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What you need to know about the Innovation Fund

What is the Innovation Fund?

The Innovation Fund is a DG CLIMATE programme that builds on the lessons learned from the NER300 programme, on which it multiplies its budget to reach a total of 10 billion euros (1 billion euros in the first call). The grant helps to offset the risk of innovation in companies’ decarbonisation strategy. The funds come from the European Union Emissions Trading Scheme (EU ETS).

With respect to NER300, support for energy-intensive industry projects is highlighted, in addition to renewable energy projects or carbon capture and use (CCS) or capture and storage (CTS) projects, and energy storage projects are also added.

The Innovation Fund is one of the key elements that should help in the European Commission’s strategy for a climate-neutral Europe by 2050 described in its communication “A clean planet for all”.


Who’s it for?

This is a great opportunity for both the energy sector and industrial sectors such as steel, chemicals, paper, cement, ceramics, and other energy-intensive industries. Therefore, the Innovation Fund is primarily aimed at companies.

Who manages the Innovation Fund?

The calls for projects for the INNOVATION FUND will be managed by INEA (Innovation and Networks Executive Agency), the same agency that manages programmes such as CEF – Connecting Europe Facility, or that manages the Energy or Transport demonstration projects in HORIZON 2020.

INEA aims to make grant management easy and flexible, based on milestones and the degree of compliance with emission targets, unlike other programmes based on technical and economic justifications.

What is the difference between a HORIZON 2020 project and an Innovation Fund project?

The Innovation Fund will fill the funding gap that lies behind the R&D projects usually funded by HORIZON 2020 or HORIZON EUROPE, and which hinder the first commercial projects of a technology before it is mature.

The Innovation Fund proposes to subsidise real investment projects, with high innovative content and in many cases with very high investment values. Furthermore, as these are investment projects, no consortium is required: a company can submit an individual application to the Innovation Fund, although it is also possible to do so in a consortium.

What grant does the Innovation Fund give?

A project can receive a grant of up to 60% of its additional costs, including not only the extra costs of the investment phase but also the extra costs during the first years of operation. By financing the additional costs, co-financing with other sources is greatly encouraged, which facilitates the financial viability of the projects.

What will the first Innovation Fund call be like?

The first of the calls, for budgets with a CAPEX of more than 7.5 million euros, will be published in June 2020, with proposals in two phases. In the future there will also be calls for smaller projects. The deadline for submission of the first phase is scheduled for September this year.

In the first phase, projects will be evaluated on the basis of their degree of technological novelty, avoided greenhouse gas emissions (GHG), and the maturity of the project.

What exactly does “technological novelty” mean?

We are not talking about R&D projects, which would reach a TRL7, but in this case we would be in a TRL8: the first industrial application of a technology (“first of a kind” projects) or with technologies that are not yet commercially available. Only projects that are innovative in relation to the state of the art will be financed.

How are the avoided greenhouse gas emissions calculated?

INEA will provide guidelines to clearly calculate the avoided greenhouse gas emissions, whether CO2 or other gases included in the Emissions Trading Scheme. The calculation methodology will be different depending on the type of project: a renewable project is not the same as an industry project, and an energy storage project is not the same as a carbon capture and use project.

What is the maturity of the project?

The project is considered “mature” if it is ready to be evaluated by investors. A company’s investment project, as it would be presented to the company’s CEO or to potential investors or banks, is the basis for an Innovation Fund application,

What will the second phase be like?

The second phase of the call will close in spring 2021, and the criteria of potential market or scalability and cost efficiency or how much support is requested based on the expected GHG emission savings are added to the evaluation.

Are you interested? Contact us

From our experience in the previous program NER300, our participation in European technology platforms and as leaders in the presentation of Energy or SPIRE projects in HORIZON 2020, in ZABALA we are already prepared for the new program. We have followed the management of the program since it was announced in February 2019, and now from our offices in Spain, France and Brussels, we are already analyzing projects for the first call of Innovation Fund. We will be delighted to hear from you.