The European Commission announced today that it has selected 85 decarbonization technology-focused projects to receive €4.8 billion in grants utilizing funds raised through its EU Emissions Trading System (EU ETS).

Established in 2005, the European Emission Trading System puts a price on carbon emissions for key GHG intensive sectors, including electricity and heat generation, oil refineries, steel, cement, paper, chemicals, and commercial aviation, among others. In 2023, EU lawmakers agreed to increase the EU ETS’ scope, raising the direct emissions reductions required by covered sectors, and expanding the system to new sectors. The EU ETS is now expected to generate revenues of approximately €40 billion from 2020-2030.

Funded by the EU ETS, the Innovation Fund is one of the world’s largest funding programmes for the deployment of net zero technologies, and one of the key tools behind the European Green Deal Industrial Plan, aimed at enhancing the competitiveness of the Europe’s net zero industries, and supporting the EU’s transition to climate neutrality. The fund is aimed at creating financial incentives for companies and public authorities to invest in advanced net zero and low carbon technologies.

The announcement marks the fourth, and largest, wave of grants by the fund, bringing total awards to date to €12 billion. The current round is the first to include projects of different scales, ranging from large and medium to small and pilots, and to include a focus on cleantech manufacturing, supporting projects to develop, build and operate manufacturing plants for key components in wind and solar energy, heat pumps, and components for electrolysers, fuel cells, energy storage technologies and the batteries value chain.

Additional categories covered by the grants include projects aimed at supporting technologies to cut net greenhouse gas emissions in energy-intensive industries; industrial carbon management, with selected projects anticipated to contribute 13% of the Net-Zero Industry Act target of storing at least 50 million tonnes of CO2 from hard-to-abate industries; renewable hydrogen, with selected projects expected to deliver 61 kilotonnes of RFNBO (renewable fuel of non-biological origin) annually, and; net zero mobility, aimed at cutting emissions in the mobility sector, with a particular focus on the maritime sector.

The Commission said that it will issue the next call for proposals for the innovation fund in December 2024.

Wopke Hoekstra, Commissioner For Climate Action and responsible for transport, said:

“The Innovation Fund is funding more projects than ever before. 85 innovative projects in 18 countries bring cutting-edge clean technologies at the service of climate action. New projects in the maritime, aviation and road transport sectors will boost efforts to reach clean mobility. The Fund is once again demonstrating how the EU ETS is a great tool in reducing emissions, and funding the projects we need to build a climate-neutral and competitive Europe.”