REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Innovation Fund in 2022
Date: 2023-11-24
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Emissions Trading Scheme, EU emission allowance, EU environmental policy, auction sale, carbon neutrality, clean technology, fund (EU), greenhouse gas, innovation, tradeable emission permit

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.11.2023  COM(2023) 732 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Innovation Fund in 2022  
 
 
CONTENTS 
INTRODUCTION ........................................................................................................................................ 2 

INNOVATION FUND KEY MILESTONES IN 2022 ......................................................................................... 8 

SECOND CALL FOR LARGE-SCALE PROJECTS (LSC-2021) .......................................................................... 10 

1 

2 

3 

3.1 

3.2 

3.3 

Project participation in the call .......................................................................................................... 10 

Call budget and financial support requested .................................................................................... 11 

Characteristics of the awarded projects ............................................................................................ 11 

3.3.1 

Sectors............................................................................................................................................. 11 

3.3.2  Geographical distribution ............................................................................................................... 12 

3.3.3  GHG-reduction potential ................................................................................................................. 13 

3.3.4 

Level of maturity ............................................................................................................................. 13 

3.3.5 

Level of innovation and potential for scalability ............................................................................. 14 

4 

SECOND CALL FOR SMALL-SCALE PROJECTS (SSC-2021) .......................................................................... 15 

4.1 

4.2 

Call budget and financial support requested .................................................................................... 15 

Characteristics of the awarded projects ............................................................................................ 16 

4.2.1 

Sectors............................................................................................................................................. 16 

4.2.2  Geographical distribution ............................................................................................................... 17 

4.2.3  GHG-reduction potential ................................................................................................................. 17 

4.2.4 

Level of maturity ............................................................................................................................. 18 

4.2.5 

Level of innovation and potential for scalability ............................................................................. 18 

5 

CUMULATIVE RESULTS OF THE INNOVATION FUND BY THE END OF 2022 .............................................. 19 

5.1 

5.2 

5.3 

Project participation in the call .......................................................................................................... 19 

Call budget and financial support requested .................................................................................... 21 

Characteristics of the awarded projects ............................................................................................ 22 

5.3.1 

Categories and sectors .................................................................................................................... 22 

5.3.2  Geographical distribution ............................................................................................................... 24 

5.3.3 

Potential for reducing GHG emissions ............................................................................................ 26 

5.3.4 

Level of maturity ............................................................................................................................. 27 

5.4 

5.5 

Innovative technologies supported ................................................................................................... 28 

Contribution to other EU policy objectives ....................................................................................... 29 

5.5.1 

Synergies with other funding instruments ...................................................................................... 30 

5.5.2 

Knowledge sharing on clean-tech solutions .................................................................................... 31 

PROJECT DEVELOPMENT ASSISTANCE FOR LESS MATURE PROJECTS ...................................................... 32 

CONCLUSIONS AND NEXT STEPS ............................................................................................................ 33 

6 

7 

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1 

INTRODUCTION 

1.1 Context and objectives of the Innovation Fund 

The Innovation Fund is one of the world’s largest funding programmes for the demonstration 
of  innovative  low-carbon  technologies.  It  is  funded  by  the  European  Union’s  Emissions 
Trading System and supports the European Union’s objective to reach climate neutrality by 
2050. 

The  European  Union  (EU)  is  committed  to  reducing  greenhouse  gas  (GHG)  emissions  and 
mitigating the effects of climate change. In 2021, the European Climate Law1 was approved as 
one of the core initiatives for the delivery of the European Green Deal, setting ambitious targets 
for 2030 in areas such as reductions in GHG emissions, the deployment of renewable energy 
technologies, and energy efficiency. The Regulation aims to achieve climate neutrality by 2050 
in the EU. This aim will require considerable efforts, including regulatory and public sector 
support, to promote innovation and hasten the path to market of zero-carbon and low-carbon 
solutions.  

The European Union Emissions Trading System (EU ETS) is a cornerstone of the EU’s policy 
to combat climate change and is a key tool for reducing GHG emissions in a cost-effective 
manner. Established in 20052, it is the world’s first  – and now the world’s largest – carbon 
market, covering around 40% of the EU’s GHG emissions. In 2018, the revised ETS Directive 
created  the  Innovation  Fund  (IF)  using  revenues  from  auctioning  450  million  emission 
allowances  to  support  innovation  in  low-carbon  technologies  and  processes  in  the  sectors 
covered  by  the  EU  ETS.  In  2019,  with  the  adoption  of  its  Delegated  Regulation3,  the  IF 
officially  started  its  activities  to  provide  grants  and  contributions  to  blending  operations  to 
support the relevant costs of eligible projects. 

The  IF  is  now  one  of  the  world’s  largest  funding  programmes  for  the  commercial 
demonstration  of  innovative  zero-carbon  and  low-carbon  technologies  aimed  at  bringing  to 
market  industrial  solutions  to  decarbonise  Europe  and  support  its  transition  to  climate 
neutrality. The IF provides funding in five key areas:  (i) energy intensive industries (EII), (ii) 
renewable-energy technologies, (iii) carbon capture and geological storage (CCS), (iv) energy 
storage, and (v) net-zero mobility and buildings. 

1 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the 
framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 
(‘European Climate Law’), available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32021R1119.   

2 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme 
for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, 
available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32003L0087.  

3 Commission Delegated Regulation (EU) 2019/856 of 26 February 2019 supplementing Directive 2003/87/EC of 
the European Parliament and of the Council with regard to the operation of the Innovation Fund, available at: 
https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32019R0856.  

2 

 
 
 
 
 
 
 
 
In July 2021, the European Commission adopted a revision of the EU ETS Directive4 as part 
of the ‘Fit-for-55’ package of legislative measures to implement the EU’s increased climate 
ambition  for  2030.  The  package  of  measures  included  an  amendment  to  the  provisions 
governing the IF and it had three main aspects set out in the bullet points below. 

i) 

ii) 

iii) 

More ETS allowances allocated to the IF: an increase from 450 million to about 530 
million. This means that the IF will make available an estimated EUR 40 billion for 
investment between 2020 and 20305. 

An expanded scope for funding both in terms of sectors (which now also include 
maritime,  aviation,  buildings,  and  road  transport)  and  in  terms  of  the  level  of 
innovation, with technologies at greater levels of maturity now eligible. 

A  new  support  mechanism,  through  which  projects  are  selected  on  the  basis 
of  a  competitive  bidding  procedure  (i.e.  auction).  This  makes  it  possible  to 
implement  supporting  schemes  such  as  fixed  premium  contracts,  contracts  for 
difference or carbon contracts for difference, covering up to 100% of their relevant 
costs. 

Figure 1: Key aspects of the Innovation Fund after the EU ETS revision 

The Commission is working on amending the IF’s legal framework6 to ensure that it: (i) is fully 
aligned with the most recent amendments of the ETS Directive; and (ii) draws on the lessons 
learnt from the first years of implementation. A final version of the Delegated Regulation is 
planned for adoption by the end of 2023. 

4 COM(2021) 551. 

5 Calculated based on an estimated carbon price of EUR 75 per tonne, subject to fluctuations in the market. 

6 Commission Delegated Regulation (EU) 2019/856. 

3 

 
 
 
 
 
 
 
According  to  the  EU  ETS  Directive7,  by  31  December  2023  and  every  year  thereafter,  the 
Commission shall report on the implementation of the IF to the Climate Change Committee. 

1.2 Overview of the operation of the IF 

The IF seeks to support innovative technologies, techniques, and processes that: (i) have the 
potential to substantially reduce GHG emissions in the sectors covered by the EU ETS; (ii) 
have  wide  market  replication  potential;  and  (iii)  are  cost-efficient.  The  IF  supports  the 
funding gap through: (i) grants awarded through calls for proposals or auctions; (ii) other 
financial structuring, such as contributions to blending operations; and (iii) technical and 
financial advisory support through the project development assistance programme.  

The  IF is  designed to  provide financial support to  projects  demonstrating highly innovative 
technologies, processes, or products that have significant potential to reduce GHG emissions. 
This support is provided mainly in the form of grants, although it can also take other forms, 
such as contributions to blended operations under other EU investment support instruments or 
advisory support through the project development assistance (PDA) programme, instruments 
defined in the Delegated Act of the Innovation Fund. The grants provided by the IF can cover 
a maximum of 60% of the relevant costs8 of a project if awarded through a regular call for 
proposals, or up to 100% if awarded through a competitive bidding mechanism. This design 
ensures both cost-efficient allocation of the support and the mobilisation of private investment. 

By  the  end  of  the  reporting  period  for  this  report,  which  covers  the  year  2022,  the  main 
awarding  mechanism  used  by  the  IF  was  through  open  calls  for  proposals.  These  calls  for 
proposals were launched separately for two categories of projects: one with estimated capital 
expenditures below EUR 7.5 million (small-scale projects) and another with estimated capital 
expenditures greater than EUR  7.5 million (large-scale projects). Regardless of whether the 
projects are large-scale or small-scale, funding is awarded without any discrimination as to the 
type  of  technology  being  proposed  in  the  project,  provided  that  the  project  is  in  one  of  the 
sectors eligible for the IF.  

The proposals are evaluated against five criteria: (i) GHG emissions avoidance, (ii) degree of 
innovation; (iii) maturity at technical, financial, and operational level; (iv) scalability potential; 
and (v) cost efficiency in the avoidance of GHG emissions. The IF supports highly innovative 
projects  that  facilitate  the  comprehensive  transition  to  climate  neutrality  of  industrial 
ecosystems. To be considered for funding, projects must offer more than an incremental degree 
of innovation in comparison to the state-of-the-art in the EU. Typically, the selected projects 
are evaluated as constituting either very strong innovation or breakthrough innovation. These 

7 Article 10a (8) of the Directive 2003/87/EC as amended in 2023. 

8 Relevant costs: the difference between the best estimate of the CAPEX, the net present value of operating 
expenditure and operational benefits arising in the 10 years after the entry into operation of the project compared 
to the result of the same calculation for a conventional production with the same capacity in terms of effective 
production of the respective final product. 

4 

 
 
 
 
 
 
 
 
projects also show high technological maturity and substantial potential for scalability, i.e. they 
will both: (i) enable further GHG reductions by transferring the technology or its application 
to other locations and sectors; and (ii) entail the cooperation of different actors in the regional 
and  European  economy.  The  IF  thus  supports  highly  innovative  projects  that  will  help 
European industrial ecosystems make a comprehensive transition to climate neutrality. 

The IF also provides, through its PDA programme, tailor-made support to promising projects 
that  could  not  be  selected  in  a  call  due  to  insufficient  maturity,  in  the  form  of  grants  and 
technical assistance. The objective of the PDA is to help these unsuccessful projects to increase 
their maturity levels and increase their chances of success at subsequent IF calls. 

The IF is operated through the coordinated work of four main actors. The contribution of each 
of these actors is discussed in the bullet points below. 

•  The European Commission’s Directorate-General for Climate Action (DG CLIMA) has 
overall responsibility for implementing the IF, including the decisions on the amount 
of  financial  assistance,  policy  priorities,  and  essential  elements  of  every  call  for 
proposals. DG CLIMA also has overall responsibility for adopting the award decisions. 

•  The European Climate Infrastructure and Environment Executive Agency (CINEA) is 
responsible  for:  (i)  launching  the  calls  for  proposals;  (ii)  evaluating  the  calls;  (iii) 
preparing and formalising the grant agreements; and (iv) carrying out the monitoring, 
supervision, and payments during the implementation of the projects. 

•  The  European  Investment  Bank  (EIB)  is  responsible  for  providing  PDA  to  selected 

projects. 

•  EU  Member  States  play  an  essential  role  in  contacting  potential  applicants  on  their 
territory  and  supporting  them  in  both  applying  for  projects  (e.g.  through  support 
schemes  at  Member-State  level)  and  implementing  them  (e.g.  through  facilitating 
permitting). Member States are consulted by the European Commission on both: (i) the 
financing decisions that determine the periodic calls for proposals of the IF; and (ii) the 
list of projects selected for award. 

1.3 Contribution of the IF to EU policy objectives 

The IF, through its objective of supporting the deployment of European net-zero and innovative 
technologies, contributes to several specific policy objectives under the European Green Deal. 
The bullet points below set out the seven main objectives to which the IF contributes. 

• 

It contributes to the targets of the EU Climate Law9 to achieve a 55% reduction in GHG 
emissions by 2030.  

9 Reg 2021/1110. 

5 

 
 
 
 
 
 
 
• 

• 

• 

• 

• 

It contributes to the objective of developing the use of renewable hydrogen in Europe, 
as  set  out  in  several  initiatives,  such  as:  (i)  the  REPowerEU10  initiative  to  make  10 
million tonnes of renewable hydrogen available in Europe from domestic production 
and another 10 million tonnes from international imports by 2030; (ii) the objective of 
the European hydrogen strategy11 to ensure that 40 GW of electrolysers producing 40 
million tonnes of hydrogen are installed in Europe by 2050; and (iii) the objective in 
the Renewable Energy Directive12 to ensure that 42% of hydrogen used in industry is 
renewable by 2030, reaching 60% by 2035.  

It contributes to the EU’s objectives for developing alternative fuels, such as those set 
down in REfuelEU Aviation13 to make 2% of the fuel made available at EU airports 
sustainable aviation fuel by 2025 (and 6% in 2030, 20% in 2035 and 70% in 2050). It 
also  contributes  to  the  biomethane  action  plan’s  objective  of  reaching  domestic 
production (i.e. production within the EU) of 35 bcms of biomethane by 2030.  

It contributes to the objectives in the Renewable Energy Directive14 and REPowerEU 
of rolling out renewable energy generation and reaching a share of 45% renewables in 
the energy mix by 2030 (through goals such as doubling the generation of solar power 
by 2025, installing 600GW of solar power by 2030, doubling the rate of deployment of 
heat-pumps, and promoting the integration of district heating systems with geothermal 
and solar energy sources). It also contributes to the objectives of the offshore energy 
strategy15 which aims to have installed 300 GW of offshore wind generation and 40 GW 
of ocean-based generation by 2050.  

It  contributes  to  the  objectives  of  the  Batteries  Regulation16  to  strengthen  the 
functioning  of  the  EU’s  internal  battery  market  (including  in  products  themselves, 
production and disposal processes, waste batteries, and recycled materials), to promote 
a circular economy. It also contributes to the Batteries Regulation’s objective to reduce 
environmental and social impacts throughout all stages of the battery life cycle.  

It contributes to the overall objectives of the Net Zero Industry Act (NZIA) 17, aiming 
at innovating and scaling up manufacturing capacity for net-zero technologies so that 
EU  companies  are  able  to  provide  at  least  40%  of  EU  deployment  needs  for  these 
technologies by 2030. It also contributes to the objective of reaching 50 Mt/y of CO₂ 
storage capacity by 2030.  

10 Reg 2023/435. 

11 COM 2020/301. 

12 COM 2021/148. 

13 COM (2021)561. 

14 2018/2001/EU. 

15 COM 2020/741. 

16 COM 2020/798. 

17 COM(2023) 161. 

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•  From 2023, the IF will also actively contribute to the European Strategic Technologies 
for Europe Platform  (STEP)18, which has the objective of enforcing  and making the 
most  of  existing  EU  funding  instruments  to  quickly  deploy  financial  support  to  the 
benefit of business investments in strategic technologies. The Commission proposes19 
to reinforce the IF with  EUR 5 billion from the STEP programme, earmarked to benefit 
projects  located  in  Member  States  with  GDP  per  capita  below  the  EU  average.  The 
platform also adds a ‘Sovereignty Seal’ to projects during their selection process, which 
is a new label intended to help project promoters attract public and private investments 
by certifying a project’s contribution to the STEP objectives, regardless of whether the 
project has been able to receive EU funding. 

The  awarded  projects  will  also  bring  social  and  economic  benefits,  such  as  the  creation  of 
quality  jobs  in  the  green  transition,  support  for  local  economies,  and  cooperation  between 
different industries to foster innovation and sustainability. Support for domestic manufacturing 
capabilities in new technologies, such as electrolysers and batteries, will strengthen Europe’s 
industrial  base  and  create  economies  of  scale  that  will  make  these  technologies  more 
competitive  at  international  level.  Furthermore,  the  IF  can  also  help  address  the  social  and 
labour-market aspects of the fair green transition by supporting the reconversion of industrial 
activities  into  low  carbon  options  and  incorporating  existing  expertise  in  the  new  green 
economy. 

1.4 Synergies with other EU funding instruments 

The  IF  aims  to  ensure  synergies  and  complementarities  with  other  investment-support 
instruments, such as: (i) InvestEU; (ii) the lending programmes of the EIB; and (iii) other EU 
funding  programmes,  such  as  Horizon  Europe  or  the  Connecting  Europe  Facility.  Further 
details  on  the  synergies  and  complementarities  that  have  been  achieved  so  far  with  these 
instruments can be found in Section 5.5.1 of this report.  

1.5 Knowledge sharing on clean-tech solutions 

Knowledge sharing is an essential part of the IF because it supports the replication and faster 
market penetration of technologies or solutions supported by the IF. 

The Delegated Regulation on the IF requires all proposals applying for IF support to include a 
knowledge-sharing plan to ensure that they: (i) actively disseminate the acquired knowledge; 
(ii) help encourage scaling up to commercial readiness; and (iii) accelerate the deployment and 
commercialisation of the proposed technologies. Projects receiving support from the IF should 
make information about the design and implementation of the projects available to the public 
on  their  websites,  also  acknowledging  the  EU  funds  the  project  has  received.  It  is  also  of 
particular  importance  that  the  projects  gather  lessons  learnt  in  the  projects  on  challenges 
encountered in reaching financial close20 and entry into operation. This information is expected 

18 COM(2023) 335. 

19 COM(2023) 335 final. 

20 The moment in the project development cycle where all the project and financing agreements have been 
signed and all the required conditions contained in them have been met. 

7 

 
 
 
 
 
 
to  help  the market  penetration of the demonstrated technologies and  reduce  the risks  in  the 
transition to the large-scale production and use of low-carbon products.  

The information collated from the projects is used by the Commission as to inform subsequent 
policymaking.  This  information  is  also  used  to  support  other  IF  projects,  industrial 
stakeholders, and future applicants. CINEA and the knowledge-sharing framework ensures that 
commercially  sensitive  information  will  remain  confidential.  The  activities  within  the 
knowledge-sharing framework include: (i) closed-door events between IF projects; (ii) open 
door  events  to  share  knowledge,  strengthen  synergies  with  other  EU  funded  projects  and 
Member States, and help disseminate the generated knowledge; and (iii) information on the IF 
project portfolio. Further details on the work carried out so far in knowledge sharing can be 
found in Section 5.1.2 of this report.  

1.6 Purpose of this report 

This report gives an account of the status of implementation of the IF at 31 December 2022, 
presenting: (i) the results from the calls for proposals and PDA implemented during 2022; 
(ii) the cumulated results of the IF; and (iii) conclusions and expected next steps. 

According  to  the  EU  ETS  Directive21,  by  31 December 2023  and  every  year  thereafter,  the 
Commission has to report on the implementation of the IF to the Climate Change Committee. 
This report should provide an analysis of projects that have been awarded funding, by sector 
and by Member State, and the expected contribution of those projects to the objective of climate 
neutrality by 2050 in the EU. 

The purpose of this specific report is to fulfil this requirement and report on the implementation 
of the IF up until 31 December 2022. It includes the following information: 

(i)  a general overview of the most relevant milestones achieved in the implementation of 

the IF during 2022; 

(ii) implementation and results of the IF calls for proposals carried out during 2022; 

(iii) cumulated results of the IF from its beginning until the end of 2022; 

(iv)  the status of implementation of the PDA up until the end of 2022; 

(v) on overview of key next steps planned for 2023. 

2 

INNOVATION FUND KEY MILESTONES IN 2022  

The six key milestones achieved by the IF in 2022 are set out in the paragraphs below. 

21 Article 10a (8) of the Directive 2003/87/EC as amended in 2023. 

8 

 
 
 
 
 
 
 
 
 
 
1.  Award of grants in the second call for large-scale projects (LSC-2021). The call 
had a total budget of EUR 1.5 billion for projects with an estimated capital expenditure 
above EUR 7.5 million per project. The call was launched on 26 October 2021, and the 
grants were awarded on 11 July 2022. 

2.  Launch and award of second call for small-scale projects (SCC-2021). The call had 
a budget of EUR 100 million for projects with an estimated capital expenditure below 
EUR 7.5 million per project. It was launched on 31 March 2022 and the grants were 
awarded on 12 December 2022. 

3.  Launch of the third call for large-scale projects (LSC-2022). The call had a budget 
of  EUR  3  billion  for  projects  with  an  estimated  capital  expenditure  above  EUR 7.5 
million per project. It was launched on 3 November 2022. The results of the call were 
published on 13 July 202322. As a result, 41 projects were selected for grant-agreement 
preparation. 

4.  Implementation of communication and engagement activities around each call for 
proposals. For each call, the Commission and CINEA organised dedicated webinars23 
and information days during which: (i) the call texts were explained in detail to potential 
applicants;  (ii)  the  questions  of  potential  applicants  were  answered;  and  (iii)  further 
application  guidance  material  was  shared  with  potential  applicants.  In  parallel,  a 
dedicated helpdesk  telephone  line was  activated, which during 2022 answered  more 
than 1 100 questions (778 for the large-scale call and 334 for the small-scale call). 

5.  Implementation of the first PDA and selection of additional potential beneficiaries. 
By the end of 2022, a total of 40 projects from the large-scale calls were offered support 
under the PDA programme. By that date, the EIB had completed the implementation of 
the PDA for 19 projects, while 3 projects were still receiving the PDA, and 15 projects 
were in negotiations to receive it. Three projects had declined the PDA. 

6.  Start of the development of competitive bidding mechanisms under the IF. 2022 
also marked the start of preparations for the new competitive bidding procedure (i.e. 
auctions) under the IF. Studies were conducted on the possible economic design and 
pricing mechanisms of the competitive bidding procedure. The first pilot auction will 
be launched in 2023, and corresponding information will be included in the IF’s annual 
report for 2023. The competitive bidding procedure will also include an ‘auction-as-a-
service’ mechanism, which will enable countries in the EEA to use their national budget 
resources to award support to projects located on their territory while relying on an EU-
wide auction mechanism to identify the most competitive projects. 

22 See: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3787  

23 Large-scale projects (europa.eu) and Small-scale projects (europa.eu) under Webinars 

9 

 
 
 
 
 
 
 
 
 
3  SECOND CALL FOR LARGE-SCALE PROJECTS (LSC-2021) 

The LSC-2021 targeted projects with capital expenditures of more than EUR 7.5 million per 
project. It selected 16 projects requesting a total of EUR 1.78 billion (an average grant of 
EUR 111 million per project). The call attracted many excellent projects, and LSC-2021 was 
only able to provide 36% of the total grants requested by projects that met or exceeded the 
evaluation’s threshold requirements for ranking. The most supported sector in LSC-2021 is 
‘cement & lime’, with four projects receiving EUR 653 million in total to implement CCS 
solutions.  Altogether,  the  selected  projects  are  expected  to  support  the  avoidance  of  132 
million tonnes of CO₂e over 10 years. 

3.1  Project participation in the call  

The  LSC-2021  proposals  had  an  original  budget  of  EUR  1.5  billion  and  aimed  to  support 
projects with an estimated capital expenditure greater than EUR 7.5 million per project in any 
sector eligible under the IF. The financing decision preceding the call also set a maximum 20% 
flexibility provision on the total budget if the budget was insufficient for the received proposals 
above the minimum thresholds). The call was launched on 26 October 2021, with a deadline to 
receive  proposals  by  3 March 2022.  The  results  of  the  evaluation  were  announced  on 
11 July 2022. 

The  call  received  139  proposals,  out  of  which  121  (87%)  were  considered  admissible  and 
eligible  for  evaluation  (see  Figure  2).  The  quality  of  the  proposals  was  high,  leading  to  48 
proposals meeting or exceeding the minimum evaluation threshold for award consideration. 
Once  ranked  according  to  their  assessment  score  under  the  applicable  award  criteria,  and 
considering  the  limited  available  budget,  16  projects  were  selected  and  invited  for  grant 
preparation while 5 projects were allocated to the reserve list. 

Figure 2: Evaluation Results for LSC-2021 

Two proposals24 that were selected for grant-agreement preparation did not finalise the process. 
As a result, the first proposal from the reserve list25 was invited to grant negotiation. By the 
end of 2022, 15 projects had signed a grant agreement with CINEA to benefit from the support 

24 Projects: (i) RISE (at the applicant’s request) and (ii) IONFibre (at CINEA’s request since the applicant 
proposed changes that would put in question the result of the evaluation). 

25 EAVORLOOP project. 

10 

 
 
 
 
 
 
 
 
 
 
 
of the IF, while the unfinalised project from the reserve list was still in the process of preparing 
a grant agreement. 

Out  of  all  the  proposals  received  in  LSC-2021,  59  (45%  of  all  proposals  received)  were 
resubmissions  from  the  previous  LSC-2020  call,  including  3  that  had  received  PDA  under 
LSC-2020.  Out  of  the  16  finally  selected  proposals  in  LSC-2021,  9  were  among  these  59 
resubmissions.  This  experience  showed  the  extent  to  which  projects  can  benefit  from 
experience in applying and subsequently improve their competitiveness, especially by tackling 
the shortcomings in the technical, financial and operational maturity of their projects. Also, 
this  experience  illustrates  the  importance  of  having  the  PDA  programme  in  place  to  help 
projects to become more mature. After LSC-2021, out of the 32 projects that were not selected 
due to the limited available budget, 18 projects were invited to receive the PDA provided by 
the EIB. 

