REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Innovation Fund in 2023
Date: 2024-12-12
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, 12.12.2024  COM(2024) 566 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the Innovation Fund in 2023  
 
 
CONTENTS 

1 

THE INNOVATION FUND ........................................................................................................................... 2 

1.1 

Innovation Fund’s contribution to EU policy objectives ..................................................................... 3 

2 

THE INNOVATION FUND’S KEY MILESTONES IN 2023 ............................................................................... 5 

3  MAIN IMPLEMENTATION EVENTS IN 2023 ............................................................................................... 5 

3.1 

3.2 

3.3 

Award of the third call for large-scale projects (LSC 2022) ................................................................. 5 

Launch of the third call for small-scale projects (SSC 2022) and initial selection of proposals ......... 8 

Launch of the Innovation Fund call for 2023 (IF23) ........................................................................... 10 

Launch of the pilot auction for renewable fuel of non-biological origin (RFNBO) hydrogen (IF23 

3.4 
auction) ............................................................................................................................................................ 11 

3.5 

3.6 

3.7 

3.8 

Selection of the first two projects under the EU-Catalyst partnership ............................................. 11 

Project development assistance (PDA) .............................................................................................. 12 

Knowledge-sharing and communication activities ........................................................................... 13 

Synergies with other funding ............................................................................................................. 13 

4 

CUMULATIVE STATUS OF THE INNOVATION FUND BY THE END OF 2023 ............................................... 14 

4.1 

4.2 

4.3 

4.4 

4.5 

Overview of the results of regular calls for proposals ...................................................................... 14 

Maturity levels of projects, implementation status and challenges ................................................ 15 

Geographical spread ........................................................................................................................... 16 

Sectors supported............................................................................................................................... 18 

Greenhouse gas (GHG) emissions avoided ........................................................................................ 20 

5 

CONCLUSIONS ........................................................................................................................................ 21 

1 

 
 
 
 
 
 
 
 
 
 
1  THE INNOVATION FUND 

The Innovation Fund (IF) is one of the world’s largest funding programmes for demonstrating 
innovative commercial zero-carbon and low-carbon technologies. Its aim is to bring to market 
novel solutions to decarbonise sectors covered by the EU Emissions Trading System (EU ETS) 
in  support  of  Europe’s  transition  to  climate  neutrality.  The  IF  is  funded  by  revenues  from 
auctioning the EU ETS allowances. In turn, it provides funding, mostly in the form of grants, 
to support projects in five key areas (se figure 1 below). Under the IF funds are currently mainly 
awarded  through  open  competitive  calls  for  proposals  or  through  competitive  bidding 
procedures  (‘auctions’).  The  IF  also  supports  projects  through  advisory  services  (Project 
Development Assistance – PDA) and through contributions to blending operations with other 
EU instruments (e.g InvestEU).  

Figure 1: Key components of the Innovation Fund 

The  European  Commission’s  Directorate-General  for  Climate  Action  (DG  CLIMA)  has 
overall responsibility for IF policy development and implementation. The Commission is also 
responsible  for  adopting  decision  on  the  amounts  of  financial  assistance  awarded  and  has 
entrusted  the  European  Climate  Infrastructure  and  Environment  Executive  Agency 
(CINEA) for launching and evaluating calls for proposals and for managing grant agreements.  

Under Article 10a (8) of the EU ETS Directive1, the Commission will report annually to the 
Climate  Change  Committee  on  IF  implementation.  This  report  provides  a  breakdown  of 
projects that have been awarded funding by sector and by Member State, and an analysis of 
how these projects will contribute to the EU’s goal of achieving climate neutrality by 2050. 

This report covers the implementation of the Innovation Fund up until 31 December 2023.  

1 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for 
greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC, OJ L 275, 
25.10.2003, p. 32. 

2 

 
 
 
 
 
 
 
 
1.1  Innovation Fund’s contribution to EU policy objectives 

The IF’s main objective remains that of supporting decarbonisation in the sectors covered by 
the EU ETS and contributing to the EU’s greenhouse gas reduction objectives as defined in the 
European Climate Law 2, while at the same time supporting urgent policy priorities and aiding 
the economic transition by creating new ‘clean industry’ business cases.  

•  The  104 projects  in  the  IF’s  portfolio  by  the  end  of  2023  are  expected  to  avoid 
442 million tonnes of carbon dioxide equivalent (CO2-eq) emissions during their first 
decade of operations, contributing to the goals of reducing GHG emissions set out in 
the European Climate Law  and achieving climate neutrality by 2050. A project such 
as  NorthSTOR+  is  expected  to  avoid  34.5 million  tonnes  of  CO2-eq  during  its  first 
decade of operation by developing an innovative stationary energy storage system for 
lithium  batteries  based  on  technology  originally  intended  for  the  electric  vehicle 
industry.  

•  The IF awarded EUR 715 million to fund 16 projects within the hydrogen sector. In 
total, projects in the IF’s portfolio are set to produce 6.54 million tonnes of hydrogen 
during their lifetimes. This figure is expected to contribute to the EU’s aim of ramping 
up renewable hydrogen production, as outlined in legislation such as REPowerEU3,and 
the Renewable Energy Directive, as well as in the European Hydrogen Strategy. For 
example,  the  Holland  Hydrogen  project  is  set  to  produce  1.3 million  tonnes  of 
renewable hydrogen in the Port of Rotterdam from a 400 MW electrolyser, 10 times 
greater than any electrolyser currently installed in Europe.  

