EU Innovation Fund Selects 77 Clean Technology Projects Across 23 Countries

The EU’s latest €3.4 billion clean technology award reaches beyond familiar wind and solar deployments: for the first time, the Innovation Fund selected a small modular nuclear reactor project and a direct air carbon capture and storage (DACCS) project. The European Commission chose 77 projects across 23 countries, projecting 290 million tonnes of CO2e reductions during their first decade of operation. Those figures describe a broad portfolio, though they don’t show how much of the projected reduction comes from each project, or how quickly the projects will reach full operation. That distinction matters: selection is a funding decision, while the emissions result remains a projection tied to future performance.

The award’s breadth also gives a clearer sense of how the Commission is defining clean technology. It’s not treating the transition as a matter of installing renewable power alone. Industrial processes, fuels, manufacturing capacity and carbon removal all appear in the mix, reflecting the range of activities that must change if Europe is to meet its climate goals. The hard question is execution: whether these projects can move from funded plans to operating facilities that deliver the promised reductions.

Industry and manufacturing take large shares

About €1.6 billion went to 12 large-scale decarbonization projects covering areas such as industrial carbon management, chemicals, iron and steel, aviation, advanced fuels and critical raw materials. That concentration points to an emphasis on sectors where emissions can be difficult to cut through straightforward electrification alone. For heavy industry, changes may involve redesigning production processes, sourcing lower-carbon inputs or managing emissions that remain after other reductions. Each route has different technical and commercial demands, so the portfolio’s total funding figure can’t tell readers which approaches are most likely to prove repeatable.

The selection also includes 17 medium-scale projects, which requested €458 million, and 20 small-scale projects seeking €124 million. The wording matters: those are amounts requested by the projects, not necessarily a breakdown of what each group ultimately received. A mix of project sizes can give the fund room to support proposals at different stages and with different capital needs. Smaller awards may help test an approach; larger projects are more directly tied to building or changing industrial operations. Still, project size alone doesn’t reveal how mature a technology is or whether it can scale.

Twelve clean technology manufacturing projects requested nearly €900 million. Their focus includes components for heat pumps, solar panels, electrolyzers and electric vehicle batteries. Supporting manufacturing addresses a different part of the transition from funding deployment: it concerns the equipment and components needed to build clean energy systems and electrify more activity. That’s a meaningful shift in emphasis, because a project can reduce emissions at its own site while manufacturing capacity helps determine whether similar equipment can be supplied more widely.

Another 16 pilot projects sought around €394 million, spanning aviation, wind and ocean energy, maritime applications, nuclear energy, DACCS, hydrogen, chemicals and refineries. Pilot projects are designed to test technologies or processes under practical conditions, where operating limits and costs become harder to ignore. That makes them useful, but it also means their presence in a funding round shouldn’t be read as evidence that a technology is ready for broad commercial use. A test can answer important questions while leaving the next step uncertain. In this portfolio, a wide range of experiments—and very different routes to lower emissions.

Carbon market revenues fund the awards

The grants come from the EU Innovation Fund, financed by revenue from the EU Emissions Trading System (EU ETS). Established in 2005, the system prices emissions in sectors including power and heat, refining, steel, cement, paper, chemicals and commercial aviation. The Commission says it has generated more than €270 billion and helped cut emissions in covered sectors by 50%. Those figures set out the Commission’s account of the system’s reach; they also explain how the fund connects a carbon price to direct support for projects intended to reduce emissions.

This funding model gives the Innovation Fund a specific role. The EU ETS puts a cost on emissions in covered sectors, while the fund directs revenue toward projects the Commission wants to help bring to market. The two parts operate on different timelines: a carbon price affects decisions across covered businesses, while a grant supports particular proposals. For companies considering expensive changes to industrial equipment or production methods, funding can help address part of the upfront cost. It won’t, by itself, show whether a project can operate profitably or whether the same design will work elsewhere.

The awards follow a December 2025 call that made €5.2 billion available for proposals in net zero technology, clean hydrogen and industrial decarbonization. The Commission plans to open the next Innovation Fund calls in December 2026. That sequence suggests the current selection sits within an ongoing funding programme, rather than a single intervention. For applicants, the next call will offer another chance to compete; for the Commission, repeated rounds create an opportunity to compare proposals and direct support across a changing set of technologies.

A wider field, with harder questions ahead

Climate Commissioner Wopke Hoekstra said the fund helps companies bring clean technologies to market while reducing emissions and supporting Europe’s competitiveness, jobs and investment. That is the policy case for the awards, and the range of selected projects shows how the fund is putting it into practice. Yet the portfolio’s diversity also makes it harder to assess with one headline number. Industrial carbon management, battery components and DACCS don’t serve the same purpose, face the same obstacles or produce comparable results on the same schedule.

The first-time selections of a small modular nuclear reactor project and a DACCS project are significant because they widen the technologies competing for a place in the EU’s climate strategy. This is more significant than it looks: a funding decision can signal which kinds of proposals are considered eligible to compete, even when it doesn’t settle whether they’ll succeed. In the case of DACCS, the core idea is to capture carbon dioxide directly from the air and store it; in nuclear power, the project category brings a different way to supply energy into the fund’s portfolio. The selection alone doesn’t establish either technology’s eventual contribution.

And yet the Commission’s projected 290 million tonnes of CO2e reductions gives the public a number to watch against project delivery. The practical test will be whether funded projects are built, operate as intended and produce measurable cuts during the period the Commission describes. If you’re working in this space, the award offers a useful signal about the breadth of technologies that can attract EU support, alongside a reminder that funding is only one part of deployment. The portfolio is ambitious in scope; its impact will depend on what reaches operation.