3.2  Call budget and financial support requested  
The total grant support requested by all projects that applied for the second LSC (LSC-2021) 
amounted  to  EUR  11.2  billion.  Projects  that  were  assessed  as  meeting  or  exceeding  the 
minimum threshold requirements accounted for a total grant request of EUR 4.97 billion. This 
figure  considerably  exceeded  the  available  budget  of  EUR  1.5  billion.  For  that  reason,  the 
Commission used the 20% flexibility rule to maximise the impact of  this call for proposals. 
The  flexibility  rule,  as  defined  in  each  of  the  IF  financing  decisions,  allows  changes  in  the 
available budget in several situations. One of the situations is when the results of the call for 
proposals  are  such  that  many  projects  are  evaluated  as  meeting  or  exceeding  the  minimum 
threshold requirements, but cannot all be invited to prepare a grant agreement due to the budget 
constraint of the call. As a result, and despite the application of the flexibility rule, the proposals 
invited to prepare grant agreements corresponded to only 36% (EUR 1.78 billion) of the total 
amount requested by proposals that met or exceeded the evaluation threshold requirements. 

The  total  capital  expenditure  of  projects  finally  selected  under  LSC-2021  amounted  to 
EUR 8.47 billion, while the maximum IF grant support to those projects was EUR 1.78 billion. 
That means that the IF  was leveraging other investment worth almost 4 times the IF’s own 
contribution. The average capital expenditure (CAPEX) per project has been EUR 530 million 
and the average grant amount requested was approximately EUR 111 million per project. 

LSC-2021 has revealed an increased interest in the IF by developers with projects seeking more 
than  EUR  7.5  million  per  project.  Therefore,  the  available  budget  for  this  type  of  calls  has 
proven insufficient. After LSC-2021, out of the total EUR 4.97 billion requested by projects 
that  met  or  exceeded  the  minimum  threshold  requirements  for  selection,  projects  worth 
EUR 3.2 billion could not be selected due to insufficient budget. At the same time, LSC-2021 
has shown that the competitive nature of the calls for proposals provides an efficient approach 
to mobilising private funding, with IF grants representing an average of 23% of the projects’ 
capital expenditure. 

3.3  Characteristics of the awarded projects  

3.3.1  Sectors 
The  16  projects  finally  selected  for  grant-agreement  preparation  were  distributed  along  8 
sectors of activity (see Figure 3). The largest number of projects (4 projects or 25% of all the 
projects selected) were in the “cement and lime” sector. These 4 projects benefited from 37% 

11 

 
 
 
 
 
of the total grant support (see Figure 4). The selected projects showed the relevance of the IF 
for supporting large initiatives to decarbonise industrial activities, such as cement production, 
chemical and petrochemical processes, and the use of hydrogen as an alternative clean fuel. 
The  cement  industry  has  been  particularly  competitive,  putting  forward  credible  and  cost-
effective solutions to abate GHG emissions through CCS technologies. 

Figure 3: Number of projects by sector in LSC 2021 

Figure 4: Amount of grants (EUR) for selected projects in LSC 2021 

3.3.2  Geographical distribution 
The  selected  and  awarded  projects  were  distributed  across  nine  Member  States,  as  well  as 
Norway and Iceland. The Member States with the most selected and awarded projects were the 
Netherlands and Germany (3 projects each). The most budget was awarded to projects located 
in the Netherlands, Germany, and Poland, with each country representing around 17% of the 
total budget awarded, or approximately EUR 302 million (see Figures 5 and 6). Projects based 
in western and northern Europe still performed better during evaluation in this large-scale call, 
, with lower eligibility rates in Central and Eastern Europe.   

12 

 
 
 
 
 
 
 
 
Figure 5: Number of projects eligible, above threshold, and selected, by country – LSC 2021 

Figure 6: Amount of selected grants (EUR) by country in LSC-2021 

3.3.3  GHG-reduction potential 
The estimated total absolute avoided GHG emissions from projects selected and awarded in 
LSC-2021 is 132 million tonnes of CO₂e over a period of 10 years, with an average contribution 
per  project  of  8.2  million  tonnes  of  avoided  CO₂e.  The  greatest  contributions  to  this  figure 
come from projects in the cement-and-lime sector (28%), intra-day electricity storage (26%), 
and the chemicals sector (11%). The greatest cost efficiency in the relation between the grant 
amount  and  the  absolute  GHG  emissions  avoided  was  achieved  by  projects  in  intra-day 
electricity storage, with an average of 458 kg of CO₂e avoided per EUR 1 of grant, showing 
the significant impact of these technologies when helping to integrate renewable energies into 
the grid. 

3.3.4  Level of maturity 
All  projects  selected  in  LSC-2021  planned  to  have  achieved  financial  close  by  the  second 
quarter  of  2025  and  have  entered  into  operation  by  the  second  quarter  of  2028,  as  seen  in 
Figures 7 and 8. On average, the time to achieve financial close is 22 months, and the time to 
achieve  entry  into  operation  is  58  months.  Considering  that  the  technical  maturity  of  the 
projects participating in the IF is in general low, requiring on average of almost 5 years to start 
operations  fits  with  the  innovative  nature  of  the  supported  technologies.  One  project, 
NorthStorPlus, already reached financial closure at the end of 2022.  

13 

 
 
 
 
 
 
 
 
Figure 7: Expected financial close date in LSC 2021 

Figure 8: Expected date of entry into operation in LSC 2021 

3.3.5  Level of innovation and potential for scalability  
The degree of innovation in the selected proposals has been very good, with almost all of the 
proposals achieving a score of 4 (out of a total possible of 5) or higher in this criterion during 
their evaluation, with good scores in both the ‘state-of-the-art’ and ‘EU policy contribution’ 
sub-criteria. 

The  IF  aims  to  select  projects  with  technical  and  market  potential  for:  (i)  widespread 
application or replication; or (ii) future cost reduction. Therefore, the evaluation assesses: (i) 
whether the proposals are scalable at the level of the project and the regional economy; (ii) 
whether the proposals are scalable at the level of the sector and economy-wide; and (iii) the 
quality  and  extent  of  the  knowledge-sharing  plan.  On  this  scalability  potential,  all  selected 
proposals from the LSC-2021 achieved scores of between 3.5 out of 5  and 5 out of 5, with 
almost all scoring 4 or above. 

Projects selected for support under LSC-2021 cover many technological innovations that may 
be  crucial  for  decarbonising  the  European  economy  in  the  coming  years.  Examples  of  key 
technologies  include:  (i)  the  expansion  of  offshore  wind-power  coupled  with  electrolysers 
producing hydrogen; (ii) the manufacturing, deployment, and recycling of innovative materials 
(such as high-nickel-content Li-Ion batteries) for electrochemical energy storage in the power 
grids; (iii) the development of new chemical processes for the large-scale recycling of plastic 

14 

 
 
 
 
 
 
 
 
waste streams; or (iv) the incorporation of CCS techniques into cement-producing industrial 
processes. 

4  SECOND CALL FOR SMALL-SCALE PROJECTS (SSC-2021) 

SSC-2021 was targeted at projects with capital expenditure of less than EUR 7.5 million per 
project.  It  selected  17  projects  that  received  a  total  of  EUR  61.8  million  (an  average  of 
EUR 3.6  million  in  grants  per  project).  Although  66  proposals  were  submitted,  only  17 
proposals were assessed as meeting or exceeding the evaluation thresholds. The budget of 
the call was therefore not fully used and the call was therefore undersubscribed by 38%. The 
most supported sector under the call was the ‘glass, ceramics and construction materials’ 
sector,  with  five  projects  receiving  approximately  EUR  19  million  in  total  to  implement 
decarbonisation solutions in their industrial processes, such as electrification of furnaces or 
recirculation of waste-heat. Taken together, the selected projects are expected to help avoid 
1.3 million tonnes of CO₂e over a period of 10 years. 

The SSC-2021, which was the second call for small-scale proposals under the IF, had a budget 
of EUR 100 million and was directed at projects with an estimated capital expenditure below 
EUR 7.5  million  per  project  in  any  sector  covered  by  the  EU  ETS.  It  was  launched  on 
31 March 2022,  with  a  deadline  to  receive  proposals  of  31 August 2022.  The  results  of  the 
evaluation were announced on 12 December 2022. 

