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Innovation Fund

The EU has set itself the ambitious goal of becoming climate neutral by 2050. The EU Innovation Fund has been set up to bring to market highly innovative technologies and industrial solutions to decarbonise Europe. Funding comes from the EU Emissions Trading Scheme (ETS). The aim is to support technologies in all Member States to accelerate the transition to a low-carbon, competitive and innovative EU economy. 

 

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What is the Innovation Fund?

The world's largest programme for the expansion of innovative technologies to protect the climate

With a budget of around €40 billion for the period 2020-2030, the European Innovation Fund is unique in the world. The funding programme is designed to help drive forward the implementation of European climate policy. The focus is on investing in innovative technologies that significantly advance the reduction of greenhouse gas emissions. 

Detailed information on the Innovation Fund can be found here. A short overview can be found in our blog article "EU Innovation Fund: Overview of the Funding Programme”.

Andre-Nadolny
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André Nadolny
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Innovation Fund

Deployment of net-zero and innovative technologies

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EurA AG – Your partner from start to finish for the Innovation Fund 

We support you in designing your application, guide you through the application process, advise you on project implementation and help you with project accounting. If you have any questions, we are  at your side with help and advice.

Invest in this unique opportunity - let's tackle it together. 

Innovation Fund: Everything you need to know about it right now

  1. Overview of the funding programme Innovation Fund
  2. Who can apply for support from the Innovation Fund?
  3. Which projects are supported by the Innovation Fund?
  4. What can be funded by the Innovation Fund?
  5. What costs are eligible for the Innovation Fund?
  6. Innovation Fund application process: how do I apply?
  7. What criteria are used to assess the applications submitted?
  8. When can I submit my Innovation Fund application?
  9. How long does the application process for the Innovation Fund take?
  10. Advice on the Innovation Fund
  11. Further Informationen

Overview of the funding programme Innovation Fund

The Innovation Fund is the European investment programme to bring climate-neutral technologies to the market, and the world's largest programme to support pioneering investment in low-carbon technologies. 

As the successor to the NER300 programme, the Innovation Fund aims to help companies invest in clean energy and industry, stimulate economic growth in the European Union (EU), create sustainable jobs and secure the EU's global technological leadership. 

The focus is on demonstrating innovative low carbon-technologies to decarbonise relevant industries in line with the European Green Deal and the EU's Net Zero Industry Act (NZIA). 

A special feature of the Innovation Fund is that it is not a traditional funding programme for research and development. The aim is to bring highly innovative technologies to the market on an industrial scale in order to make significant contributions towards climate neutrality and the reduction of greenhouse gas (GHG) emissions. The aim is also to increase the resilience of supply chains and Europe's strategic autonomy and competitiveness. 

Accordingly, it does not fund R&D projects, but rather demonstration projects with a long-life cycle and first industrial applications, i.e. technologies that are being used for the first time on a large scale ("first of a kind" projects) or that are not yet available on the market. 

The funding programme supports the scaling of clean tech for the fight against climate change in the following areas: 

  • Renewable energy generation/use and energy storage 
  • Reducing the carbon footprint of energy-intensive industries 
  • Carbon capture, use and storage (CCS) 
  • Mobility 
  • Buildings 

The funding, which will be awarded in annual calls between 2020 and 2030, will be financed by the EU Emissions Trading System (ETS). innovation-fund-approach

In addition to the traditional calls with a total budget of €4 billion for 2024, the Innovation Fund offers a second form of funding: sustainable hydrogen auctions with a total budget of around €800 million for 2024. 

Read more about the hydrogen auction in our blog article: "Innovation Fund: EU-wide auction for renewable hydrogen production."

 

 

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Who can apply for support from the Innovation Fund?

In principle, any legal entity (public or private) established in an eligible country can apply for funding from the Innovation Fund. This means that all companies and organisations directly responsible for the implementation and management of an innovation project are eligible to apply. Projects can be carried out by individual companies or small consortia. The project must take place in the Member States of the EU Emissions Trading Scheme, i.e. the EU Member States, Liechtenstein, Norway or Iceland. 

