The European Commission has selected 77 European net-zero technology projects for €3.4 billion ($3.8 billion) in funding under the Innovation Fund’s latest call, launched in December 2025, to accelerate industrial decarbonisation, strengthen clean technology supply chains and support the European Union’s climate neutrality ambitions.

The projects span 23 countries across the European Economic Area (EEA), covering energy-intensive industries, renewable energy, energy storage, clean technology manufacturing, low-emission mobility, critical raw materials processing and recycling, alternative fuels and industrial carbon management.

For the first time, the selected portfolio includes a small modular nuclear reactor project and a direct air carbon capture and storage (DACCS) project.

It also features six critical raw materials projects supporting priorities under the Net-Zero Industry Act and the RESourceEU Action Plan.

These initiatives aim to strengthen supply chains for clean technologies, including rare earth permanent magnets and batteries.

The Commission estimates the projects could prevent greenhouse gas emissions equivalent to approximately 290 million tonnes during their first decade of operation, contributing to the EU’s target of achieving climate neutrality by 2050.

The funding is being provided through revenues from the EU Emissions Trading System (EU ETS), which reinvests carbon market proceeds in innovative low-carbon technologies.

Funding across five categories

The selected projects fall into five categories: large-scale, medium-scale and small-scale decarbonisation, clean technology manufacturing and pilot projects.

Twelve large-scale projects were selected, requesting approximately €1.58 billion in funding.

They cover advanced decarbonised fuels, industrial carbon management, chemicals, iron and steel, aviation and a strategic critical raw materials project.

The medium-scale category includes 17 projects seeking around €458 million.

These initiatives span chemicals, refineries, maritime transport, electricity storage, glass, ceramics, construction materials, cement, lime, bioenergy, steel and hydrogen.

Twenty small-scale projects requested approximately €124 million, covering critical raw materials recycling, maritime transport, pulp and paper, ocean energy, buildings, refineries, chemicals, hydrogen, alternative fuels and electricity.

The clean technology manufacturing category includes 12 projects requesting nearly €895 million.

These will support manufacturing components such as heat pumps, solar panels, electrolysers and electric vehicle batteries, alongside a facility producing rare earth magnets.

A further 16 pilot projects requested approximately €394 million.

Their focus includes aviation, wind and ocean energy, maritime applications, nuclear energy, direct air carbon capture, hydrogen, chemicals and refineries.

All five categories were oversubscribed, highlighting strong industry demand for funding to advance clean technologies.

Additional projects receive support

A further 84 proposals passed the evaluation but were not awarded grants because of budget constraints.

Alongside the 77 successful projects, they will receive the Strategic Technologies for Europe Platform (STEP) Seal, which can help attract funding from other public and private sources.

Another 160 proposals remain eligible for Project Development Assistance (PDA), which provides technical and financial advisory support through the European Investment Bank to improve project readiness.

Project promoters selected for funding have been invited to begin grant agreement preparations with the European Climate, Infrastructure and Environment Executive Agency (CINEA).

The process will finalise budgets, timelines, technical and financial deliverables, and legal responsibilities. Results are expected in the first quarter of 2027.

Next funding round planned for December

The Commission plans to launch the next Innovation Fund calls in early December 2026, including a €1 billion clean technology manufacturing funding category aimed at reducing supply chain risks under the RESourceEU Action Plan.

The latest call attracted 358 applications seeking €17.5 billion, against an available budget of €2.9 billion.

The wider Innovation Fund portfolio now comprises around 320 projects, with almost €17 billion in grants committed.

Projects are assessed independently against their potential to reduce emissions, innovation, maturity, replicability and cost efficiency.

The fund draws on estimated EU ETS revenues of €40 billion over 2020-2030 to support Europe’s transition towards climate neutrality. -OGN/TradeArabia News Service