THE INNOVATION FUND

The Innovation Fund (IF) will provide around EUR 10 billion of support over 2020-2030 for
the commercial demonstration of innovative low-carbon technologies, aiming to bring to the
market industrial solutions to decarbonise Europe and support its transition to climate neutrality.
The Innovation Fund focuses on:

 highly innovative technologies;

 big flagship projects;
 innovative low-carbon solutions;
 and small-scale projects that can bring on significant emission reductions.

Multiple calls of the Innovation Fund will be held regularly:

Large-scale projects: CAPEX more than € 7.5 Million: The first call launched on 3 July 2020,
and the European Commission will open new calls in the second half of every year.

Small-scale projects: CAPEX less than € 7.5 Million: The first call launched on 1 December
2020. The European Commission will open new calls in the first half of every year.

WHICH TECHNOLOGIES DOES THE INNOVATION FUND SUPPORT?

 The Innovation Fund supports projects in the sectors covered under the EU Emissions Trading
System. 
The technologies (or combinations of technologies) that are to be demonstrated in the project
need to be highly innovative. The aim is also to balance the spending of the Innovation Fund over
the above-listed categories.

The Innovation Fund will focus on highly innovative technologies and big flagship projects
with European added value that can bring about significant emission reduction and it aims to
finance a varied project portfolio achieving an optimal balance of innovative technologies in all
eligible sectors and across the Member States.

The projects need to be sufficiently mature from:

 a technical perspective via a feasibility study
 an economic perspective via a business model
 a legal perspective
 The Innovation Fund will also support cross-cutting projects on innovative low-carbon
solutions that lead to emission reductions in multiple sectors, for example, through industrial
symbiosis or business model innovation.

AMOUNT OF SUBSIDIES
 The Innovation Fund will support up to 60% of the costs linked to innovation. 
 The subsidies may be complemented by any other funding (e.g. national), but more than
100% of overall funding is not allowed.
 The grants will be disbursed flexibly based on project financing needs, considering the
milestones achieved during the project lifetime.
 Up to 40% of the grants can be given based on pre-defined milestones before the project
is fully up and running.
 40% of the total funding may be kept as soon as a financial close has been achieved, even
if the project's performance doesn't meet the targets. The rest of the 60% must be paid
back if the performance (CO2 reduction) is not as promised on a pro-rata basis.

APPLICATION AND SELECTION PROCESS

The applicant submitting an expression of interest will be assessed on:

 GHG emissions avoidance;
 Degree of innovation;
 Project maturity;
 Scalability;
 Cost-effectiveness.
 Projects that have not yet reached the required maturity may be eligible for the EU’s Project
Development Assistance (PDA).

WHAT ARE THE DIFFERENCES BETWEEN INNOVATION FUND AND HORIZON

2020? 

Innovation Fund Horizon 2020

Objective: Build and operate large-scale
industrial assets with breakthrough
technologies
Applicants: Single entity, i.e. national
consortia is not required
Selection criteria: Technical, business and
financial availability
Disbursement of the grant: Lump-sum
payments upon milestones and performance
(verified GHG emission avoidance)
Calls for the fund: Contents and conditions
of calls can be adjusted annually
Objective: Research programme
Applicants: At least three legal entities from
at least three member states
Selection criteria: Focus on research
Disbursement of the grant: Upon final
report and approval of the eligible cost
Calls for the fund: Seven-year work
programme

CONCLUSIONS

The Innovation Fund has emerged as a fresh force in EU technical investment because to its
very quick development. The most promising start-ups in Europe are finding this novel kind of
finance, which combines grants and money, to be particularly alluring, offering them the tools to
develop and build their businesses in Europe.
The Innovation Fund contributes to the widespread adoption of the technology advancements
required for the green transition. This request for proposals will encourage innovative ventures,
advancing them and getting them to the market as quickly as possible. This investment would
reinforce Europe's position as a worldwide technology leader and aid in the decarbonization of
the European economy, paving the way for climate neutrality in 2050.