The Innovation Fund (IF) focuses on funding cutting-edge European initiatives and technologies that have the potential to significantly reduce emissions, so it is designed to distribute the risk across project sponsors and promote ground-breaking, first-of-its-kind decarbonisation projects.

What is the Innovation Fund?

The Innovation Fund is the EU’s climate policy fund focusing on energy and industry. It seeks to increase industrial competitiveness while bringing to market technologies to decarbonize the European industry and support its transition to climate neutrality. It is a crucial financial tool for achieving the EU’s economy-wide obligations under the Paris Agreement.

The Fund seeks to finance a diverse project pipeline by striking the best possible balance between a variety of cutting-edge technologies in all eligible industries and nations. Projects must be located in the EU members, Iceland, Norway, and Lichtenstein but applications from entities based outside these countries are eligible.

What are the Innovation Fund goals?

The Innovation Fund aims to:

• help businesses invest in clean energy and industry,
• boost economic growth,
• create future-proof jobs,
• reinforce European technological leadership on a global scale.

This is done by funding innovative projects focusing on:

• innovative low-carbon technologies and processes in energy-intensive industries, including products that can substitute carbon-intensive ones,
• carbon capture and utilisation – CCU,
• construction and operation of carbon capture and storage (CCS) facilities,
• innovative renewable energy generation,
• energy storage.

Requirements for applicants

The fund is open to large-scale projects with a capital expenditure (CAPEX) above €7.5 million, as well as to small-scale projects with capital expenditure (CAPEX) under €7.5 million. The projects need to be sufficiently mature in terms of planning, business model as well as financial structure.

The Innovation Fund aims to finance a varied project pipeline achieving an optimal balance of a wide range of innovative technologies in all eligible sectors and EU countries, Norway and Iceland.

Budget

The Innovation Fund supports up to 60% (in case of regular grants) and up to 100% (in case of competitive bidding) of the relevant costs calculated according to the methodology indicated in each call for proposals (usually covering capital and operational costs minus revenues over the first ten years of operation).

The grants are being disbursed in a flexible way based on project financing needs, taking into account the milestones achieved during the project lifetime.

For regular grants, up to 40% of the grant can be given based on pre-defined milestones before the whole project is fully up and running.

If you want to know more about the Innovation Fund

This guide presents general information about it, and dives into the requirements applicants need to fulfill, and gives a brief explanation of the evaluation criteria followed by the Innovation Fund, including information about the steps to follow once the application has been successful.

If you want to know more about the application process for the Innovation Fund and access Strata’s unique advice and offering, download our guide: