The European Commission is to channel €5.2bn in revenues from the Emissions Trading Scheme into clean transition technologies under the Innovation Fund.
Revenues will be directed into the Net Zero Technologies call (€2.9bn), the third auction for the European Hydrogen Bank (€1.3bn), and Industrial Decarbonisation Bank (€1bn).
The Net Zero Technologies call supports decarbonisation projects that have a significant potential to reduce greenhouse gas emissions and focuses on the manufacturing of components for renewable energy, including hydrogen production and energy storage.
The third auction under the European Hydrogen Bank is designed to provide support for the production of renewable fuels of non-biological origin (RFNBO) hydrogen or electrolytic low-carbon hydrogen across three topics; RFNBO and low-carbon hydrogen, RFNBO hydrogen only and a new topic for producers of hydrogen with maritime or aviation off takers.
Projects selected under the auction will receive support in the form of a fixed premium payment upon verified and certified production of hydrogen for a maximum period of 10 years.
The first European-wide auction for decarbonising industrial process heat will be used to support electrified and direct-renewable heat production, which is currently responsible for three-quarters of industrial emissions.
Support will be auctioned to projects which can deliver the most cost-effective CO2 abatement, closing the cost gap between sustainable solutions and fossil fuel-based alternatives for industrial process heat.
Support is granted as an output-based fixed premium, linked to verified decarbonised heat production and paid for a maximum period of five years.
Member states have the possibility to leverage on the Innovation Fund’s evaluation process and a streamlined state aid approval process.
Germany will dedicate a further €1.3bn in national funds to support RFNBO hydrogen production projects nationally. Spain will also provide €465m in national funds, of which €415m will support hydrogen projects and an additional €50m support industrial heat decarbonisation projects.
