Distributed Energy Resources, Finance, Sourcing Renewables  -  December 4, 2024

EU Commission Allocates €4.6 Billion for Innovation Fund

The European Commission earmarked €4.6 billion to boost net-zero technologies, electric vehicle battery cell manufacturing and renewable hydrogen under the Innovation Fund.

The Commission is stepping up its efforts to boost net-zero technologies that are key to ensure the competitiveness of European industry while meeting climate goals. It is launching two new calls for proposals with a budget of €3.4 billion to accelerate the deployment of innovative decarbonization technologies in Europe, including batteries for electric vehicles, according to a statement. 

It is also launching the second auction of the European Hydrogen Bank to accelerate the production of renewable hydrogen in the European Economic Area (EEA) with a budget of €1.2 billion from EU funds, plus over €700 million from three Member States. Both calls for proposals and the auction are financed by the Innovation Fund, using revenues from the EU Emissions Trading System (ETS).

The batteries call and hydrogen bank auction will also include specific resilience criteria to protect Europe against dependency on a single supplier.

The general call for net-zero technologies worth €2.4 billion (IF24 Call) supports decarbonization projects of different scale, as well as projects focusing on the manufacturing of components for renewable energy, energy storage, heat pumps and hydrogen production.

Projects that apply to the Net-Zero Technologies Call will be assessed based on their potential to reduce GHG emissions, degree of innovation, project maturity, replicability, and cost efficiency. 

For the first time, a €1 billion call for electric vehicle battery cell manufacturing (IF24 Battery) will support projects that can produce innovative electric vehicles battery cells or deploy innovative manufacturing techniques, processes and technologies. 

The Commission and the European Investment Bank (EIB) have initiated a new partnership to support investments in the EU's battery manufacturing sector. This partnership will see a €200 million top-up (loan guarantee) to the InvestEU program from the Innovation Fund. The money will be directed to support innovative projects along the European battery manufacturing value chain to address financing challenges by enabling additional EIB venture debt operations over the next three years. 

The Commission is also launching the second auction under the European Hydrogen Bank, via the Innovation Fund (IF24 Auction). It will allocate €1.2 billion from EU Emissions Trading System (ETS) revenues to support producers of hydrogen categorized as Renewable Fuel of Non-Biological Origin (RFNBO) located in the European Economic Area (EEA).

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