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As the European Commission kicks off its new mandate this week, it has announced more funding for green hydrogen and EV battery technologies.
As the first week of its new mandate kicks off, the European Commission has stepped up efforts to boost net-zero technologies that it says are key to ensuring the competitiveness of European industry, while also meeting agreed climate goals.
It has launched two new calls for proposals with a budget of €3.4bn, designed to accelerate the deployment of innovative decarbonisation technologies in Europe, including electric vehicle batteries.
It also announced the launch of a second auction of the European Hydrogen Bank to accelerate the production of renewable hydrogen in the European Economic Area (EEA) with a budget of €1.2bn from EU funds, plus more than €700m from three member states.
The proposals call and the auction are financed by the Innovation Fund, using revenues from the EU Emissions Trading System (ETS). It’s all part of the EU’s ambition to bolster Europe’s leadership and manufacturing capacity in innovative, cutting-edge, net-zero technologies, while pursuing the path to climate neutrality by 2050.
It is the first time under the Innovation Fund call for proposals that member states have the possibility of complementing the Net-Zero IF 24 Call with national funding schemes. This new option, called ‘Grants-as-a-Service’, allows the member states to leverage the Innovation Fund’s evaluation process and streamlined state aid approval process.
Yesterday (3 December), the Commission and the European Investment Bank (EIB) also initiated a new partnership to support investments in the EU’s battery manufacturing sector. This partnership would see a €200m top-up (loan guarantee) to the InvestEU programme from the Innovation Fund. The money will be directed to support innovative projects along the European battery manufacturing value chain to address financing challenges by enabling additional EIB venture debt operations over the next three years.
The new IF24 Auction will support projects for renewable hydrogen production regardless of the sector in which it will be consumed, with a dedicated budget of €1bn; as well as hydrogen production in projects with off-takers in the maritime sector, with a dedicated budget of €200m.
The Commission is also offering an ‘Auctions-as-a-service’ mechanism, which allows member states to finance projects that had bid in the auction but were not selected for Innovation Fund support due to budgetary limitations. This enables member states to use national funds to support projects in their territory without the need to run a separate auction at national level, reducing the administrative burden and cost for all parties. Spain, Lithuania and Austria have recently announced their participation in Auctions-as-a-Service this year, pledging up to €836m in national funds to support renewable hydrogen production projects located in their countries.
With an estimated revenue of €40bn from the EU Emissions Trading System between 2020 and 2030, the Innovation Fund aims to create financial incentives for companies and public authorities to invest in cutting-edge low-carbon technologies and support Europe’s transition to climate neutrality. It has already allocated about €7.2bn to more than 120 projects through previous calls for proposals.
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