•  The IF awarded EUR 177 million in grant funding to four projects that involve biofuels 
and  bio-refineries,  contributing  to  the  objectives  of  developing  alternative  fuels 
outlined  in  the  ReFuelEU  Regulation  and  the  biomethane  action  plan,  as  well  as 
supporting  the  implementation  of  FuelEU  Maritime  Regulation4.  For  example,  the 
FirstBio2Shipping project is expected to produce and supply biofuel to the maritime 
sector worth 6 million normal cubic metres per year (Nm3/year) of biogas, 2 400 tonnes 
per year of biomethane and 5 000 tonnes per year of bio-CO2. 

•  The IF awarded a total of EUR 360 million to 11 projects that directly involve solar, 
wind and geothermal energy. This IF support is directly contributing to the objectives 
in the Renewable Energy Directive and REPowerEU on rolling out renewable energy 

2 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’), 
OJ L 243, 9.7.2021 

3 Regulation (EU) 2023/435 of the European Parliament and of the Council of 27 February 2023 amending Regulation (EU) 
2021/241 as regards REPowerEU chapters in recovery and resilience plans and amending Regulations (EU) No 1303/2013, 
(EU) 2021/1060 and (EU) 2021/1755, and Directive 2003/87/EC, OJ L 63, 28.2.2023 

4 Regulation (EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable 
and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC, OJ L 234, 22/09/2023 

3 

 
 
 
 
 
 
 
generation and developing the EU’s strategy for offshore energy5. In particular, five 
projects in the wind sector will receive EUR 135 million, which will directly help the 
deployment of technology targeted under the EU Wind Power Package. For example, 
the HIPPOW  project  is developing a new offshore wind turbine model in Denmark. 
The prototype alone will be able to supply energy to power 7 000 households annually 
with a possible 700-fold increase or more by 2030. 

•  The IF awarded EUR 91 million in grants to fund six projects that involve intra-day 
electricity  storage  and  EUR 190  million  to  projects  manufacturing  energy  storage 
components,  thus  contributing  to  the  Batteries  Regulation6  goal  of  promoting  a 
domestic circular economy for batteries, as exemplified by projects such as GigaArctic, 
a lithium-ion battery giga factory in Norway that will produce 29 Gigawatt-hours per 
year (GWh/y). 

•  The  IF  awarded  EUR 709  million  to  fund  11 projects  that  involve  manufacturing 
components  to  produce  renewable  energy  or  store  energy.  It  also  awarded 
EUR 1.08 billion  to  six  projects  that  involve  carbon  capture  and  storage  (CCS) 
technologies,  and  EUR 3.45  billion  to  59 projects  that  involve  energy-intensive 
industries. The IF is therefore already contributing to the overall objectives of the Net-
Zero  Industry  Act  (NZIA)7  and  the  Industrial  Carbon  Management  (ICM)  strategy8. 
One  example  of  this  contribution  is  the  HynCrease  project,  which  is  designing, 
constructing and demonstrating manufacturing lines for electrolysis and fuel cells using 
innovative coating techniques and automation processes. Another project, TopSOEC, 
will  construct  a  500 Megawatt  solid  oxide  electrolysis  cell  (SOEC)  stack  module 
manufacturing facility. The Elan project will manufacture anode graphite materials that 
are expected to be used in 846 000 electric vehicles. Lastly, the Silverstone project in 
Iceland is deploying CO2 capture and permanent mineral storage on a commercial scale. 

5 Communication from the commission to the European parliament, the council, the European economic and social 
committee and the committee of the regions, An EU Strategy to harness the potential of offshore renewable energy for a 
climate neutral future, COM/2020/741 final 

6 Regulation (EU) 2023/1542 of the European Parliament and of the Council of 12 July 2023 concerning batteries and waste 
batteries, amending Directive 2008/98/EC and Regulation (EU) 2019/1020 and repealing Directive 2006/66/EC, OJ L 191, 
28.7.2023 

7 Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of 
measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 
2018/1724, OJ L, 2024/1735, 28.6.2024, 

8 Communication from the commission to the European parliament, the council, the European economic and social 
committee and the committee of the regions Towards an ambitious Industrial Carbon Management for the EU, 
COM/2024/62 

4 

 
 
 
 
 
 
 
 
 
 
 
2  THE INNOVATION FUND’S KEY MILESTONES IN 2023 

1.  Award of the third call for large-scale projects (LSC 2022) 

2.  Launch  of  the  third  call  for  small-scale  projects  (SSC 2022)  and  initial  selection  of 

proposals 

3.  Launch of the Innovation Fund call for 2023 (IF23) 

4.  Launch of the pilot auction for RFNBO hydrogen (IF23 auction) 

5.  Selection of the first projects under the EU-Catalyst partnership 

6.  Additional PDA for projects  

7.  An updated legal framework9 to ensure that the IF: (i) is fully aligned with the most 
recent amendments to the ETS Directive; and (ii) draws on the lessons learnt from the 
initial years of implementation. 

8.  Implementation  of  communication  and  engagement  activities  for  specific  sectors 

around each call for proposals. 

