Innovation Fund – IF25 Net-Zero technologies

European Commission has launched new calls for proposals under the Innovation Fund, with a total of EUR 2.9 billion available. The EU Innovation Fund is one of the largest funding programs for the deployment of net-zero and innovative technologies. It is designed to provide non-refundable financial support to projects introducing highly innovative technologies, processes, or products that have significant potential to reduce GHG emissions.

We invite you to seize this exceptional opportunity to submit projects that enhance the sustainable development of your company while protecting the environment. The Innovation Fund provides not only financial support but also the chance to collaborate in developing forward-thinking technological solutions. We encourage you to cooperate with KPMG to examine the full terms of the call and submit your applications. It is an excellent opportunity to strengthen your company's market position while contributing to the industry's green transformation.

The Innovation Fund offers substantial opportunities for developing innovative net-zero technologies across various industry sectors, including combustion of fuels, refining of oil, production of metals, cement, glass, ceramics, paper, ammonia, and hydrogen, as well as aviation and maritime transport technologies. A special emphasis is placed on projects that focus on utilizing waste heat, electrifying industrial processes, and improving energy efficiency.

Moreover, the Innovation Fund supports the construction and launch of production plants for components related to renewable energy sources, such as solar and wind energy, electrolysers, and fuel cells, as well as energy storage and heat pump solutions. The supported projects must aim to enhance product innovation and production processes, incorporating the use of recycled materials, process automation and digitization, and emission reductions, among other advancements. Pilot projects are also eligible for support.

To become eligible for support under the Commission’s Innovation Fund (IF25), the projects must meet the specified capital expenditure threshold. The minimum value thereof is EUR 2.5 million. Two separate support pathways have been established for projects with capital expenditure above EUR 20 million and above EUR 100 million.

Applicants must be legal entities, and projects must be conducted within EU Member States or EEA countries.

Up to 60% of the relevant costs will be supported.
 

There are five calls for proposals available, including:
 

General topic: 3 calls (large, medium, and small projects)
 

Among the available calls, three will support innovation in Net Zero technologies and processes in industries such as:

• combustion of fuels in installations,
• refining of oil,
• metal ore roasting or sintering,
• production of iron or steel,
• production or processing of ferrous metals,
• production or processing of non-ferrous metals,
• production of aluminium,
• production of cement clinker,
• production of lime,
• manufacture of glass,
• manufacture of ceramic products by firing,
• production of paper or cardboard,
• production of ammonia,
• production of hydrogen and synthesis gas,
• aviation,
• maritime transport.

A special emphasis is placed on projects that focus on utilizing waste heat, as well as improving electrification of industrial processes, and energy efficiency. The supported activities also encompass environmentally safe carbon capture and utilization (CCU), which significantly mitigates climate change, along with the development of products that serve as alternatives to carbon-intensive products in the sectors mentioned. Additionally, support is available for activities related to the development and deployment of projects focused on environmentally safe CO2 capture and geological storage (CCS), as well as for initiatives aimed at developing and operating innovative renewable energy sources and energy storage technologies.
 

Construction and launch of production plants for components
 

The call will support activities aimed at the construction and launch of component manufacturing plants in the following areas:

• Renewable Energy: facilities producing components for solar photovoltaics, concentrated solar power, onshore and offshore wind power, ocean energy, geothermal energy, solar thermal energy, and other renewable energy systems, including their integration with the electricity and heat grid.
• Electrolysers and Fuel Cells: production of electrolysers and fuel cells for hydrogen production and consumption.
• Energy Storage Solutions: production of batteries and other storage solutions for both stationary and mobile applications, covering intra-day and long-term storage.
• Heat Pumps: development and production of heat pumps. Components covered also encompass final equipment such as wind turbines, solar panels, batteries, heat pumps, and electrolysers.

Supported projects must demonstrate innovation in terms of:

• Products: by achieving lower costs at full maturity, higher performance, increased energy efficiency, better system integration, enhanced durability, flexibility, reliability, and/or convenience compared to state-of-the-art products.
• Production Processes: for example, through increased use of recycled materials, more efficient use of critical materials, reduced environmental impact and carbon emissions, enhanced automation, and the integration of digital technologies.
   

Pilot Projects:
 

The call will support pilot projects focused on the validation, testing, and optimization of highly innovative clean energy solutions in areas such as:

• combustion of fuels in installations • refining of oil • metal ore roasting or sintering • production of iron or steel • production or processing of ferrous metals • production or processing of non-ferrous metals • production of aluminium • production of cement clinker • production of lime • manufacture of glass • manufacture of ceramic products by firing • production of paper or cardboard • production of ammonia • production of hydrogen and synthesis gas • aviation • maritime transport including environmentally safe carbon capture and utilization (CCU), which mitigates climate change, along with the development of products that serve as alternatives to carbon-intensive products in the sectors mentioned.

Additionally, support will be provided for:

• Construction and operation of innovative energy storage systems.
• Development of CO2 storage solutions.
• Installation of renewable energy systems, including photovoltaics, concentrated solar power, onshore and offshore wind power, ocean energy, geothermal, solar thermal, and other renewable energy technologies, including innovative power and heat systems.

The call lasts from 4 December 2025 to 23 April 2026, 5 PM, which gives the applicants over four months to prepare their applications.

Simultaneously, the European Commission has launched 2 auctions to support projects related to:

• production of renewable fuels of non-biological origin (RFNBO) hydrogen or electrolytic low-carbon hydrogen, under which EUR 1.3 billion will be available and
• electrified and direct-renewable heat production, under which EUR 1 billion will be available.

Projects selected under auctions will receive support in the form of a fixed premium payment upon verified and certified production of hydrogen for a maximum period of 10 years and verified decarbonised heat production for a maximum period of 5 years.

Deadline for submitting applications for auctions is sooner: 19 February 2026!

Key differences between Innovation Fund 2024 and 2025

Our KPMG Team remains at your disposal for any further information you might require.