling €1.3 billion:

• RFNBO hydrogen only: €600 million.
• RFNBO hydrogen or low-carbon hydrogen: €400 million.
• RFNBO hydrogen or low-carbon hydrogen for maritime and aviation: €300 million.

This envelope is complemented by national schemes operating under an “auctions-as-a-service” model:

• Germany: €1.3 billion.
• Spain: €400 million.

The new topic dedicated to renewable hydrogen and low-carbon hydrogen produced via electrolysis opens opportunities for projects located in countries where hydrogen production costs are higher but electricity has a very low carbon footprint, such as Norway, Sweden, France or Portugal. “These projects can power electrolysers directly from the grid and thereby avoid competing in the same group as the usual candidates from southern Europe, where renewable electricity is cheaper and who are likely to apply to the first topic (renewable hydrogen only),” explains Jareño.

Regarding the third topic, “the increasing momentum behind hydrogen production solutions — both RFNBO and low-carbon — dedicated exclusively to the transport sector continues. This year, alongside the maritime sector, aviation is included for the first time,” highlights Natxo de Marco, Head of Energy in European Projects of Zabala Innovation.

This round also introduces new compliance controls. Projects will be assessed against the same DNSH criterion applied to the rest of the Innovation Fund. New supply chain requirements have been added: at least three-quarters of all electrolysers included in a project must come from outside China, and no more than two key components may be of Chinese origin. Projects that have already received European support under the Innovation Fund or other programmes will be excluded. The European Commission has published a table clarifying how different sources of public support may be combined.

Industrial heat auction

This is the major new feature of the 2025 Innovation Fund. With a budget of €1 billion, it is the first auction aimed at projects seeking to electrify industrial heat generation processes or replace them with renewable heat. The deadline is also 19 February 2026.

The auction is structured into the following windows:

• Medium-temperature processes (100–400°C) with capacity above 3 MW and below 5 MW thermal: €150 million.
• Medium-temperature processes (100–400°C) with capacity equal to or above 5 MW thermal: €350 million.
• High-temperature systems above 400°C: €500 million.

Spain has announced equivalent national windows for the first two categories, worth €30 million each.

The call aims to support the uptake of electrified industrial heat in sectors traditionally reliant on fossil fuels. Applicants must meet conditions relating to capacity thresholds, technological readiness and environmental criteria. The European Commission has stated that this auction will help assess how electrification can be implemented across different industries under competitive mechanisms.

“The more emissions-intensive the fuel being replaced — for instance, lignite, which generates far more emissions than natural gas — the greater the volume of avoided emissions and, consequently, the more competitive the bid,” says Jareño. “Countries with significant lignite use, such as Poland, are in a particularly strong position to benefit from this dynamic,” he concludes.