3  MAIN IMPLEMENTATION EVENTS IN 2023 

3.1  Award of the third call for large -scale projects (LSC 2022) 

On  3 November 2022  the  Commission  launched  the  third  call  for  proposals  for  large-scale 
projects under the Innovation Fund, with a budget of EUR 3 billion. This call was aimed at 
projects with an estimated capital expenditure (CAPEX) of over EUR 7.5 million per project. 
For  the  first  time,  the  call  was  divided  into  four  ‘topics’:  (i)  general,  with  a  budget  of 
EUR 1 billion;  (ii)  clean-tech  manufacturing  of  components  for  hydrogen  production, 
renewable  energy  and  energy  storage,  with  a  budget  of  EUR 700 million;  (iii)  innovative 
electrification  in  industry  and  innovative  hydrogen  production  and  use,  with  a  budget  of 
EUR 1 billion;  and  (iv)  construction  and  operation  of  pilot  projects,  with  a  budget  of 
EUR 300 million. The results of the call were published on 13 July 2023  

The  239 proposals  submitted  in  response  to  the  call  requested  total  grants  worth 
EUR 22.8 billion, six times greater than the available budget. After evaluation, 41 proposals 
were  invited  for  grant  agreement  preparation  process.  By  the  end  of  2023,  36 projects  had 
signed  grant  agreements  worth  EUR 3.3 billion10  in  total  support.  Together,  the  awarded 
projects are expected to avoid approximately 223 million tonnes of CO2-eq emissions during 
their first decade of operations. The first projects are due to start operations in 2024 and, by 
2027, more than half of them (64%) will have started operations.  

9 Commission Delegated Regulation (EU) 2019/856, as updated on 21/11/2023. 

10 A flexibility rule, allowing up to a 20% increase in the available budget, was used.  

5 

 
 
 
 
 
 
 
 
 
 
Figure 2: Results of the LSC 2022 evaluation 

Results - LSC 2022 evaluation - Number of projects

Results - LSC 2022 evaluation - Requested grant

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€14.000 
€12.000 
€10.000 
€8.000 
€6.000 
€4.000 
€2.000 
€-

 120

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 60

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 20

 -

99 

80 

70 

59 

39 

34 

13 

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31 

7 

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22 

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8 

GENERAL

MANUFACTURING IND.ELECT/H2

PILOTS

Received proposals

Eligible proposals

Call Original Budget

Received proposals - requested grants

Eligible proposals - requested grant

Above Threshold - requested grant

Above Threshold proposals

Pre-selected/Awarded proposals

Pre-selected/Awarded proposals- requested grant

Most  of  the  project  awarded  grants  were  in  the  ‘energy-intensive  industries’  category 
(23 proposals,  requesting  66%  of  the  available  budget),  the  bulk  of  them  involving  the 
‘manufacturing components for renewable energy’, ‘chemicals’ and ‘hydrogen’ subcategories.  

Figure 3: Categories of awarded projects in LSC 2022 

Number of projects by category

Grants awarded by category

 25

 20

 15

 10

 5

 -

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€2.500,00 

€2.000,00 

€1.500,00 

23 

LSC 2022

€1.000,00 

LSC 2022

4 

EII

Hybrid
EII/CCS

7 

RES

2 

ES

€500,00 

€-

6 

 
 
 
 
 
 
 
 
 
 
 
 
Figure 4: Sectors of awarded projects in LSC 2022 

Number of projects by sector 

 10
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6 

6 

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LSC 2022

Grants awarded by sector 

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€1.200,00 

€1.000,00 

€800,00 

€600,00 

€400,00 

€200,00 

€-

LSC 2022

The awarded projects are located in 14 different European countries, most notably Germany 
(7), Spain (6) and Norway (5).  

Figure 5: Geographical spread of awarded projects in LSC 2022 

Number of projects by country 

 8
 7
 6
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 -

3 

1 

-

1 

-

2 

1 

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7 

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5 

LSC 2022

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s
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€900,00 
€800,00 
€700,00 
€600,00 
€500,00 
€400,00 
€300,00 
€200,00 
€100,00 

€-

Grants awarded by country 

LSC 2022

3.2  Launch  of  the  third  call  for  small-scale  projects  (SSC 2022)  and  initial 

selection of proposals 

On 30 March 2023 the Commission launched the third small-scale call for proposals, with a 
budget  of  EUR 100 million  for  projects  and  an  estimated  CAPEX  per  project  of  between 
EU 2.5 million and EUR 7.5 million.  

The 72 proposals submitted in response to this call requested grants totalling EUR 289 million, 
almost three times the available budget. The results of the call were published on 19 December 
2023. After evaluation, 17 proposals worth a total of EUR 65.4 million were submitted to the 
grant  agreement  preparation  process.  The  selected  projects  are  set  to  avoid  more  than 
1.8 million tonnes of CO2-eq emissions within their first decade of operations. The ‘renewable 
energy’ (8 projects) and ‘energy-intensive industry’ (7 projects) categories accounted for the 
most awards; the ‘glass, ceramics and construction material’ and ‘manufacturing of renewable 
energy component’ categories, with three projects each, were also well represented. This focus 
mirrors that of the large-scale projects and reflects the different needs in the various sectors in 
terms of project size. 

Figure 6: Sectors of selected projects in SSC 2022 

Number of Projects by Sector 

 4

 3

 3

 2

 2

 1

 1

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1 

1 

-

-

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-

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SSC 2022

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8 

 
 
 
 
 
 
 
 
€12,00 

€10,00 

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€8,00 

€6,00 

€4,00 

€2,00 

€-

Selected Grants by Sector 

SSC 2022

In  terms  of  geographical  representation,  projects  from  23 eligible  countries  applied  for 
Innovation Fund support under this call, demonstrating a wide geographical spread in terms of 
support needed to finance clean-tech and EU green industry. After evaluation, projects from 
10 different countries were awarded support, with Italy (5) accounting for the most projects. 

Figure 7: Countries of selected projects in SSC 2022 

Number of projects by country 

 6

 5

 4

 3

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 1

5 

3 

1 

1 

1 

1 

1 

1 

SSC 2022

2 

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-

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€25,00 

€20,00 

€15,00 

€10,00 

€5,00 

€-

Grants awarded by country 

SSC 2022

As the projects were awarded funding in Q2 2024, further details of the results of this call will 
feature in the 2024 IF Annual Report.  

