Brussels — May 27, 2026 — The European Commission has awarded €400 million in grants to 65 projects under its first‑ever Innovation Fund Heat Auction, marking a major step toward decarbonising industrial heat across Europe. Funded through the EU Emissions Trading System, the initiative spans ten European Economic Area countries and is expected to avoid 6.6 million tonnes of CO₂ over the next decade.
Driving Clean Heat Innovation
The selected projects will produce around 16.3 TWh of decarbonised heat in their first five years — equivalent to replacing 1.5 billion m³ of natural gas and powering 4 million EU households. Technologies include resistance heating, heat pumps, solar thermal, electromagnetic heating, and hybrid systems, reflecting the Commission’s strategy to support diverse industrial decarbonisation pathways.
Industrial Sectors and Funding Allocation
Projects span key sectors such as pulp and paper, glass, ceramics, iron and steel, food and beverage, textiles, and pharmaceuticals. Funding was distributed across three categories: high‑temperature heat (€62.1 million), medium‑temperature heat above 5 MW (€286.5 million), and medium‑temperature heat between 3–5 MW (€47.9 million).
Strategic Significance for Europe’s Climate Goals
Industrial heat remains one of Europe’s hardest‑to‑decarbonise sectors due to high‑temperature process requirements. The auction bridges the cost gap between conventional and clean heat technologies, serving as a pilot for the forthcoming Industrial Decarbonisation Bank. The strong response — 85 applications — demonstrates industry appetite for transparent, competitive grant mechanisms.
Implementation and Future Rounds
Grant agreements will be finalised in the second half of 2026, with projects required to reach financial close within two years and begin operations within four. A second auction round worth €1 billion is planned later this year, underscoring the EU’s commitment to accelerating industrial heat decarbonisation.
The Innovation Fund, backed by €40 billion from the ETS through 2030, continues to be one of the world’s largest public funding sources for net‑zero technology innovation.