Important: Only projects that have not started at the time of application will be funded. In concrete terms, this means that construction work has not yet started and an initial legally binding commitment has not yet been made. 

However, preparatory work such as the purchase of land, obtaining permits and carrying out preliminary feasibility studies may be started before the project starts. These are not considered to be the official start of the project. 

 

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Which projects are supported by the Innovation Fund?

The Innovation Fund offers support for projects that promote innovative technologies and concepts and thus accelerate the transition to a low-carbon economy. Features such as degree of innovation, greenhouse gas savings, scalability and technical and financial maturity are taken into account. 

Projects in the areas of General Decarbonisation, Cleantech Manufacturing and Pilot Projects are generally eligible for funding. The project must be innovative compared to the state of the art.innovation-fund-funded-projects

There are three different project sizes in the General Decarbonisation thematic theme: Small (investment expenditure of €2.5 to €20 million), Medium (€20 to €100 million) and Large Scale (over €100 million). This gives all investment projects the opportunity to apply in the appropriate area by the same deadline. 

In principle, all planned projects that increase hydrogen production capacities in Europe are eligible to participate in the hydrogen auction. The electrical output of the electrolysis plant must be at least five megawatts electrical (MWel) per project.innovation-fund-topics-capital-expenditure-budget

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What can be funded by the Innovation Fund?

Highly innovative technologies and lighthouse projects that significantly reduce emissions are at the centre of the EU Innovation Fund. The aim is to finance a wide range of different projects in all eligible sectors and countries. 

The topic of General Decarbonisation includes not only energy-intensive industries, Carbon dioxide capture and storage (CCS), hydrogen, renewable energies and energy storage, but also buildings, road transport, maritime technologies and aviation. 

In the area of Cleantech Manufacturing, innovative projects are suitable for the design and development of production facilities for the manufacture of components and systems for renewable energies, electrolysers, fuel cells, heat pumps, energy storage systems, hydrogen production, as well as ships and aircraft. 

Finally, the suitable Pilot Projects include highly innovative projects in the field of General Decarbonisation with minimal residual emissions. 

In terms of technical project maturity, the Innovation Fund targets Technology Readiness Levels (TRL) 6 to 9, meaning that it is looking for mature projects ranging from pilots and demonstration projects to scale-ups. Sufficient maturity of planning, business model, financial and legal structure is also required. innovation-fund-trl-en

 

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What costs are eligible for the Innovation Fund?

The regular grant programme covers up to 60% of capital expenditure (CapEx) and operating expenditure (OpEx) less revenue for the first ten years of operation. Eligible costs are calculated using the "no reference plant" method as standard, or alternatively using the "reference plant" method in accordance with the calls for tenders. 

In the Hydrogen Innovation Fund auction, funding is provided in the form of a fixed premium on the price per kilogram of hydrogen produced for a period of up to ten years. This means that in the auctions (competitive bidding), up to 100% of the relevant costs are covered for the selected projects. 

In all cases, resources from the Innovation Fund will not be considered as State aid. 

In part 6 of our blog series on the Innovation Fund, we have summarised how to approach financial planning for your Innovation Fund application and how to determine the relevant costs for your innovation project. innovation-fund-funding-auction

 

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Innovation Fund application process: how do I apply?

The procedure is a single-stage application process. Applications for the regular Innovation Fund calls between 2020 and 2030 can be submitted via the relevant EU portal. 

The length of an application to the Innovation Fund should not be underestimated. The application documents comprise between 200 and up to 300 pages, including all mandatory annexes. In addition to the application, a business plan, a financial plan, an implementation plan, a feasibility study and a CO2 balance must be submitted. Preparing the application documents involves many steps requiring analysis and calculations. It may also be necessary to carry out a life cycle assessment for the application. Preparing the application therefore costs time and money. 

For an overview of the application process, see our table with all the key factors: 

 

Förderprogramme-Innovation-Fund_EN

 

For more information on the application process, see part 2 and part 3 of our blog series on the Innovation Fund. 

 

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What criteria are used to assess the applications submitted?