9 

 
 
 
 
 
 
 
 
 
 
3.3  Launch of the Innovation Fund call for 2023 (IF23) 

The call was launched on 23 November 2023 with a budget of EUR 4 billion to support the 
deployment of innovative decarbonisation technologies.  

This call was the first to combine topics for different project sizes and different themes: 

• 

• 

• 

• 

• 

‘General  decarbonisation’  (large-scale)  – EUR 1.7 billion available for projects  with 
CAPEX of over EUR 100 million. 

‘General  decarbonisation’  (medium-scale)  –  EUR 500  million  available  for  projects 
with CAPEX of between EUR 20 million and EUR 100 million. 

‘General decarbonisation’ (small-scale) – EUR 200 million available for projects with 
CAPEX of between EUR 2.5 million and EUR 20 million. 

‘Clean-tech manufacturing’ – EUR 1.4 billion available for projects with CAPEX of 
over  EUR 2.5  million  focusing  on  the  manufacturing  of  components  for  renewable 
energy, energy storage, heat pumps and hydrogen production. 

‘Pilot’ – EUR 200 million available for projects with CAPEX of over EUR 2.5 million 
focusing on deep decarbonisation. The pilot projects were considered to offer a higher 
degree  of  innovation,  as  shown  in  an  operational  environment,  but  were  not  yet 
expected to demonstrate large-scale commercial production.  

The  projects  were  selected  on  the  basis  of  the  following  award  criteria:  potential  to  reduce 
greenhouse gas emissions; degree of innovation; maturity; replicability; and cost efficiency. 
Following the most recent revision of the EU ETS Directive11, this call was also made open to 
the  maritime,  road  transport  and  buildings  sectors.  The  introduction  of  ‘bonus  points’,  for 
which certain types of projects can qualify, was another new feature.  

The call closed on 8 April 2024 and the results are expected to be published by the end of 2024. 
The results of this call will therefore feature in the 2024 IF Annual Report. For the first time, 
projects submitted under this call and exceeding the evaluation thresholds will receive a STEP 
Seal12. 

11 Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending Directive 2003/87/EC 
establishing a system for greenhouse gas emission allowance trading within the Union and Decision (EU) 2015/1814 
concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading 
system 

12 The EU's new quality label to be awarded to high-quality projects contributing to the objectives of the Strategic 
Technologies for Europe Platform (STEP). The aim of the STEP Seal is to facilitate access to further opportunities of public 
and private support for these projects. 

10 

 
 
 
 
 
 
 
 
3.4  Launch of the pilot 13 auction for  renewable  fuel of non-biological  origin 

(RFNBO) hydrogen (IF23 auction) 

On 23 November 2023, the Commission launched the first-ever auction for the production of 
RFNBO hydrogen under the Innovation Fund and as part of the European Hydrogen Bank14 
financing instrument. The main objectives of this auction for renewable hydrogen were to: (i) 
narrow the gap between production costs and demand-side willingness to pay; (ii) support the 
price  discovery  mechanism  and  market  formation;  (iii)  help  de-risk  projects  and  mobilise 
private investment; and (iv) reduce the administrative burden on applicants compared to regular 
calls for proposals. 

The pilot auction had a budget of EUR 800 million and was designed to support producers of 
RFNBO hydrogen located in the European Economic Area (EEA). Support will take the form 
of  a  fixed-premium  payment  for  a  maximum  10-year  period.  Projects  will  only  receive  the 
support upon certified and verified production of renewable hydrogen. The auction closed on 
8 February 2024 and 132 bids from 17 different Member States were submitted. 

For the first time, the auction deployed an ‘auctions-as-a-service’ scheme, allowing Member 
States to support projects in their territories that met the criteria but were not selected by the IF 
because of budgetary constraints. Germany was the first Member State to apply the ‘auctions-
as-a-service’ scheme by providing an additional EUR 350 million in budget support to German 
projects.  

The results of this call will feature in the IF Annual Report 2024.  

3.5  Selection of the first two projects under the EU-Catalyst partnership 

In addition to the calls for proposals and the auction for renewable hydrogen, the Innovation 
Fund supported the EU-Catalyst partnership with a budget of EUR 220 million (in addition to 
EUR 200 million  from  Horizon  Europe)  through  a  Green  Premium  top-up  of  the  InvestEU 
guarantee. 

The  partnership  was  launched  in  2021  at  COP26  in  Glasgow  by  President  Ursula  von  der 
Leyen,  President  Werner  Hoyer,  and  Breakthrough  Energy  Founder  Bill  Gates.  It  aims  to 
develop  large-scale  green  tech  projects  based  in  Europe  and  boost  investments  in  critical 
climate technologies. The partnership is implemented under the Breakthrough Energy Catalyst 
partnership,  which  provides  equity  and  grants  to  the  selected  projects,  and  through  the 
European Investment Bank (EIB), which provides quasi-equity/venture debt finance (backed 
by  a  green  premium  top-up  InvestEU  guarantee),  complemented  by  grants  from  Horizon 

13 This first auction was considered a ‘pilot’, with the lessons learnt from it to be implemented in follow-up auctions. 

14 Communication from the commission to the European parliament, the council, the European economic and social 
committee and the committee of the regions on the European hydrogen bank com/2023/156 final 

11 

 
 
 
 
 
 
 
 
Europe. This is the Innovation Fund’s first experience of funding in synergy with other EU 
instruments.  

During COP28 in December 2023, the partnership announced support for its first two projects:  

•  Ottana (Energy Dome): Energy Dome has developed the CO2 battery in Sardinia as part 
of its long-duration energy storage technology based on liquified CO2. This project was 
awarded  a  EUR 25 million  venture  debt  loan  by  the  EIB,  supported  by  the  IF’s 
InvestEU guarantee.  

