Innovation Fund (IF) – EU Funding for Net-Zero Technologies and Industrial Decarbonisation

Updated on 16 July 2026

What is the Innovation Fund?

The Innovation Fund (IF) is one of the European Union's flagship funding programmes for the demonstration and commercial deployment of innovative net-zero and low-carbon technologies. Financed through revenues from the EU Emissions Trading System (EU ETS), the programme provides around EUR 40 billion between 2020 and 2030 to support projects that accelerate industrial decarbonisation, renewable hydrogen production, clean energy deployment and Europe's industrial transformation.

Unlike Horizon Europe, which funds research and innovation projects across different stages of technology development, the Innovation Fund focuses on market-ready demonstration and investment projects with a Technology Readiness Level (TRL) of 7 to 9. Its objective is to accelerate the market uptake of innovative clean technologies while strengthening Europe's industrial competitiveness.

The Innovation Fund is part of the European Union's industrial and climate policy and contributes to the implementation of the European Green Deal, the Net-Zero Industry Act and the Strategic Technologies for Europe Platform (STEP).

Programme at a glance

Funding programme: Innovation Fund
Funding period: 2020–2030
Budget: Financed through the EU Emissions Trading System (EU ETS); expected to provide around €40 billion (depending on carbon allowance prices)
Funding authority: European Commission (CINEA)
Target groups: Companies, consortia and public authorities developing innovative clean technology projects
Funding priorities: Industrial decarbonisation, renewable energy, energy storage, carbon capture, utilisation and storage (CCUS), clean mobility and net-zero technologies

Which projects does the Innovation Fund support?

The Innovation Fund supports projects that:

• significantly reduce greenhouse gas emissions;
• demonstrate innovative net-zero and low-carbon technologies;
• accelerate industrial decarbonisation;
• advance renewable energy and renewable hydrogen production;
• strengthen Europe's technological sovereignty;
• create new industrial value chains within Europe.

Which technologies are eligible for funding?

1. Industry and energy-intensive sectors

• Steel
• Chemicals
• Cement
• Glass
• Ceramics
• Climate-neutral industrial production processes

2. Carbon Capture, Utilisation and Storage (CCUS)

• Carbon Capture and Storage (CCS)
• Carbon Capture and Utilisation (CCU)
• Carbon-to-X technologies

3. Renewable energy and energy storage

• Innovative solar and wind technologies
• Renewable hydrogen
• Electrolysers
• Battery technologies
• Long-duration energy storage

4. Sustainable mobility

• Climate-neutral shipping
• Low-emission aviation
• Sustainable heavy-duty transport

5. Net-zero technologies and energy infrastructure

• District heating networks
• Integrated energy systems
• Innovative building technologies
• Manufacturing facilities for strategic clean-tech components

What funding calls are available?

The Innovation Fund regularly publishes funding calls for projects of different sizes and technology areas.

These include:

• Large Scale Calls
• Medium Scale Calls
• Small Scale Calls
• Manufacturing Calls for strategic net-zero technology manufacturing
• Pilot Projects
• technology-specific Innovation Fund Auctions, for example for renewable hydrogen

Current funding opportunities are published on the EU Funding & Tenders Portal.

Scope of funding

The Innovation Fund provides:

• grants covering up to 60% of eligible project costs;
• technology-specific competitive auctions, where different funding mechanisms may apply.

The available funding depends on the respective call.

Who can apply?

Eligible applicants include:

• companies of all sizes;
• start-ups;
• small and medium-sized enterprises (SMEs);
• industrial companies;
• project consortia;
• public and private organisations.

Projects should demonstrate market-ready technologies and make a significant contribution to Europe's decarbonisation objectives.

Evaluation criteria

The European Commission evaluates proposals based on:

• greenhouse gas emission reductions;
• degree of innovation;
• technological maturity;
• scalability;
• cost efficiency;
• financial and commercial maturity;
• European added value.

Why apply for the Innovation Fund?

The Innovation Fund enables organisations to:

• bring innovative net-zero technologies to market more quickly;
• implement large-scale demonstration projects;
• mobilise private investment;
• contribute to Europe's industrial transformation;
• strengthen their international competitiveness.

BayFOR advisory services

Are you planning a demonstration or investment project in clean technologies, industrial decarbonisation, renewable hydrogen, net-zero technologies or industrial transformation?

The Bavarian Research Alliance (BayFOR) provides independent, free-of-charge support to companies, research organisations and public institutions in Bavaria. Our services include:

• assessing your project idea for Innovation Fund funding;
• identifying suitable EU funding programmes;
• supporting the preparation of your proposal;
• accompanying you throughout the application process.

Contact BayFOR's EU funding experts to discuss your project idea.