Unlocking Industrial Decarbonization: Insights from the Innovation Fund Heat Auction 2025
The European Innovation Fund is actively driving industrial decarbonization through its targeted Heat Auction 2025, aiming to accelerate the adoption of clean technologies for industrial process heat. This initiative underscores a strategic commitment to reducing greenhouse gas emissions and fostering a sustainable industrial future.
The auction focuses on critical areas of industrial heat decarbonization, with key objectives including the market ramp-up of technologies that electrify industrial processes or utilize direct renewable heat. Eligible technologies span a range of solutions such as heat pumps, electric boilers, induction heating, and direct solar thermal or geothermal sources. Hybrid projects combining these technologies are also encouraged, showcasing a flexible approach to diverse industrial needs.
The Innovation Fund 2025 Heat Auction defines specific topics to guide applicants. These include medium temperature applications (both small and large scale) and high temperature applications. For instance, medium temperature, small-scale projects can receive up to EUR 150 million, while large-scale projects can access up to EUR 350 million. High-temperature projects have a budget of EUR 500 million. These allocations are designed to support projects of varying sizes and complexities.
The application process for the Heat Auction is structured to ensure a thorough evaluation of proposals. Key components include admissibility, eligibility, relevance to the call’s objectives, quality of the project, adherence to the Do No Significant Harm principle, and financial and legal capacity of the applicant. Applicants must submit detailed information through various application forms and mandatory annexes, demonstrating the technical, financial, and operational maturity of their projects.
Award criteria are divided into two main categories: Relevancy and Quality. Relevancy assesses the project’s contribution to GHG abatement and its alignment with the auction’s objectives, including the novelty of the heat production capacity and the technology’s temperature range. Quality is further broken down into technical maturity, financial maturity, and operational maturity. These criteria ensure that funded projects are not only impactful in terms of emissions reduction but also technically sound, financially viable, and operationally feasible.
Technical maturity is evaluated based on design elements, equipment, project location, and risk assessment. Financial maturity focuses on the credibility of the business plan, financing sources, and cash flow projections. Operational maturity assesses the project teams’ competence, experience, and the overall organizational setup. The Do No Significant Harm DNSH principle is a mandatory cross-cutting requirement, ensuring that projects do not negatively impact key environmental objectives such as climate change mitigation and adaptation, water and marine resources, and biodiversity.
Collaboration and synergies are also encouraged. The Auction-as-a-Service AAaS mechanism allows Member States to participate by offering national funding envelopes. This facilitates broader participation and supports projects within national contexts while leveraging the Innovation Fund’s framework. Applicants need to submit only one application to be eligible for either European or Member State funding.
This comprehensive approach by the Innovation Fund highlights its dedication to fostering innovation and accelerating the transition to a low-carbon industrial sector. The Heat Auction 2025 represents a significant opportunity for industries to invest in sustainable heat solutions and contribute to the EU’s climate goals.