•  FlagshipOne (Ørsted)15: Located in Sweden and owned by the Danish energy company 
Ørsted, the project was expected tol use captured biogenic CO2 and renewable hydrogen 
to  produce  some  55 000  tonnes  of  e-methanol  annually  for  the  shipping  industry, 
making it Europe’s largest integrated e-methanol production facility.  

At the time of publication of this report, a third project, Rondo, which involves power-to-heat 
technology, had been selected for support under the partnership, while others were also being 
assessed. 

3.6  Project development assistance (PDA) 

The IF’s PDA programme provides tailor-made support for promising projects, which could 
not be selected because of their lower degree of maturity, in the form advisory services. PDA 
seeks  to  help  these  unsuccessful  projects  to  mature  their  project  proposals  further,  thus 
facilitating potentially successful applications for later IF calls as well as other funding. PDA 
is implemented by the EIB.  

In 2023, the Commission provided PDA for 26 projects, which by the end of the year were 
either awaiting the signature of the PDA agreement or being implemented. Since the start of 
the programme, 39 projects have signed a support agreement and 32 PDA assignments have 
been completed.  

The positive impact of PDA became clear in 2023. A project that had applied unsuccessfully 
for the LSC 2020 call was chosen under the LSC 2022 call, while a further three projects from 
LSC 2020 were also selected. Similarly, an unsuccessful project from SSC 2021 was selected 
when it reapplied for SSC 2022.  

As  well  as  enabling  project  owners  to  improve  their  proposals  with  a  view  to  applying 
successfully to the IF in future, PDA also facilitates access to other funding opportunities. For 
example,  two  projects  supported  by  PDA  were  included  in  the  list  of  projects  of  common 
interest (PCIs), two other projects funded under the Breakthrough Energy Catalyst partnership 
(including  the  Ottana  project,  awarded  under  the  EU-Catalyst  partnership)  received  PDA 
support from the EIB, and four additional projects received national grant awards or earned 
recognition. 

15 At the time of this report’s publication, Ørsted announced that it would be terminating the project.  

12 

 
 
 
 
 
 
 
 
3.7  Knowledge-sharing and communication activities 

Knowledge-sharing is an essential part of the IF as it supports the replication and faster market 
penetration of technologies or solutions supported by the IF, making it easier to provide policy 
feedback. 

Throughout  2023,  the  IF  continued  to  organise  thematic  knowledge-sharing  workshops, 
facilitating sectoral discussions and exchanges of know-how among the projects receiving IF 
support. Four knowledge-sharing events were held during the year on: creating a CO2 transport 
and storage market together with relevant projects from the Connecting Europe Facility fund 
(30 March); hydrogen (19 September); energy storage (10 October); and CCS technologies (a 
closed-door event on 28 November). 

On 19 January 2023, the Commission, together with the CINEA, organised the 2023 clean-tech 
conference under the Innovation Fund. The event attracted policymakers, investors, industry 
leaders  and  other  stakeholders,  who  raised  awareness  among  public  and  private  financiers 
about the many business opportunities the Innovation Fund offers. During the event, there was 
a total of 120 on-site participants while some 2 000 online participants were connected to the 
livestream, demonstrating the event’s outreach to an array of interested potential stakeholders 
and applicants.  

After calls had been opened, the Commission and the CINEA organised multiple workshops 
to  present  the  texts  of  calls,  provide  guidance  on  the  application  process,  and  answer  any 
questions in relation to the respective calls.  

The Commission also organised the regular bi-annual meetings of the IF expert group in 2023 
(29 March and 6 October). The aim of these meetings was to gather input from Member States 
and industry representatives on implementation during the year and the IF’s future orientations.  

3.8  Synergies with other funding   

The IF aims to ensure synergies and compatibilities with other investment support instruments, 
for example potential upstream synergies between it and the EU framework programme for 
research  and  innovation  (i.e.  Horizon  2020  and  Horizon  Europe).  To  foster  such  synergies, 
assorted specific efforts were undertaken during 2023.  

For  instance,  several  relevant  topics  in  Horizon  Europe’s  2023-2024  work  programme 
(particularly under clusters 4 and 5) encouraged applicants to include a business-case strategy 
and  a  feasibility  study  in  their  proposals  that  could  later  pave  the  way  for  potential  future 
applications to the IF.  Furthermore, the 2023 work programme for the fifth cluster included a 
topic dedicated to supporting five coordination and support actions (CSAs) aimed at promoting 
synergies between Horizon projects and the Innovation Fund. All five CSAs started in January 
2023. 

13 

 
 
 
 
 
 
 
 
 
 
 
Furthermore,  on  8 February 2023  the  Innovation  Fund  organised  the  European  Framework 
Programme  for  Research  and  Innovation  (R&I)  –  Innovation  Fund  Synergies  Workshop, 
bringing  together  participants  from  mature  R&I  projects  funded  under  EU  R&I  funding 
programmes  (notably  Horizon  2020)  to  explore  funding  opportunities  under  the  Innovation 
Fund in order to deploy their technologies. 

