The European Union (EU) has announced a grant funding opportunity totaling €4 billion (US$4.4 billion) for upstream and downstream clean energy projects.
The European Union (EU) has announced a grant funding opportunity totaling €4 billion (US$4.4 billion) for upstream and downstream clean energy projects. The funding, derived from the EU’s Innovation Fund supported by revenues from the Emissions Trading System (ETS), aims to propel projects in various clean energy sectors, with a notable emphasis on energy storage.
The grant opportunity is part of the EU’s commitment to accelerating the transition to a low-carbon economy and combating climate change. The Innovation Fund, a key instrument in this endeavor, is designed to support innovative projects that contribute to the reduction of greenhouse gas emissions.
The funding is divided into five categories, reflecting the diverse focus areas of clean energy projects. The largest share, amounting to €2.4 billion, is allocated to ‘general decarbonization’ projects. These projects can be categorized as large-scale (capex over €100 million), medium scale (€20-100 million), or small-scale (€2.5-20 million). The goal is to support initiatives that significantly contribute to the overall decarbonization efforts.
A substantial sum of €1.4 billion is earmarked for cleantech manufacturing projects. These projects will focus on manufacturing components for renewable energy, energy storage, heat pumps, and hydrogen production, with a minimum capex requirement of €2.5 million. This allocation aims to stimulate the growth of the clean energy manufacturing sector within the EU.
An additional €200 million is dedicated to ‘pilot’ projects with a capex exceeding €2.5 million, specifically targeting ‘deep decarbonization.’ These pilot initiatives are expected to explore and implement innovative approaches to achieve substantial carbon reduction.
The Innovation Fund is designed to cover up to 60% of a project’s relevant costs, providing a significant financial boost to eligible initiatives. Information days are scheduled for November 30 and December 7, offering potential applicants insights into the application process and requirements. The application deadline is set for April 9, 2024, allowing interested parties ample time to prepare and submit their proposals.
In parallel, the EU is launching a separate €800 million scheme through an auction format, focusing on scaling up renewable hydrogen production. The EU has set an early February deadline for this initiative, reflecting the urgency and priority given to advancing hydrogen technologies.
This funding announcement comes at a crucial time for Europe’s battery manufacturing ecosystem, which is facing challenges related to investment outflows. The EU aims to address these challenges and boost the clean energy sector, with a particular emphasis on energy storage technologies.
The EU’s commitment to funding innovative projects aligns with its broader sustainability goals. The grant opportunities provide a pathway for stakeholders in the clean energy sector to contribute to the EU’s ambitious targets, fostering a more sustainable and resilient energy landscape.