66 proposals were submitted, out of which 53 (80%) were considered admissible and eligible 
for  evaluation.  Out  of  those  53,  17  proposals  met  or  exceeded  the  minimum  evaluation 
threshold requirements to be considered for a grant award. Since the available budget exceeded 
the combined requested support of the proposals, all 17 of these proposals were selected for 
grant-agreement preparation (see Figure 9). 

Figure 9: Number of projects participating in SSC-2021 

4.1  Call budget and financial support requested  
The projects applying for SSC-2021 requested a total of EUR 302.8 million. The projects that 
were assessed as  meeting or exceeding  the minimum  threshold requirements  – all of which 
were selected for grant-agreement preparation – represented a total request of EUR 61.8 million 
in  grant  support,  an  average  of  EUR  3.64  million  per  project.  The  capital  expenditure  of 

15 

 
 
 
 
 
 
 
 
 
projects finally awarded under SSC-2021 amounted to EUR 115 million, with an average of 
EUR 6.7 million per project.  

4.2  Characteristics of the awarded projects 

4.2.1  Sectors 
The  17  projects  finally  selected  for  grant-agreement  preparation  were  distributed  across  12 
sectors of activity. Out of the 17 projects, 29% (or 5 projects) were related to ‘glass, ceramics 
and construction material’, and these projects received 31% of the allocated grant budget, as 
seen  in  Figures  10  and  11.  During  this  call,  the  IF  proved  itself  to  be  a  key  instrument  in 
supporting  industrial  decarbonisation  activities  at  small  scale,  by  promoting  remarkably 
competitive  projects  to  improve  furnaces  in  the  glass  industry  with  solutions  such  as 
electrification or recirculation of waste-heat. 

Figure 10: Number of projects by sector in SSC-2021 

Figure 11: Amount of grants by sector in SSC 2021 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
4.2.2  Geographical distribution 
The selected projects were distributed across 12 Member States. The Member State with the 
most selected projects was Spain (3 projects), which also received the most budget allocated at 
17%  of  the  total  (or  EUR  10.7  million).  There  was  one  project  located  in  three  different 
countries  (Czechia,  France,  and  Spain)  targeting  manufacturing  of  renewable-energy 
components. In this small-scale call, almost 53% of the proposals selected were located in the 
south, centre and east of Europe, with only 1 proposal in the north of Europe (Finland). This is 
a different picture to that seen in the large-scale call (where most of the projects were from 
northern and western Europe) thus contributing to a balance in the geographical distribution of 
funding. 

Figure 12: Number of projects by country in SSC-2021 

Figure 13: Amount of grants (EUR) by country in SSC-2021 

4.2.3  GHG-reduction potential 
The estimated total potential for mitigation of GHG emissions from the projects selected and 
awarded in SSC-2021 is 1.3 million tonnes of CO₂e over a period of 10 years, with an average 
contribution  per  project  of  79 121  tonnes  of  CO₂e.  The  greatest  contribution  to  this  figure 
comes from projects in the glass, ceramics and construction material sector (34%) and  from 
the cement and lime sector (30%). The greatest cost efficiency in the relation between the grant 

17 

 
 
 
 
 
 
 
 
 
 
amount and the absolute reduction in GHG emissions was achieved by projects in the cement 
and  lime  sector,  with  an  average  of  92 kg  of  CO₂e  reduced  per  EUR  1  of  grant.  These 
efficiencies were especially seen in the substitution of fossil fuels in cement kilns. 

4.2.4  Level of maturity 
All projects selected under SSC-2021 have plans to achieve financial close by the third quarter 
of 2025 and enter into operation by early 2028. Moreover, 88% will reach financial close by 
the end of 2024 and 76% will start operations by the end of 2025, which is faster than the pace 
of large-scale projects, as smaller projects are easier to implement. 

Figure 14: Planned date for financial close in projects selected under SSC-2021 

Figure 15: Expected date of entry into operation in projects selected under SSC-2021 

4.2.5  Level of innovation and potential for scalability  
The degree of innovation in  the selected proposals  for SSC-2021 has been very good, with 
more than 50% of the proposals achieving a score of 12 (out of a possible 15) or higher in this 
criterion. 

On this scalability potential, more than 70% of the selected proposals from SSC-2021 achieved 
high  scores  of  more  than  12  points  (out  of  15).  This  call  resulted  in  a  variety  of  projects 
supporting  areas  such  as  the  decarbonisation  of  intensive  industries,  the  improvement  of 
energy-storage solutions, or the expansion of uses for renewable energy. For example, the IF 

18 

 
 
 
 
 
 
 
 
 
will be supporting projects to: (i) combine solar-energy generation with agricultural activities; 
(ii)  promote  shipping  mobility  solutions  based  on  hydrogen  fuel  or  wind;  and  (iii)  develop 
district  heating  installations  using  geothermal  energy.  For  the  industrial  sector,  the  projects 
under this call will develop solutions such as: (i) electric furnaces in the glass manufacturing 
industry;  (ii)  carbon  removal  pre-cast  construction  materials;  or  (iii)  the  incorporation  of 
alternative fuels (e.g. renewable hydrogen or biofuels) and heat pumps into various industrial 
processes. On energy-storage solutions, the projects under SSC-2021 will develop solutions 
such  as  improved  energy-as-service  schemes,  or  new  electric-vehicle  battery-cooler 
technologies that reduce the weight of energy-storage systems.  

5  CUMULATIVE RESULTS OF THE INNOVATION FUND BY THE END 

OF 2022 

By the end of 2022, the IF had launched and awarded four calls for proposals: two for small-
scale projects and two for large-scale projects. In total, 70 projects have been selected to 
receive  support  in  the  form  of  grants  totalling  EUR  3.1  billion.  The  interest  of  project 
developers has remained high, particularly in the calls for large-scale projects. The most 
support  so  far  has  been  directed  to  projects  seeking  to  decarbonise  energy-intensive 
industries, with a particular focus on the cement and lime sector. From a geographical point 
of  view,  there is  still an under-representation  of  participating projects  located in  eastern 
Europe. The currently selected projects plan to avoid 215 million tonnes of CO₂e emissions 
over a period of 10 years, making the IF a key contributor to the European Green Deal and 
the EU’s aim to reach climate neutrality by 2050. 

The IF launched its first call for proposals on 3 July 2020 (first large-scale call) and the second 
one on 1 December 2020 (first small-scale call). By the end of 2022, three additional calls had 
been  launched:  the  second  small-scale  call  (31 March 2022),  the  second  large-scale  call 
(26 October 2022), and the third large-scale call (3 November 2022). 

5.1  Project participation in the call 
Between its launch and the end of 2022, the IF had received a total of 748 proposals for projects, 
at  both  large  scale  and  small  scale,  out  of  which  70  projects  were  preselected  for  grant 
agreement. As can be seen in Figure 16, participation in the small-scale calls has differed from 
participation in the large-scale calls. The small-scale calls initially attracted a lot of interest, 
but participation then fell by 70% between the first and the second call. One of the reasons for 
this loss of interest in small-scale calls may have been due to the small size of the maximum 
CAPEX requirement at only EUR 7.5 million. Projects of this size often have access to national 
funding with less competition and easier application procedures. There was a similar pattern in 
the large-scale call, which also initially attracted strong interest. However, there was only a 
55%26  decline  in  the  number  of  proposals  between  the  first  large-scale  call  and  the  second 

26 LSC-2020 was organised in two steps. In step 1 expressions of interest were received and 70 of the highest 
ranking proposals were invited to participate in step 2. In Step 2, a full application and evaluation process was 

19 

 
 
 
 
 
 
 
 
 
 
 
large-scale call. In this case, the reasons for the decline in proposals may be due to the very 
high oversubscription/very low success rate in the first large-scale call in 2020 (LSC-2020), 
which might have discouraged applicants from applying the following year. It should also be 
noted  that,  during  the  first  large-scale  call  in  2020,  a  two-step  selection  process  was 
implemented;  first  there  was  an  ‘expressions  of  interest’  stage  followed  by  a  full  ‘call  for 
proposals’ stage. After the first stage, 117 proposals were found to meet or exceed the threshold 
criteria and 70 of these proposals were invited to the second stage, in line with the provisions 
of the call, resulting in 48 proposals exceeding the threshold criteria in this second stage, 7 of 
which were finally invited for grant agreement preparation. This scheme aligned with Article 
12  of  the  Delegated  Act  of  the  IF.  However,  this  two-step  approach  caused  significant 
administrative burden while unnecessarily prolonging the period of evaluation and it may also 
have discouraged applicants from applying the following year. The one-step procedure of LSC-
2021 proved more streamlined. 