4  CUMULATIVE STATUS OF THE INNOVATION FUND BY THE END OF 

2023 

4.1  Overview of the results of regular calls for proposals  

By the end of 2023, the Innovation Fund had already organised seven regular calls for proposals 
and one competitive bidding procedure. As a result, a total of 104 projects had signed grant 
agreements worth  a  maximum  total  of EUR 3.3 billion, and 17 additional projects  had been 
selected and were in the process of preparing the signature a grant agreement16. The calls in 
question were all oversubscribed when the proposals received are compared with the available 
budget  (on  average  12 times  over  for  large-scale  projects,  or  5.3 times  over  for  small-scale 
ones).  However,  the  following  graph  shows  that  the  number  of  applications  submitted  for 
small-scale  calls  was  down  on  the  first  call:  this  could  be  explained  by  the  relatively  low 
maximum CAPEX threshold of EUR 7.5 million and the fact that projects of this size often 
benefit  from  national  funding  subject  to  less  competition  and  with  easier  application 
procedures. 

Figure 8: Evaluation of participation results – Innovation Fund regular calls for proposals 

Evaluation of participation results - Innovation Fund regular calls for proposals

 350

 300

 250

232 

 200

 150

 100

 50

 -

175 

38 

29 

-

311 

292 

117 

48 

7 

239 

195 

138 

121 

66 

53 

17 

16 

-

48 

16 

-

81 

36 

-

72 

48 

17 

17 

-

SSC 2020

LSC 2020

SSC 2021

LSC 2021

LSC 2022

SCC 2022

Received proposals

Eligible proposals

Above Threshold 1st Stage [only LSC2020]

Above Threshold proposals

Pre-selected/Awarded proposals

16 These projects, selected under SCC 2022, were yet to receive their awards by the end of 2023 and will therefore feature in 
the 2024 IF Annual Report. 

14 

 
 
 
 
 
 
 
 
 
 
 
 
4.2  Maturity levels of projects, implementation status and challenges 

By the end of 2023, a total of 39 projects in the IF’s portfolio had reached financial close and 
12 had already started operations. On average, large-scale projects plan to reach financial close 
within 20 months of signing the grant agreement (well within the mandatory four-year limit 
referred to in Article 11(1), letter c) of the IF Delegated Regulation ) and start operations within 
49 months. For small-scale projects, the respective averages are 15 and 31 months. By the end 
of 2023, the Innovation Fund had disbursed a total of EUR 120.9 million grant to projects.  

Figure 9: Maturity levels of projects in the IF’s portfolio by the end of 2023 

Expected moment of financial close (# of 
projects)

Expected moment of entry into operation (# of 
projects)

 40

 35

 30

 25

 20

 15

 10

 5

 -

1 
3 

7 

2 

-
-
-
1 

11  12 

-
-
-
-
2 

15 

8 

7 

2 
4 

18 

5 

2 
2 
-

 25

 20

 15

 10

 5

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

1 
-
-
-
-

1 
-
-
-
-

-
-
-
-
-

-
-
-
-
-

-
-
-
-
-

 -

-
-
-
-
-

-
-
-
-
1 

3 

1 

5 

-

11 

5 

-

7 

1 

6 

-
-
1 
1 

9 

7 

6 

2 

3 
-

8 

4 

1 
1 
2 

9 

5 

-
1 
-

3 
-
-
-
-

1 
-
-
-
-

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

Despite  the  notable  maturity  and  quality  of  the  projects  selected,  developing  innovative 
technologies entails certain risks that sometimes materialise during implementation. This can 
lead to the grant agreement being amended or to a project being terminated.  

Since  its  foundation,  the  IF  has  amended  45 grant  agreements.  Almost  30%  of  cases  have 
incurred schedule delays caused by supply-chain disruptions. Other common reasons leading 
to amendments delays in permitting, changes affecting a project’s consortium, challenges in 
securing funding, and revisions of non-substantial financial or technical aspects. 

In 2023, grant agreements were terminated for just two projects17: 

•  BIOZIN (selected under LSC 2020, terminated in July 2023). The project had aimed to 
develop the first drop-in biofuel plant on a commercial scale, using Shell’s proprietary 
Integrated  Hydropyrolysis  and  Hydroconversion  (IH2).  The  developer  changed  its 
business priorities after re-assessing the technology.  

•  BCP (selected under SSC 2020, terminated in November 2023). The project had aimed 
to  recover  and  reuse  waste  heat  from  furnace  fumes  in  the  float  glass  production 

17 In both cases, no disbursement had taken place at the moment of termination. Non-disbursed funds will accrue back to the 
budget of the Innovation Fund. 

15 

 
 
 
 
 
 
 
 
 
 
process. The project failed to overcome uncertainty in terms of where the plants would 
ultimately be located.  

4.3  Geographical spread  

55%  of  the  projects  are  located  in  five  countries:  Spain  (17),  Sweden  (11),  Germany  (12), 
France (10), and the Netherlands (8). However, the share in terms of grants awarded paints a 
different picture, with German projects receiving the most funds (EUR 1.07 billion), followed 
by Sweden (EUR 964 million) and Belgium (EUR 670.7 million). The number of projects in 
the portfolio from eastern and central Europe remains comparatively low. 

Figure 10: Geographical spread of projects in the IF portfolio18 

Number of projects by country 

 18

 16

 14

 12

 10

 8

 6

 4

 2

 -

3 
-
1 
1 
-

1 
-
-
-
1 

1 
-
-
-
2 

1 
-
2 
-
-

-
-
1 
-
-

-
1 
-
-
-

2 
-
-
-
-

-
-
-
-
-

-
1 
-
1 
-

1 
2 

2 
1 

4 

7 

3 
-
-
2 

1 
-
2 
1 

3 

2 
1 
-
-
-

-
-
-
-
-

1 
-
-
-
1 

2 

3 

2 
-
1 

-
2 
1 
-
1 

-
-
-
-
1 

-
-
-
-
-

-
-
-
-
-

-
-
1 
-
-

-
-
-
-
-

-
-
-
-
-

-
-
1 
-
-

-
-
-
-
-

-
-
-
-
-

6 

-
3 

1 

7 

3 

2 
-
2 

4 

5 

-
-
-
1 

-
1 
-
-
1 

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

Grants awarded by country 

s
n
o

i
l
l
i

M

€1.200,00 

€1.000,00 

€800,00 

€600,00 

€400,00 

€200,00 

€-

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

The geographical spread of IF funding can also be compared in terms of weighted GDP and 
EU ETS market share in each of the countries. From these standpoints, countries like Germany, 
Italy, Ireland and Austria can still be regarded as underrepresented in terms of the amount of 
funding awarded within their territory.  

