(fra Kommisjonens rapport 17.12.2025)

Under Article 10a(8) of the EU ETS Directive , the European Commission must report annually to the Climate Change Committee on the implementation of the Innovation Fund (‘the Fund’), which aims to bring solutions to decarbonise sectors covered by the EU Emissions Trading System (EU ETS) to market across the European Economic Area (EEA). This funding instrument supports the deployment of innovative technologies and flagship projects that promise significant greenhouse gas (GHG) emission reductions and can demonstrate ‘clean industry’ business cases. It was designed as part of the European Green Deal  and in line with the goals of the Paris Agreement  to support Europe’s transition to climate neutrality while bolstering its competitiveness.

The Fund supports projects through lump sum grants (regular grants) and unit contributions (auctions).

This report details the allocation of funding awarded to projects by sector and eligible country and analyses their contributions to EU policy objectives, covering the Fund’s implementation from 1 January to 31 December 2024.

1.Project portfolio contributions to the EU’s climate neutrality objectives

The Green Deal Industrial Plan  aims to increase the competitiveness of Europe’s net-zero industry, in particular through the Net-Zero Industry Act (NZIA), which sets goals for net-zero industrial capacity and accelerates the deployment of such capacity. The Fund directly supports these policies by introducing a dedicated topic for clean tech manufacturing with EUR 1.4 billion in budget under the IF23 NZT call for regular grants. Overall, this has led to the Fund supporting a robust portfolio ( 1 ) of projects to promote the manufacturing of key technologies in the transition to climate neutrality. In total, 25 new clean tech manufacturing projects have been selected in the IF23 NZT call, in addition to the 15 existing projects focused on developing, building and operating manufacturing plants for key components in energy storage, renewable energy and energy-intensive industries.

(I)This will bring the Fund’s total support for EU net-zero manufacturing ( 2 ) to EUR 2.4 billion. These projects aim to install 8.1 GW per year of solar PV manufacturing capacity and 11.6 GW per year of electrolyser production capacity.

(II)In total, 41 innovation projects and more than EUR 5 billion from the Innovation Fund have been dedicated to supporting industrial carbon management since 2020. This includes up to 18.6 million tonnes per year of CO2 capture capacity for carbon capture and storage (CCS) (which could meet 37% of the CO2 injection capacity target under the Net-Zero Industry Act) and up to 11.7 million tonnes per year of CO2 injection capacity (23% of the CO2 injection capacity target under the Net-Zero Industry Act).

The Fund will also increase the share of renewables in the electricity mix and improve energy security by supporting targeted technology deployments outlined in the revised Renewable Energy Directive , the European wind power action plan  and the strategy to deliver on the EU offshore renewable energy ambitions . Including IF23-selected projects, the Innovation Fund supports 11 wind or wind manufacturing projects (granting EUR 375 million in aid), 14 solar and solar manufacturing projects (EUR 607 million), five hydro and ocean projects (EUR 118 million) and one geothermal project (EUR 92 million).

The REPowerEU  plan highlights hydrogen produced using renewable electricity, known as ‘RFNBO ( 3 ) hydrogen’, as a climate-neutral option for hard-to-decarbonise sectors. The Fund supports the demonstration of innovative renewable hydrogen-based technologies and thus plays an essential role in delivering the EU hydrogen strategy . With the announced and existing IF23 results, funding is granted to 27 projects with the capacity to produce more than 750 kilotonnes of RFNBO and low-carbon hydrogen per year.

Energy storage is key both for the mobility sector and for balancing electricity supply at grid level. The Innovation Fund has granted EUR 752 million to 13 projects for mobility, intraday and long-term storage. These include thermal energy storage in granite rocks, underground heat storage for district heating systems, grid-scale battery energy storage systems (BESSs) and pumped hydro storage.

The Fund also supports the development of alternative fuels, in line with the Regulations on ReFuelEU Aviation  and FuelEU Maritime :

(I)EUR 1.6 billion for fuel projects, including EUR 612 million for fuel produced exclusively for the transport sector. These include 14 hydrogen (EUR 522 million), five e-methanol (EUR 273 million), three ammonia (EUR 530 million), two SAF (EUR 206 million), two e-methane (EUR 87 million) and one bio-LNG (EUR 4 million) projects.

(II)Eight projects focused on mobility aim to avoid 27 million tCO2-eq. These include six projects in the maritime sector receiving dedicated support of EUR 211 million and EUR 95 million in funding for an electric aircraft.

Lastly, the Fund’s projects display significant potential to help meet the European Climate Law ’s goals of reducing GHG emissions by 963 Mt CO2-eq over 10 years ( 4 ). Given the high replicability potential of the technologies deployed, this will be a substantial contribution to making Europe the first climate-neutral continent in the world by 2050.

At the end of 2024, the Innovation Fund had signed or selected 199 projects across 26 countries, allocating a total of EUR 11.2 billion in support.

The table below provides an overview of these projects by category:

[tabell utelatt]