In small-scale calls, the proposals finally invited to prepare grant agreements represented only 
25% of the proposals assessed as being eligible for evaluation, but represented 89% of those 
proposals  that  were  assessed  as  exceeding  the  minimum  threshold  requirements  to  be 
considered for evaluation. 

In  large-scale  calls,  the  number  of  proposals  invited  to  finally  prepare  a  grant  agreement 
represented an average of 15% of those assessed as being eligible for evaluation and 46% of 
those assessed as being above the minimum threshold requirements to be considered for a grant 
award. 

Figure 16: Number of projects in calls for proposals of the Innovation Fund (December 2022) 

carried out. In LSC-2020, out of the 311 proposals received for Step 1, a total of 117 were found eligible for the 
second step. Following the call text provisions, 70 proposals were invited for the Step 2 application. In Step 2, 66 
proposals were received and evaluated.  

20 

 
 
 
 
 
 
 
 
 
5.2  Call budget and financial support requested  
The selected projects in the four calls for proposals under the IF amounted to a total combined 
expected  CAPEX  of  EUR  13.5  billion.  The  total  maximum  support  from  the  IF  for  these 
selected projects was EUR 3.1 billion in grants, representing an average of 23% grant support 
for the capital expenditure of all the projects27. This also meant that the IF is currently helping 
to mobilise EUR 10.4 billion from other sources of investments, a figure that has been growing 
with each call, as can be seen in Figure 18. 

The total available budget of the four calls closed by the end of December 2022 accounted for 
EUR 2.7 billion. Due to oversubscription, particularly in the large-scale calls, the application 
of the flexibility rule laid down in the financial decisions28 was applied to three of the calls 
(SSC-2020, LSC-2020 and LSC-2021). This application of the flexibility rule resulted in an 
average increase of 16% in the original budget to make a total increased budget of EUR 3.14 
billion, as can be seen in Figure 17. Despite this increased budget for three calls, there was one 
call – SSC-2021 – where the selected projects represented a budget that was 37% below the 
total budget of the call. 

Figure 17: Comparison of available budget and requested grants in projects selected under the Innovation Fund 

27 IF grant covers both capital and operational expenditure, so these figures are given by way of indication. 

28 https://ec.europa.eu/info/funding-tenders/opportunities/docs/2021-2027/innovfund/wp-call/wp_innovfund-
2020_en.pdf. 

21 

 
 
 
 
 
 
 
Figure 18: Comparison of CAPEX and maximum grant amount requested by selected projects under the Innovation Fund 

5.3  CHARACTERISTICS OF THE AWARDED PROJECTS 

5.3.1  Categories and sectors 
The IF organised each of its first four calls in a ‘technology neutral’ manner (i.e. the IF did not 
favour any particular technology) for categories eligible for IF support: (i) renewable energy; 
(ii)  energy  storage;  (iii)  energy-intensive  industries;  and  (iv)  carbon-capture  and  geological 
storage and/or use.  

Across all four calls, the two categories in which the most proposals were selected were energy-
intensive industries (38 proposals) and renewable energy (14 proposals). However, although 
the former is also the category with the largest share of the total grant amount selected (48% 
or EUR 1.5 billion, as can be seen in Figure 20), the CCS category is the most budget intensive 
by proposal, using 35% of the budget with only 6 proposals. 

22 

 
 
 
 
 
 
 
Figure 19: Number of selected projects by sector in the IF’s calls for proposals  

Figure 20: Number of selected projects by country in the IF’s calls for proposals 

Looking  into  the  sectors,  as  reflected  in  Figure  21,  the  two  sectors  with  the  most  selected 
projects have been “hydrogen” (10 projects) and the “glass, ceramics and other construction 
materials”  sector  (7  projects).  However,  when  considering  the  cumulated  allocated  funding 
grant support by the end of December 2022 (see Figure 22), the leading sector is “cement and 
lime” (EUR 810.7 million), followed by hydrogen (EUR 411.1 million). This is mostly because 
most of the emissions from the cement and lime industry originate in the chemical reaction 
inside  the  kiln  and  the  most  common  technological  pathway  for  the  abatement  of  these 

23 

 
 
 
 
 
 
 
 
 
emissions is through an investment-intensive CCS solution, which still requires considerable 
investment. 

 Figure 21: Number of selected projects by sector in the IF’s calls for proposals 

Figure 22: Number of selected projects by country in the IF’s calls for proposals 

5.3.2  Geographical distribution 
The  IF  aims  at  achieving  geographical  and  sectoral  balance.  When  this  report  was  being 
drafted, selected projects were located in 20 of the 30 eligible countries (EU Member States 
and EEA countries)29. However, there is proportionately lower participation by projects from 
eastern  and central Europe. 

29 Two projects are located in several countries: NorthFlex in Poland-Sweden, and Listlawelbattcool in Czechia-
France-Spain. 

24 

 
 
 
 
 
 
 
 
The  country  with  the  most  projects  selected  by  the  IF  by  the  end  of  2022  was  Spain  (11 
projects),  followed  by  France  (10  projects)  and  Sweden  (7  projects).  When  looking  into 
cumulated allocated funding from the IF grant budget since the creation of the IF, the picture 
list  followed  by  France 
changes,  with  Sweden  (EUR  511  million) 
(EUR 368.8 million) and Belgium (EUR 361.3 million). 

leading 

the 

Figure 23: Number of selected projects by country in the IF calls for proposals 

Figure 24: Amount of grants (EUR) in selected projects under the IF’s calls for proposals 

Geographical balance in the allocation of IF funds to selected projects can also be assessed by 
looking at each country’s share of GDP in the EEA. By that measure, it can be seen in Figure 
25 that, by the end of 2022, there was still a relevant under-representation of countries like 
Germany,  France,  Italy,  or  Spain  despite  the  absolute  amount  of  grants  allocated  in  those 
countries. On the other hand, Sweden, Belgium, Bulgaria, the Netherlands and Finland all show 
an over representation when their GDPs are compared with the amount of money they have 
received in IF grants. 

25 

 
 
 
 
 
 
 
 
Figure 25: Geographical spread - share of GDP (EEA) compared with share of IF funds (data 2021) 

5.3.3  Potential for reducing GHG emissions   
The IF supports projects with significant potential to reduce GHG emissions and contribute to 
EU climate neutrality.  The total  planned reductions in  GHG emissions from  all 70 selected 
projects  by the end of December 2022 is  approximately 215 million tonnes of CO₂e over a 
period of 10 years. For reference, that is approximately 7% of total GHG emissions emitted in 
the European Union in 2022. The average planned reduction in emissions per project is 9.6 
million  tonnes  of  CO₂e  for  large-scale  projects  and  115 312  tonnes  of  CO₂e  in  small-scale 
projects. This can be translated into monetary terms as follows: for every 1 EUR of support 
provided by the IF, an average of 70 kg of CO₂e will be avoided on average over a period of 
10 years. The first actual avoided emissions will be reported during 2023 by the first projects 
that entered into operation at the end of 2022 from SSC-2020. 

Figure 26: Cumulated GHG emissions set to be avoided by selected projects over a ten-year implementation period 

Overall, the most cost-efficient projects for reducing GHG emissions are those in the “intra-
day energy-storage” sector, averaging respectively 100 kg of CO₂e/EUR of CAPEX and 147 kg 
of CO₂e/EUR of IF grant received. These levels of efficiency are reached through technological 
solutions such as that used in the NorthStorePlus project, which will manufacture (by building 
two dedicated factories, one in Sweden and one in Poland) a 6 GW of lithium-ion batteries for 
providing services to the power grid. The project will develop a high-nickel-based cell battery 
originally designed for the automotive sector albeit with greater energy density.  

26 

 
 
 
 
 
 
 
 
 
 
5.3.4  Level of maturity 
The  IF  calls support clean-tech projects  with  high financial  and business maturity, credibly 
proving that these projects can be deployed in the short-term. Projects are evaluated against 
their likelihood of achieving two key milestones: (i) financial close within a maximum of 4 
years since grant signature; and (ii) entry into operation. 

By 2022, the average time to reach financial close since the start of the selected projects has 
been  23  months  for  large-scale  projects  and  16  for  small-scale  projects,  while  the  time 
necessary to achieve entry into operation is 53 months for large-scale projects and 31 for small-
scale projects, as can be seen in Figures 26 and 27. These longer time-scales needed for larger 
projects are due to the greater complexity of larger projects. 

At the time when this report was being drafted: (i) 77% of projects were set to achieve financial 
close by the second quarter of 2024; (ii) 84% were scheduled to have entered into operation by 
early 2027; and (iii) all projects were expected to have entered into operation before the end of 
2028.  This  will  not  only  ensure  emission  reductions  before  the  end  of  the  decade,  but  also 
demonstrate that a number of decarbonisation technologies can support the transition of the 
energy and industrial sectors of the European economy. 