18 Only projects with signed grant agreements (by the end of 2023, projects selected under SSC 2022 were yet to sign their 
grant agreements). 

16 

 
 
 
 
 
 
 
 
 
 
Figure 11: Comparison between grants awarded per country and each country’s share of European GDP and EU ETS 

Geographical spread - Share of GDP and share of IF funds

30,00%

25,00%

20,00%

15,00%

10,00%

5,00%

0,00%

25,00%

20,00%

15,00%

10,00%

5,00%

0,00%

% IF cumulated  grant (until 2023)

% GDP (Eurostat 2023)

Geographical spread - Share of EU ETS and share of IF funds

% IF cumulated  grant (until 2023)

% ETS market

Although the effective geographical participation in the IF it is being closely monitored, it is 
too early to draw conclusions about how geographically balanced implementation has been. In 
2023,  LSC 2022  awarded  six  large-scale  projects  in  five  new  countries  (Austria,  Croatia, 
Czechia, Denmark, Ireland) and SSC 2022 selected the first small-scale projects in Denmark, 
Greece, Hungary and Latvia.  

Figure 12: Admissible and eligible proposals received per country and call 

Admissible and eligible proposals per country and per small-scale call

45

10
5

4

0

0

SSC 2020

SSC 2021

SSC 2022

7

0

0

4

1

1

13

7

4

0

0

0

3

1

0

7

4

1

50
45
40
35
30
25
20
15
10
5
0

1

1

0

6

2

1

3

0

0

3

3

1

5

1

1

1

1

1

6

2

1

3

1

0

4

2

0

25

8

5

2

1

1

2

2

1

1

0

0

2

1

1

9

7

2

10
3

3

4

2

1

1

0

0

0

0

0

1

0

0

3

2

1

2

1

0

17 

 
 
 
 
 
 
 
 
 
Admissible and eligible proposals per country and per large-scale call

32

28

20

13

15

12

10
8

0

16

9

6

7

1

1

1

0

0

1

0

0

0

0

0

1

0

0

2

0

0

4

2

0

26

13

10

15
10
9

10
7

7

5

6

5

5

2

0

26

9

0

2

1

0

3

1

0

9

5

3

5

4

2

5

0

0

6

4

2

8

8

4

45
40
35
30
25
20
15
10
5
0

14

12

5

3

1

1

6

5

3

4

4

0

39

27

16

13

9

6

LSC 2020

LSC 2021

LSC 2022

However, to address the fact that some Member States have fewer applications and awarded 
projects (as shown in the above graph), the IF is promoting several initiatives to help Member 
States increase the quality of project applications and thus improve the geographical balance. 
These  include  PDA,  dedicated  technical  assistance  to  Member  States  with  low  effective 
participation, and dedicated training sessions for national contact points (NCPs).  

The  Innovation  Fund  is  offering  PDA  combined  with  training  sessions  for  NCPs  to  help 
achieve  a  geographical  balance  across  Europe.  However,  as  shown  in  the  graph  above, 
achieving  this  goal  has  proved  challenging  in  terms  of  applications  received  and  awarded 
projects.  The  Innovation  Fund’s  Delegated  Regulation  was  therefore  revised  to  include 
technical assistance for Member States with low effective participation. This aims to strengthen 
the capacities of specific Member States to support project applicants within their territories 
through a needs assessment and by implementing solutions to fill gaps. 

4.4  Sectors supported 

The Innovation Fund places the projects in its portfolio into four main categories: (i) carbon 
capture and geological storage (CCS); (ii) energy-intensive industries (EII); (iii) energy storage 
(ES); and (iv) renewable energy (RES). Projects can also be classified in a fifth hybrid category 
in  cases  where  they  combine  carbon  capture  technologies  and  industrial  decarbonisation 
activities. By the end of 2023, most projects supported were classified as EII, with 59 projects 
representing 53% of total grants awarded. 

18 

 
 
 
 
 
 
 
 
Figure 13: Categories of awarded projects 

Number of projects by category

Grants awarded by category

 70

 60

 50

 40

 30

 20

 10

 -

23 

8 

11 

4 

13 

-
3 
-
2 
1 

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

7 

2 
3 
1 

7 

2 
2 
2 
-

8 

4 
1 
-
-
-

€4.000,00 

€3.500,00 

s
n
o

i
l
l
i

M

€3.000,00 

€2.500,00 

€2.000,00 

€1.500,00 

€1.000,00 

€500,00 

€-

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

The sectors with the largest number of projects in the IF’s portfolio are: hydrogen (16), cement 
& lime (12), manufacturing of RE components (11), and chemicals (10). The most  funding 
support (EUR 1.9 billion) has been awarded to the cement & lime sector, which is funding-
intensive owing to its continued heavy reliance on CCS technologies in order to decarbonise.  

