EU commits €3.4B to 77 net-zero technology projects

The European Commission has selected 77 net-zero technology projects to receive €3.4 billion in funding from its Innovation Fund, with grants for a wide range of sectors, including renewables, energy-intensive industries, cleantech manufacturing, critical raw materials processing and carbon capture and storage.

The grants, financed by revenue from the EU Emissions Trading System, span 23 countries across the European Economic Area.

The commission estimates the selected projects could avoid the equivalent of about 290 million metric tons of greenhouse gas emissions over their first decade of operations, contributing to the EU's 2050 climate neutrality goal.

Funding is distributed across five categories, and 12 large-scale projects received the largest share of about €1.58 billion, covering advanced decarbonized fuels, industrial carbon management, chemicals, iron and steel, aviation, and a Critical Raw Materials Act project.

Another 17 medium-scale projects requested €458 million targeting chemicals, refineries, maritime, glass, cement and lime, bioenergy, iron and steel and hydrogen.

In addition, 20 small-scale projects requested €124 million across critical raw material recycling, maritime, pulp and paper, ocean energy, buildings, refineries, chemicals, hydrogen, and advanced alternative fuels.

Nearly €895 million was earmarked for 12 clean-tech manufacturing projects for heat pumps, solar panels, electrolyzers, electric-vehicle batteries and a facility producing rare earth magnets.

About €394 million was for 16 pilot projects covering aviation, wind energy, ocean energy, maritime, nuclear energy, direct air carbon capture and storage, hydrogen, chemicals and refineries.

For the first time, the selected list includes a small modular nuclear reactor project and a direct air carbon capture and storage project, marking an expansion of the fund's technology scope.

The round also includes six critical raw materials projects feeding into the policy priorities of the Net-Zero Industry Act and the RESourceEU Action Plan.

All five funding topics were oversubscribed, the commission said confirming "the maturity of Europe's net-zero technology sector and its strong commitment to decarbonize, in alignment with the Clean Industrial Deal."

A further 84 projects passed the evaluation but did not receive funding from the available budget. Those projects, along with the 77 successful ones, will benefit from the STEP seal quality label, which the Commission said facilitates access to other private and public funding sources.

A further 160 proposals remain eligible for Project Development Assistance through the European Investment Bank, which provides technical and financial advisory support.

Next steps

Project promoters have been invited to begin preparing grant agreements with the European Climate, Infrastructure and Environment Executive Agency. The results of the grant agreement process will be announced in the first quarter of 2027, the commission said.

The commission is preparing to launch the next round of Innovation Fund calls in early December 2026, which will include a €1 billion clean-tech manufacturing topic designed to support the de-risking of supply chains in line with the RESourceEU Action Plan.

The Innovation Fund, which is leveraging estimated revenues of €40 billion from the EU ETS over the period 2020-2030, now has a full portfolio of about 320 projects with almost €17 billion in grants committed, the EC said.

In 2025, the commission also launched the first industrial heat auction and the third hydrogen auction under the European Hydrogen Bank, also part of the Innovation Fund, with grant agreements for both expected to be signed before the end of 2026.