The evaluation and selection of proposals will be based on criteria in the following categories: 

  • Effectiveness of greenhouse gas avoidance 
  • Degree of innovation 
  • Maturity of the project 
  • Replicability 
  • Cost efficiency 

Within the available budget, the projects with the highest scores in all five categories are selected, regardless of the sector or location of the project. There are therefore no criteria based on the geographical location or the country in which a project is implemented. 

For the cost-effectiveness criterion, points are awarded according to a formula: Full points are awarded for a maximum of €4/t (funding requested in euros per tonne of CO2 saved over ten years); no points are awarded for more than €200/t. 

In the auction process, all projects that meet the minimum criteria are ranked according to the auction price. The cheapest projects will be awarded until the total budget is reached (€800 million in 2024).

 

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When can I submit my Innovation Fund application?

This year, there was a hydrogen auction for the EU Innovation Fund with an application deadline of February 8. The application deadline for the classic call for proposals was April 9 for all subject areas and project sizes. There will also be another call for projects in the EU Innovation Fund next year.

Do you have a project idea? Contact us now, we will be happy to advise you on the conception of your project and take care of the application design for you.

 

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How long does the application process for the Innovation Fund take?

According to the EU, the results of the evaluation of the calls with a submission deadline in spring 2024 will be communicated in the fourth quarter of 2024. If applications are successful, the funding agreements will then be signed in the first quarter of 2025. 

Projects must be financially closed within four years after the signature of the financing agreements and must be operated for at least five years after commissioning. By way of derogation, a minimum operating period of three years applies to small-scale and pilot projects. 

For pilot projects and projects in the area of cleantech manufacturing, it is recommended that these are financially completed two years after the funding agreement is signed and go into operation within four years of the agreement. 

Funding is paid out flexibly according to milestones, depending on project requirements. In the case of regular funding agreements, up to 40% of the funding can be paid out based on previously defined milestones before the project is fully up and running. The remaining minimum 60% of the grant is then paid out during the set-up and operating phase. 

For projects in the auction process, payments are only made during the operating or reporting period of the respective project.innovation-fund-application-process

 

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Advice on the Innovation Fund

At EurA AG, we have been assisting companies with their applications to the Innovation Fund since the first call for proposals in 2020. Over the past few years, we have gained extensive experience with the funding programme and have the necessary expertise. From project design, technical advice and financial planning to life cycle analysis, we can provide you with all the necessary components of your Innovation Fund application from a single source. 

Do you have a project idea? Get in touch with us today! 

Although the next deadline for applications is not expected to be until spring 2025, it is advisable to contact us as soon as possible and start planning your project. At 200 to 300 pages, the length of an application should not be underestimated. The more time you have to prepare your application, the better your chances of receiving funding from the Innovation Fund. 

 

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Further Informationen

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    Innovation Fund Blog Series

    Also discover our blog series on the Innovation Fund.

    Go to the blog
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    Innovation Fund: financial planning and determination of relevant costs

    +++ Innovation Fund blog series (part 6) +++ A key component of financial planning in the Innovation Fund is determining the so-called relevant...

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    EU Innovation Fund: Calculation of greenhouse gas savings

    +++ Innovation Fund blog series (part 5) +++ Calculating greenhouse gas savings is a core topic of the Innovation Fund. This is because the EU...

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    Requirements for the Innovation Fund: feasibility study and business plan

    +++ Innovation Fund blog series (part 4) +++ The attractive funding conditions are associated with very demanding project selection criteria. In...

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    The centrepiece of an Innovation Fund application: part B

    +++ Innovation Fund blog series (part 3) +++ An Innovation Fund application is one of the most complex funding applications in the European Union. It...

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    EU Innovation Fund: Overview of the Funding Programme

    +++ Innovation Fund blog series (part 2) +++ With the Innovation Fund, the EU aims to invest in new technologies that significantly push forward the...

    featured image

    Innovation Fund: EU-wide auction for renewable hydrogen production

    +++ Innovation Fund blog series (part 1) +++ Hydrogen plays a key role in achieving Europe's planned climate targets. However, in order to maximise...

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