Figure 27: Planned date for financial close in selected projects 

27 

 
 
 
 
 
 
 
Figure 28: Planned date for entry into operation in selected projects 

IF support alone may in certain cases be sufficient to enable the projects’ timely realisation. 
This is notably the case where projects are expected to: (i) create sufficient revenues (including 
beyond the period considered for the relevant cost calculation); (ii) create synergies with other 
activities  of  project  coordinators;  or  (iii)  attract  external  private  financing.  In  some  cases, 
projects may need to secure other public funding, such as State aid or support from other EU 
funding  programmes  that  does  not  constitute  State  aid  (altogether,  considered  as  ‘public 
support’). Since the IF’s regular calls for proposals allow cumulation with State aid, a total of 
13  projects  out  of  those  selected  in  LSC-2020  and  LSC-2021  decided  to  benefit  from  this 
additional source of financing.  

5.4  Innovative technologies supported  
Projects selected to receive support from the IF cover a wide range of technological innovations 
that will be crucial for the decarbonisation of the European economy in the coming years. As 
explained above, the supported projects are classified in four categories and 19 sectors. Some 
of the relevant technologies being supported are set out in the bullet points below. 

•  On  renewable  energy:  the  IF  is  actively  supporting  projects  in  the  solar,  wind,  and 
geothermal-energy  sectors.  Although  solar  PV  power  generation  can  already  be 
considered  a  mature  technology,  there  is  still  a  need  to  make  its  manufacturing 
processes more efficient and competitive in Europe. For example, the TANGO project 
will develop one of the largest solar-panel manufacturing plants in Europe to produce 
3 GW of bifacial panels every year. These panels will be made using heterojunction, a 
technology  that  increases  efficiency  and  durability  compared  with  more  traditional 
technologies. Another project, HELEXIO, will develop manufacturing processes for 
lighter solar-panel  designs featuring  longer modules, to  make it easier to install the 
panels  on  a  wider  range  of  building  roofs.  On  wind  energy,  one  of  the  projects 
supported by the IF is the development of next-generation offshore wind turbines in 
the N2OWF project. This project has the potential to reduce the number of necessary 

28 

 
 
 
 
 
 
 
 
windmills  by  40%  compared  with  conventional  technologies.  Geothermal  energy  is 
another area being funded by the IF. It is a relatively untapped resource that can be 
used for the combined production of heat and electricity. The potential of geothermal 
energy can be increased by exploiting the possibilities of compressed gases dissolved 
in geothermal fluids (such as in the IF-funded project CCGeo) or by developing deep 
closed  loops  that  will  overcome  much  of  the  geographical  limitations  of  this 
technology  (such  as  in  the  IF-funded  project  EavorLoop).  The  IF  also  supports  the 
development of heating and cooling systems, such as in the DMC project, which will 
build  a  solar  thermal  heating  plant,  heat  pumps,  and  a  storage  facility  to  provide 
renewable heat to an energy-intensive malt-production process. 

•  On energy-intensive industries, projects are developing decarbonisation strategies that 
are  mostly  based  on:  (i)  substituting  fossil  fuels  with  renewable  fuels  or  with 
electrification;  and  (ii)  integrating  CCS  technologies  in  production  processes.  For 
example, the CLYNGAS project will incorporate waste-to-fuel synthetic fuel into the 
cement production industry, while the C2B project will demonstrate the possibilities 
of capturing emissions from cement production to be used as a raw material in other 
production activities. The  IF is  also  supporting  the development  of new sustainable 
materials and recycling processes, such as in the TLP project, which will demonstrate 
biodegradable biomaterial produced from lignin that can be used in bio-composites for 
producing packaging films and that can therefore replace traditional fossil fuel-based 
plastics. Another project being supported by the IF in this area is PULSE, which will 
implement improved technologies for recycling plastic chemicals. 

•  On  energy  storage,  the  storage  of  energy,  particularly  through  electrochemical 
technologies, will help integrate renewable generation technologies into power grids 
while providing flexibility to the system. The IF is supporting the manufacturing and 
deployment  of  enhanced  materials  in  energy-storage  installations,  such  as  the  high-
nickel-content Li-Ion batteries that the NorthStorePlus project will be developing. The 
IF will also be supporting a circular economy for batteries through, for example, the 
CarBatteryReFactory project, which will address solutions to facilitate the second life 
of electric-vehicle batteries. 

•  On CCS, the IF is supporting large-scale projects to store carbon dioxide. For example, 
the KAIROS-AT-C project  will be the first  European project  to  integrate cryogenic 
carbon  capture  from  various  industrial  sources,  with  liquefaction,  shipping  and  the 
permanent sub-sea storage of CO2. Other projects, like GO4ECOPANET and CALCC, 
will also demonstrate the large-scale capture and offshore geological storage of CO₂ 
emissions from industries like cement and lime production.  

5.5  Contribution to other EU policy objectives  
The IF has already contributed to specific policy objectives in the European Green Deal by 
supporting a variety of projects, some of which are set out in the bullet points below. 

29 

 
 
 
 
 
• 

IF projects already selected by the end of 2022 are expected to avoid 215 million tonnes 
of CO₂e emissions during their first 10 years of operation, contributing to the targets 
for reducing GHG emissions set out in the Climate Law30. 

•  The IF has provided EUR 411 million to fund 10 projects related to the production and 
use  of  hydrogen.  This  contributes  to  the  EU’s  objectives  of  deploying  renewable 
hydrogen,  as  set  down  in  initiatives  such  as  REPowerEU,  the  European  hydrogen 
strategy, and the Renewable Energy Directive.  

•  The  IF  has  provided  EUR  10.8  million  in  grant  funding  to  three  projects  related  to 
biofuels and bio-refineries, contributing to the objectives to develop alternative fuels 
set out in ReFuelEU and the biomethane action plan. 

•  The IF has provided a total of EUR 330 million to 10 projects directly related to solar, 
wind and geothermal energy. Through this support, the IF is directly contributing to the 
objectives  in  the  Renewable  Energy  Directive  and  REPowerEU  of  both  rolling  out 
renewable energy generation and developing the EU’s strategy for offshore energy31. 

•  The IF has provided EUR 89 million in grant funding to five projects related to intra-
day electricity storage, thus contributing to the objectives in the Batteries Regulation to 
promote a domestic circular economy for batteries. 

•  The  IF  has  provided  EUR  71  million  to  fund  two  projects  related  to  manufacturing 
components  for  producing  renewable  energy  or  storing  energy.  It  also  provided 
EUR 1.08 billion for 6 projects related to CCS, and invested EUR 1.45 billion in 38 
projects related to energy-intensive industries. In so doing, the IF is already contributing 
to the overall objectives of the Net Zero Industry Act (NZIA) and its Communication32. 

5.5.1  Synergies with other funding instruments  
As  mentioned  at  the  beginning  of  this  report,  the  IF  aims  to  ensure  synergies  and 
complementarities with other investment-support instruments. By the end of 2022, the IF had 
carried  out  specific  activities  to  foster  synergies  with  Horizon  Europe  and  the  European 
Investment Bank.  

The EU framework programmes for research and innovation (i.e. Horizon 2020 and Horizon 
Europe) and the IF have potential synergies. To help achieve these synergies, several actions 
have been taken. For example, some relevant topics in Horizon Europe’s work programme for 
2023-2024  (particularly  in  Clusters  4  &  5)  included  a  standard  sentence  that  encouraged 
applicants to include in their proposals a business-case strategy and feasibility study that could 
later pave the way for possible future applications to the IF. Also, that same work programme 
included in its Cluster 5 a dedicated “coordination and support action” with the objective of 

30 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the 
framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 
(‘European Climate Law’), available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32021R1119. 

31 COM(2020) 741. 

32 COM (2023) 62. 

30 

 
 
 
 
 
 
promoting the exchange of best practices among four consortia composed of beneficiaries of 
the  Horizon  2020  programme  and  helping  these  consortia  to  produce  high-quality  IF 
applications. Furthermore, the IF organised in 2022 a dedicated virtual workshop to: (i) inform 
participants in mature Horizon 2020 projects about the thematic areas covered by the IF and 
funding opportunities offered by the IF; and (ii) enable projects to share lessons learnt on the 
IF application process with potential future applicants, and share any hurdles they may have 
encountered in deploying their technological solutions. 

