The Innovation Fund is one of the world’s largest funding programmes for demonstration of innovative low-carbon technologies.
What is the European Commission’s Innovation Fund
The Innovation Fund is intended to be a key funding instrument for delivering the EU’s economy-wide commitments under the Paris Agreement and in support of the European Commission’s strategic vision of a climate neutral Europe by 2050. The Innovation Fund along with the EU Emissions Trading Scheme (ETS) will provide long-term incentives for deployment of innovative technologies required in order to deliver the EU’s low carbon transition.
Funding for the Innovation Fund will derive from revenues raised by the EU Emissions Trading System (EU ETS), the world’s largest carbon pricing system, and any unspent funds from the NER300 programme.
The Innovation Fund is likely to have a value of approximately €10 billion, depending on the level of the ETS carbon price over the period 2020 to 2030.
The Innovation Fund will support projects in the following areas:
- Innovative low-carbon technologies and processes in energy intensive industries, including products substituting carbon intensive ones
- Carbon capture and utilisation (CCU)
- Construction and operation of Carbon capture and storage (CCS)
- Innovative renewable energy generation
- Energy storage
The first call of the Innovation Fund was launched by the European Commission on the 3rd of July 2020. This initial call is focused on large scale projects, i.e. projects with capital expenditure above €7.5million. The call is open until the 29th of October 2020. For more details on the application process, including relevant documentation, please visit the European Commission website. A call for small scale projects is expected in late 2020 or early 2021.
What will be funded?
The Innovation Fund will focus on highly innovative technologies and big flagship projects with European value added that can bring about significant emission reductions. The intention of the Fund is to share the risk of innovation with project promoters to help with the demonstration of first-of-a-kind highly innovative projects.
It will aim to finance a varied project pipeline achieving an optimal balance of a wide range of innovative technologies in all eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) and Member States.
The Fund will also support cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, and will be open to both small-scale and large-scale projects. Small-scale projects with total capital costs under €7.5 million will be able to benefit from simplified application and selection procedures.
Projects will need to be sufficiently mature in terms of planning, business model and financial and legal structure in order to be funded.
Projects will be selected based on the following criteria:
- Effectiveness of greenhouse gas emissions avoidance
- Degree of innovation
- Project viability and maturity
- Cost efficiency (cost per unit of performance)
The selection criteria will be weighted according to their relative importance. The final ranking of projects will be established based on comparing the scores across and within different sectors. The calls for proposals will set the detailed scoring and ranking methodology, as well as possible additional criteria for geographical and sectoral balance.
Ireland is represented by Margaret McCarthy (Higher Executive Officer, Environment Advisory Unit, DCCAE) on the Innovation Fund Steering Group. Any queries on the Innovation Fund should be sent to email@example.com
Further information about the Innovation fund can be found on the European Commission website