European Commission Launches Innovation Fund Call for Proposals to Support Innovative Clean Energy Projects

On July 3, 2020, the new Innovation Fund managed by the European Commission launched the first call for large-scale and clean energy projects.

The Innovation Fund is provided for by the Commission Delegated Regulation (EU) 2019/856, supplementing Directive 2003/87/EC. As the successor of the NER300 programme, the Fund is financed by revenues from the auctioning of allowances under the EU Emissions Trading System and may amount to about €10 billion depending on the carbon price.

The Fund will finance a wide range of innovative technologies in the sectors of energy-intensive industries, renewable energy, energy storage, carbon capture and utilization, and carbon capture and storage. It will also support projects on innovative low-carbon solutions that lead to emissions reductions across multiple sectors, for example, through industrial symbiosis.

For large-scale projects—with capital expenditures above €7.5 million and that are sufficiently mature in terms of planning, business model, and financial legal structure—there is a two-stage application process: first, the submission of an expression of interest, which allows for an assessment of the project effectiveness, innovation, and maturity level, followed by the submission of the full application for an assessment of the scalability and cost efficiency of the project.

While primarily focused on large-scale projects, the Fund may also be open to small-scale projects in the future, using a simplified application procedure. The details of such simplified procedure are expected to be issued at a later stage, as the current call is only open to large-scale projects.

The Fund will support up to 60% of the additional capital and operational costs linked to innovation. The grants will be disbursed in a flexible way based on project financing needs, taking into account the milestones achieved during the project lifetime. Up to 40% of the grants can be given based on predefined milestones before the whole project is fully up and running. The grant is not considered to be State aid and can be combined with public support by a Member State or with funding from other support programs.

For the current call, eligible candidates are public or private entities, international organizations, or any consortium from one of the EU Member States, Norway, or Iceland. The call is open on the EU Funding and Tenders portal until October 29, 2020, and provides for a budget of €1 billion for grants and €8 million for project development assistance.

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