The  IF  and  Horizon  Europe  programmes  also  work  with  the  European  Investment  Bank 
through blended financial instruments in the EU-Catalyst Partnership. This partnership brings 
together  the  European  Commission,  the  European  Investment  Bank,  and  the  Breakthrough 
Energy Catalyst (BEC). The EU-Catalyst Partnership was launched in 2021, in the context of 
the COP26 in Glasgow, with the objective of mobilising EUR 820 million in investment for 
critical climate technologies between 2022 and 2026 in Europe. The partnership will focus its 
efforts on the fields of clean hydrogen, sustainable aviation fuels, direct air capture of carbon, 
long-duration  energy  storage,  and  the  decarbonisation  of  industry.  In  total,  the  IF  will 
contribute to the partnership with up to EUR 220 million, and Horizon Europe will contribute 
up to EUR 200 million. At the beginning of 2022, the BEC launched a first call for proposals 
as  part  of  its  collaboration  with  the  European  Union.  This  first  call  was  not  successful  in 
attracting  enough  interest  from  project  developers,  and  the  platform  was  relaunched  at  the 
beginning  of  2023,  providing  more  flexible  financing  schemes  for  advanced  technological 
stages (demonstration and first of a kind) and expanding the scope of sectors in the partnership. 

5.5.2  Knowledge sharing on clean-tech solutions 
Knowledge sharing is  an essential part of the  IF because it supports the replication and the 
faster market penetration of the technologies or solutions supported by the IF. 

In  2022,  the  first  knowledge-sharing  reports  were  submitted  by  the  supported  projects. 
Meanwhile, the European Commission, together with CINEA, has made significant efforts to 
communicate and disseminate knowledge gathered by the projects during 2022. During 2022, 
the IF held one closed-door event: ‘Main Challenges in Reaching Financial Close (FC) and 
Ways to Tackle Them’ (September 2022). This event discussed issues such as challenges in 
securing financing, the impact of regulatory frameworks and permitting processes, and market 
uncertainty. 

The Commission also organised regular meetings of the IF Expert Group throughout 2022 to 
discuss  with  Member  States  and  industry  representatives  the  implementation  and  future 
orientations of the IF. In addition, DG CLIMA and/or CINEA participated in more than 50 
events organised by third parties to increase knowledge and awareness of the IF. According to 
a survey carried out during the event with IF projects, the major factors that determine whether 
projects  reach  financial  close  include,  in  descending  order  of  importance:  (i)  challenges 
encountered  while  contracting  with  suppliers  and  off-takers;  (ii)  unexpected  increases  in 
CAPEX;  (iii)  delays  in  the  delivery  of  equipment,  raw  material  or  feedstock;  and  (iv) 
procedures for permitting and government approvals. 

31 

 
 
 
 
 
 
 
 
6  PROJECT DEVELOPMENT ASSISTANCE FOR LESS MATURE 

PROJECTS 

The PDA programme has so far provided support to 22 projects. Of these 22 projects, 19 
had already completed their support programme by the end of 2022, while a further 3 are 
continuing  to  receive  support.  The  European  Investment  Bank  is  also  in  negotiations  to 
provide  PDA  support  to  a  further  15  projects.  This  support  has  been  critical  in  helping 
projects to improve their maturity and therefore improving their applications in IF calls for 
proposals. The programme has proven successful in helping some projects to re-apply to 
calls,  having  been  unsuccessful  in  the  previous  year.  Of  the  re-applications  submitted  in 
LSC-2021 and SSC-2021, 40% were selected for grant-agreement preparation.  

The  project  development  assistance  (PDA)33  programme  is  a  part  of  the  IF  is  dedicated  to 
improving the maturity of some selected projects through high-quality technical and financial 
advice provided by the European Investment Bank (EIB)34. The support is tailored to the needs 
of  each  project  to  make  them  more  competitive  on  maturity  aspects  for  future  calls  for 
proposals  from  the  IF.  The  PDA  can  also  help  to  fulfil  the  IF’s  commitment  to  better 
geographical balance in the distribution of IF support. 

The PDA is available to both large-scale and small-scale projects with a target of inviting 20 
unsuccessful  proposals  per  call  to  receive  such  support.  After  the  first  call,  LSC-2020,  22 
projects were offered assistance under the PDA programme, with 19 projects finally receiving 
PDA. And after LSC-2021, 18 additional projects were offered the assistance. By the end of 
2022, the PDA programme, implemented by the EIB, had provided a total of EUR 2.5 million 
in consultancy services to a total of 22 projects: the PDA was fully completed for 19 projects, 
and is still ongoing for 3 projects. At the time this report was being drafted, the EIB was still 
negotiating the PDA agreement with 15 additional projects (see Figures 29 and 30). Out of the 
19 projects that had completed the full course of PDA by the end of 2022, 18 have already re-
applied to one of the IF calls for proposals launched in 2022, with 2 of them already invited to 
sign a grant agreement during 2022. Since most of the projects receiving PDA support decided 
to re-apply for LSC-2022, the assessment of the results will be made in the IF report for 2023.  

33 https://ec.europa.eu/clima/eu-action/funding-climate-action/innovation-fund/project-development-
assistance_en.  

34 A Contribution Agreement about the provision of PDA was signed between the European Commission and the 
European Investment Bank in April 2021. 

32 

 
 
 
 
 
 
 
 
Figure 29: Number of projects engaged in PDA by sector by December 2022 

Figure 30: Number of projects engaged in PDA by country by December 2022 

7  CONCLUSIONS AND NEXT STEPS 

The IF has become a key instrument for achieving climate neutrality by 2050 in the European 
Union, supporting the net-zero ambition and innovative technologies. By the end of 2022, the 
70  projects  selected  to  receive  support  from  the  IF  covered  19  sectors  in  the  categories  of 
energy-intensive industries, energy storage, renewable energy, and CCS. These projects are set 
to avoid a total of 215 million tonnes of CO₂e emissions during their 10 years of operation. For 

33 

 
 
 
 
 
 
 
 
 
 
 
 
reference, this is approximately 7% of the total GHG emissions emitted by the European Union 
in 2022. 

The oversubscription to LSC-2021 was remarkable, as budget was only available to cover 36% 
of the total grant amount requested by proposals that met the minimum threshold. However, 
the interest in the small-scale call seems to have considerably reduced: there were 66 proposals 
in response to SSC-2021, compared with the 232 received in SSC-2020. This meant that all 
eligible proposals that met or exceeded the ranking threshold requirements in SSC-2021 (17) 
were invited for grant-agreement preparation, and that 38% of the available budget in the call 
was not allocated. One of the reasons for this reduction in interest in the small-scale window 
may be the excessively low limit on CAPEX for project participation, set at EUR 7.5 million. 
This proved to be insufficiently attractive given the numerous national funding programmes 
available for such levels of support. 

The  PDA  programme  began  operations  in  2021,  with  19  projects  having  completed  a  full 
programme of PDA support from the EIB by the end of 2022. Out of these projects supported, 
18 projects (all of which had been rejected in previous calls) re-applied to calls launched in 
2022, and 2 of these 18 have already been invited to sign a grant agreement under SSC-2021 
(most of the rest re-applied to LSC-2022, the results of which will be assessed in next year’s 
report).  

At the moment of publication of this report, the IF had already taken some next steps that will 
be further reported in the IF Annual Report 2023: 

•  The third large-scale call (LSC-2022) was launched on 3 November 2022 and closed in 
March 2023. The call received 239 proposals, of which 41 have been invited for grant-
agreement preparation. The total grants available under this call amount to more than 
EUR 3.6 billion and will support projects aiming to bring innovative technologies to 
industries,  hydrogen,  renewable  energy,  and 
the  market 
manufacturing components for energy storage and renewables. A third small-scale call 
is scheduled for award decision by the end of 2023. Further details on these calls will 
be reported as part of the IF annual report for 2023. In addition, by the beginning of 
2023, three additional projects participating in SSC-2021 were invited to receive PDA. 

in  energy-intensive 

• 

In  2023,  a  new  mechanism  will  be  implemented  for  project  selection  based  on  a 
competitive bidding procedure. The first pilot auction under the IF will be organised in 
the context of the European Hydrogen Bank, directed to  the domestic production of 
renewable hydrogen. The competitive bidding procedure will also include an ‘auction-
as-a-service’ mechanism, which will enable EEA countries to use their national budgets 
to award support to projects located on their territory while simultaneously relying on 
an EU-wide auction mechanism to identify the most competitive projects. 

•  Before the end of 2023, a call for proposals will be launched, combining windows for 
small, medium, and large projects, and specific windows for manufacturing and pilots. 
The call will be awarded during 2024.  

34 

 
 
 
 
 
 
 
 
•  A revised delegated act on the IF has been adopted to align the operation of the IF with 
the revised ETS Directive, which expanded the sectors supported by the IF (now also 
including maritime, aviation, CCS, and land transport).  

35