What you need to know about the Innovation Fund 2025
The European Commission has launched the 2025 Innovation Fund (IF25) call, marking the sixth round of one of the world’s most significant funding programs for net-zero and breakthrough low-carbon technologies. The call officially opened on 4 December 2025, inviting applications for both regular grants and dedicated auction schemes.
- Submission deadlines are set for 19 February 2026 for the Hydrogen and Industrial Heat auctions and 23 April 2026 for the Net-Zero Technologies (NZT) regular grants.
The Innovation Fund is financed through revenues from the EU Emissions Trading System (EU ETS) and is expected to provide around €40 billion of support between 2020 and 2030. The program plays a vital role in enabling technologies that can make a substantial contribution to Europe’s climate-neutrality targets, bridging the critical gap between early innovation and commercial deployment.
Program scope
The Innovation Fund supports highly innovative projects capable of delivering measurable greenhouse gas (GHG) emission reductions across Europe’s most energy-intensive and strategically important sectors. Eligible activities span renewable energy, energy storage, industrial carbon management (including carbon capture, use and storage), electrification of industrial processes, and emerging solutions in net-zero mobility and buildings. Projects must demonstrate technological novelty, operational credibility and a clear decarbonization pathway aligned with long-term EU climate objectives.
Structure and budget of the 2025 call
For the 2025 cycle, the Net-Zero Technologies (NZT) call provides a total budget of €2.9 billion. The call follows the established architecture of previous rounds, enabling applicants to align their proposals with the scale, investment needs and innovation level of their projects. Funding is distributed across five familiar topics, each with their separate budget:
- Large-scale projects — Budget: €1.2 billion
Supporting major industrial decarbonization investments involving complex assets or transformative process changes. Projects must have capital expenditure above EUR 100 million. - Medium-scale projects — Budget: €300 million
Targeting sizeable industrial or energy projects requiring notable investment but below the large-scale threshold. Eligible projects must have capital expenditure above EUR 20 million and up to EUR 100 million. - Small-scale projects — Budget: €100 million
Designed for compact but impactful technologies enabling early commercial adoption. Eligible projects must have capital expenditure above EUR 2.5 million and up to EUR 20 million. - Pilot projects — Budget: €300 million
Supporting real-world demonstration of early-stage technologies before scaling. Projects must have capital expenditure above EUR 2.5 million, and grant funding is capped at EUR 40 million. - Clean-tech manufacturing — Budget: €1 billion
Supporting expansion of European manufacturing capacity for key clean-technology components. Eligible projects must have capital expenditure above EUR 2.5 million
Budget levels have been adjusted to reflect EU priorities. The cleantech manufacturing, medium-scale and pilot project categories see significant increases compared with IF24 (approximately +43%, +50% and +50% respectively), while the large-scale and small-scale categories maintain similar budget profiles to the previous round.
Notably, no dedicated Battery Call is included this year, marking a shift from IF24. Battery projects may still apply under the Cleantech manufacturing topic, but will do so within a broader and more competitive funding envelope.
Auctions for hydrogen and industrial heat
Alongside the regular grants, the 2025 program also includes two auction schemes, reflecting the EU’s growing emphasis on market-based mechanisms to accelerate clean-technology deployment.
- Hydrogen auction — €1.3 billion
Continuing from the previous round, this auction supports renewable and low-carbon hydrogen production and its use in hard-to-abate industrial sectors. Multiple baskets are available to accommodate different production pathways and end-use applications. - Industrial Heat auction — €1 billion (new this year)
Introduced for the first time under IF25, this auction focuses on decarbonizing industrial heat across a range of temperature categories. It aims to accelerate the replacement of fossil-based process heat with renewable or low-carbon alternatives — a critical but historically underfunded element of the industrial transition.
Together, the NZT call and the two auctions make more than €5 billion available for innovative low-carbon projects under the 2025 Innovation Fund.
Funding intensity
The Innovation Fund can co-finance up to 60% of relevant costs, covering a combination of capital expenditures and eligible operational expenditures associated with the early years of project implementation. This high level of support aims to address the financing challenges typically faced by large and innovative projects. The only capped category is the pilot topic, where maximum funding is limited to €40 million to enable broad participation.
Updated methodologies and evaluation criteria
The 2025 call introduces several methodological and evaluative refinements intended to improve comparability, strengthen environmental safeguards and align the Fund more closely with broader EU industrial policy priorities.
Key updates include:
- Revised methodologies for calculating relevant costs and GHG emission avoidance, providing clearer guidance for applicants and evaluators.
- A restructured bonus-point system, now including a specific bonus for projects coordinated and implemented by SMEs.
- Enhanced integration of the Do No Significant Harm (DNSH) principle under the EU Taxonomy, reinforcing environmental compliance across all topics.
- Adjusted replicability criteria, shifting emphasis toward efficiency gains and multi-dimensional environmental benefits.
- Expanded scoring for Industrial Leadership, now placing stronger focus on European value creation, knowledge retention, collaboration with research institutions, and the diversification of critical supply chains in line with the Net-Zero Industry Act.
These updates reflect the evolving mission of the Innovation Fund: not only to reduce emissions, but also to bolster Europe’s technological and industrial resilience.
