IN LONDON: The Innovation Fund 2025 auctions for industrial heat decarbonisation and hydrogen production attracting a combined 143 bids amounting to €9.8 billion ($16.25 billion) in funding.
The European Climate, Infrastructure and Environment Executive Agency (CINEA) plans to release the first evaluation results between May and June 2026. Applicants will be invited to prepare and sign corresponding grant agreements, with final awards expected by Q4 2026.
The European Commission says the high number of bids reflects the keen interest of industries across Europe to decarbonise industrial heat processes and produce hydrogen sustainably.
Separately, the pilot auction on industrial heat attracted 85 bids from a variety of European industries across 14 countries, amounting to €1.4 billion in funding requested. The aim of the auction is to expedite the market uptake of electrified heat solutions and heat produced directly from renewable sources.
Industrial process heat is one of Europe’s largest sources of industrial CO2 emissions due to the continued use of fossil fuels, as reported by the European Commission.
Over five years of operation, the European Commission estimates that the submitted project proposals could deliver substantial greenhouse gas emissions reductions, avoiding up to 3.78 million tonnes of CO2-equivalent emissions and producing around 19.4 terawatt-hours of thermal energy.
Selected heat projects will be required to reach financial close within two years of grant signature and to start operations within four years.
Hydrogen auction
Meanwhile for hydrogen production, 58 bids were brought in from European hydrogen producers from 11 countries, seeking €8.4 billion in funding. The auction aims to provide fixed-premium payments to projects, helping bridge the gap between domestic production costs and the current market price.
The European Commission says increasing hydrogen production is key to securing Europe’s energy security and climate neutrality goals by reducing reliance on fossil fuels. Hydrogen can be used to replace fossil fuels in hard-to-decarbonise industries and transport sectors.
Bids submitted under the auction could result in the installation of a total electrolyser capacity of 4.3 gigawatts electrical. The projects selected for grants will receive support in the form of a fixed premium payment upon verified and certified production of hydrogen for a ten-year period.
Selected hydrogen projects are required to reach financial close within two and a half years of grant signature and start producing clean hydrogen within five years.
Funded from the EU Emissions Trading System Revenues, the winning bids will help deliver the Clean Industrial Deal, as well as boost competitiveness and resilience of European industry.
A total of €2.3 billion of funding will be awarded, with an additional €1.3 billion from German national funds and €490 million from Spain via the ‘auction-as-a-service’ platform.
The Clean Industrial Deal presents measures to boost every stage of production, focusing on energy-intensive industries such as steel, metals and chemicals, as well as the clean technology sector. It will mobilise over €100 billion to support EU-made clean manufacturing.
To date, the European Commission has launched a dedicated call under Horizon Europe worth €450 million to stimulate research and innovation, adopt a new Clean Industrial Deal state aid framework, and amend the Invest EU Regulation to increase the amount of financial guarantees to support investments.
Write to Aaliyah Rogan at Mining.com.au
Images: The European Commission