Figure 14: Sectors of the awarded projects 

Number of projects by sector 

 18

 16

 14

 12

 10

 8

 6

 4

 2

 -

6 

3 

2 

4 

-
1 
-

5 

6 

2 
-
1 

-
-
-
1 

-
1 
-
1 

1 
-
-
1 

-
1 
1 
-

-
-
1 

3 

3 

1 
1 
1 

-
-
1 

2 

-
-
-
2 

1 
1 
1 
2 

9 

1 
1 
-

-
-
-
2 

-
-
1 
-

1 
-

5 

1 

1 
-
1 
2 

1 
-
-
1 

5 

5 

1 
-

2 
-
-
-

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

19 

 
 
 
 
 
   
 
 
 
Grants awarded by sector 

s
n
o

i
l
l
i

M

€2.500,00 

€2.000,00 

€1.500,00 

€1.000,00 

€500,00 

€-

LSC 2022

LSC 2021

SSC 2021

LSC 2020

SSC 2020

4.5  Greenhouse gas (GHG) emissions avoided 

The  104 projects  in  the  Innovation  Fund’s  2023  portfolio  are  expected  to  avoid  a  total  of 
442 million tonnes of CO2-eq during their first decade of operations, representing an average 
of EUR 68 of grant funding per kg of CO2-eq avoided.  

Figure 15: Emissions expected to be avoided during the first decade of operations 

GHG emissions expected to be avoided over 10 years (tonnes of CO2-eq)

tons CO2e avoided

1.338.246 

76.733.449 

4.488.620 

136.466.754 

222.977.964 

 -

 50.000.000  100.000.000  150.000.000  200.000.000  250.000.000  300.000.000  350.000.000  400.000.000  450.000.000  500.000.000

SSC 2020

LSC 2020

SSC 2021

LSC 2021

LSC 2022

20 

 
 
 
 
 
 
 
 
 
 
 
 
5  CONCLUSIONS  

The IF has become a key instrument for achieving EU climate neutrality by 2050, supporting 
the net-zero ambition, developing innovative technologies and achieving EU policy objectives. 
By the end of 2023, the 104 projects awarded IF grant support worth almost EUR 6.5 billion 
across 20 sectors were expected to avoid 442 million tonnes of CO2-eq during their first decade 
of operations. For reference, this is approximately 14% of the EU’s total GHG emissions in 
2022. 

The IF’s large-scale project calls are consistently oversubscribed both in terms of the number 
of  proposals  received  and  those  that  are  positively  evaluated  (on  average,  3.25  times 
oversubscribed for the latter). This demonstrates the strong interest in the Fund on the European 
market and ensures high levels of competition among projects. However, it also shows that this 
type of funding is very much needed at EU level to speed up the green transition. LSC 2022 
has also been a success, receiving 239 applications, 81 of them above the minimum evaluation 
thresholds,  and  36  ultimately  awarded.  Organising  this  call  in  four  different  topics  proved 
positive in terms of instilling competition between peer projects, and it was therefore replicated 
in the IF23 call, where all four topics were again oversubscribed. 

Interest in small-scale calls, however, has been lower than expected. This could be explained 
by the low ceiling for maximum CAPEX of EUR 7.5 million as projects of this size often have 
access to national funding subject to less competition and with easier application procedures. 
For that reason, IF23 was designed to include topics for three sizes of project (large, medium, 
small), with the ‘small’ ceiling size increased to CAPEX of EUR 20 million.  

In 2023, the Innovation Fund successfully implemented new allocation mechanisms and was 
able to deploy, in record time, a competitive bidding procedure to support RFNBO hydrogen 
producers  in  the  EEA,  combined  with  the  possibility  for  Member  States  to  pool  additional 
resources through the ‘auctions-as-a-service’ scheme, thereby facilitating clearance for state 
aids.  The  Innovation  Fund  is  also  contributing  to  the  blending  of  funding  with  other  EU 
instruments  through  the  EU  -Catalyst  partnership,  enabling  certain  projects  to  receive  EIB 
venture debt financing under the InvestEU programme.  

Furthermore,  under  the  2022  calls  for  proposals  the  Innovation  Fund  steadily  improved  its 
geographical balance by awarding projects in a number of new countries for the first time. The 
Innovation Fund’s Delegated Regulation was also amended to include technical assistance for 
Member States with low effective participation.  In order to strengthen the capacities of specific 
Member States to support project applicants within their territories through a needs assessment 
and by implementing solutions to fill gaps.  

The PDA programme implemented by the EIB came on stream in 2021. By the end of 2023 it 
was still helping 17 projects to fine-tune their design and leave them mature enough to apply 
for and obtain funding. As a result, five resubmitted projects improved their outcomes and were 
selected for IF funding.  

21 

 
 
 
 
 
 
 
 
 
 
 
 
Throughout  the  year,  the  IF  delivered  on  its  knowledge-sharing  and  capacity-building 
commitments by: pursuing synergies with other EU funding sources; organising information 
days  for  its  calls  and  knowledge-sharing  events  between  its  supported  projects  and  main 
sectoral stakeholders; and deploying accessible information tools to facilitate new applications. 
The  IF  also  simplified  its  application  procedures.  In  2023,  the  methodology  for  calculating 
‘relevant costs’ was simplified by reducing the number of available methodologies from three 
to  two  (withdrawal  of  ‘levelised  cost’)  and  making  the  ‘no  reference  plant’  the  default 
methodology.  The  development  of  auctions  during  2023  also  helped  to  implement  award 
mechanisms that place a smaller administrative burden on applicants.  

The Innovation Fund is continuing its work in 2024 by awarding the IF23 call and through the 
IF23 auction; and it is also developing ‘auctions-as-a-service’ schemes that can help leverage 
additional Member States’ budgets for its instruments. The Fund will continue to serve as a 
key instrument in response to urgent policy needs while facilitating applications by simplifying 
and speeding up the deployment of funds.  

22