Brussels redesigns Innovation Fund with five calls for 2026

The European Commission is outlining a significant reorganisation of the Innovation Fund for 2026. According to the first guidelines presented by DG CLIMA at the stakeholder consultation event held in Brussels in mid-June, the next edition of the programme will be structured around five differentiated instruments: a new call for net-zero technologies, the fourth European Hydrogen Bank auction, a second auction for industrial heat, and two newly created specific calls, one for maritime projects and another for SMEs. The main new feature is that certain project categories which, until now, competed within broader schemes will have their own routes, with the aim of improving participation, adapting rules to sectoral needs and simplifying access to funding.

Net-Zero Technologies

The most visible change affects the Net-Zero Technologies call, which will retain its role as the main instrument for innovative industrial decarbonisation technologies, but with a more clearly defined scope. The European Commission plans to keep the categories of large projects, medium-sized projects, clean-tech manufacturing and pilots, while moving two areas into dedicated calls: maritime and small-scale for SMEs. “Brussels is fine-tuning the instrument so that each type of project competes in a more suitable environment,” explains Javier Ordóñez, consultant at Zabala Innovation, after attending the event.

The uncertainty lies in how small-scale projects will be delimited. According to this expert, and pending publication of the final conditions, all indications are that the Net-Zero Technologies call could continue to accommodate small-scale projects not promoted by SMEs, while SMEs would have a separate and simplified route. This boundary will be particularly decisive in relation to investment thresholds, eligibility and type of beneficiary.

Innovation Fund SMEs

The new Innovation Fund SMEs call is emerging as one of the major commitments for 2026. The European Commission is considering a simpler application process, with less technical information and fewer annexes, a simplified methodology for calculating emissions reductions and the conversion of some evaluation criteria into pass/fail requirements. Two cut-off dates are also expected, which would give companies greater flexibility to prepare their proposals. For Ordóñez, this new feature could correct a recurring barrier in the programme: “Many SMEs have projects with potential, but they cannot always take on the administrative burden of a call designed for large-scale operations,” he stresses.

Innovation Fund Maritime

The other major new feature is the creation of a specific maritime call. Until now, the sector had received support through both the Net-Zero Technologies calls and the hydrogen auctions, with funding for the production of alternative fuels, vessel adaptation and solutions linked to the decarbonisation of maritime transport. However, the European Commission acknowledges that the bonus points mechanism has not been enough to attract the desired level of participation. The barriers identified include high CAPEX, complex value chains, long development timelines, dependence on port infrastructure and eligibility rules that are not always aligned with the sector’s reality.

The future Innovation Fund Maritime call is expected to have its own budget, which has not yet been published, and to retain elements of the maritime framework already developed in the Net-Zero Technologies calls. Brussels plans to introduce specific requirements related to vessel registration and calls at European ports, as well as a dedicated methodology to calculate emissions reductions, while maintaining the Innovation Fund’s five usual evaluation criteria. “It remains to be clarified to what extent the new maritime line will integrate renewable fuels of non-biological origin (RFNBO) solutions that previously appeared in the hydrogen auction,” notes Ordóñez.

Fourth hydrogen auction

In parallel, the fourth European Hydrogen Bank auction will move towards a single-topic structure focused on RFNBO hydrogen production and low-carbon electrolytic hydrogen production. This means eliminating the specific maritime and aviation window that featured in the 2025 Innovation Fund auction. The European Commission plans to publish the draft terms and conditions before the launch, expected at the end of the year, and to maintain the auction-as-a-service mechanism so that Member States can complement European funding with national funds.

Second industrial heat auction

The second Heat Auction will also continue in 2026, with an expected budget of €1 billion. Following the pilot experience, DG CLIMA proposes maintaining the general approach, while introducing simplifications in emission factors, flexibility requirements and the documentation required. In addition, the technological scope is being broadened with options such as nuclear heat, waste heat recovery from data centres and certain large-scale projects in temperature ranges of 80 to 100°C.

A promising context

This redesign is part of a programme that has gained weight as a central instrument of European climate industrial policy. Since its launch, the Innovation Fund has committed around €22 billion and assessed more than 2,500 proposals. The current portfolio includes 331 selected projects, with a strong presence of energy-intensive industries, hydrogen, clean-tech manufacturing and industrial carbon management.

The 2025 results help explain the shift. The Net-Zero Technologies call continued to record demand far above the available budget; the hydrogen auction attracted 57 bids from 11 countries, with Spain as a particularly active player; and the first industrial heat auction selected 65 projects in 10 countries, with close to €400 million in grants funded by revenues from the European emissions trading market.

In this last call, Zabala Innovation achieved the selection by the European Commission of all the projects it supported, with approved initiatives in Spain and Portugal. “The result confirms both the industry’s growing interest in electrifying and decarbonising its thermal processes and the potential of specific funding schemes to mobilise projects that do not always fit as strongly into broader calls,” concludes Ordóñez.