EU Launches Consultation on Next Innovation Fund Round as €10bn in Bids Flood 2025 Auctions
The European Commission has moved to shape its next major funding cycle for low-carbon technologies, consulting stakeholders on the design of the upcoming Innovation Fund 2026 calls for proposals just days after the conclusion of a record-breaking 2025 auction round that attracted close to €10 billion in bids from industry across the European Economic Area.
The Directorate-General for Climate Action hosted a hybrid stakeholder consultation event in Brussels on 19 June 2026 on the upcoming IF26 Innovation Fund call for proposals, bringing together project developers, industry, member state authorities, and climate innovation stakeholders to exchange views and provide input on its design.
Separately, the Commission has published draft terms and conditions for an Innovation Fund 2026 Heat Auction, inviting feedback until 2 July 2026 before a public consultation workshop scheduled for 7 July.
The consultation comes in the wake of strong industry engagement with earlier rounds. Applications for the Innovation Fund 2025 auctions for industrial heat decarbonisation and hydrogen production closed in February 2026. The pilot heat auction attracted 85 bids totalling €1.4 billion in funding requested, while the hydrogen auction attracted 58 bids seeking a combined €8.4 billion — a total of €9.8 billion in applications against a combined budget of €2.3 billion of EU funding, with an additional €1.3 billion from German national funds and €490 million from Spain.
Successful applicants from the 2025 rounds will be invited to prepare and sign grant agreements, with final awards expected by the fourth quarter of 2026. Selected heat projects will be required to reach financial close within two years of grant signature and to start operating within four years.
The Innovation Fund is financed entirely from revenues generated by the auctioning of allowances under the EU ETS and is one of the world’s largest programmes supporting the deployment of commercially innovative low-carbon technologies.
The Fund supports the decarbonisation of hard-to-abate sectors such as steel, cement, chemicals, and waste-to-energy, and also contributes to the Net-Zero Industry Act target of reaching 50 million tonnes of annual CO₂ injection capacity by 2030 by financing CCS infrastructure projects.
The 2026 round is anticipated to carry a significant budget. A broader EU ETS review, expected to be published by July 2026, will inform whether the Fund’s pipeline and coverage evolves further — including possible integration of carbon dioxide removals and expansions toward the maritime sector.
The consultation process is a required step before the Commission formally opens new calls for proposals, typically in the final quarter of each year.
