EU Commission clean tech investment: EU Commission commits Euro 4.6 billion to support clean tech projects

The newly appointed European Commission (EC) announced on Tuesday its plans to invest Euro 4.6 billion in decarbonisation technology and clean hydrogen projects, utilising funds raised through its EU Emissions Trading System (EU ETS).

The new investment commitments include two new calls for proposals totalling Euro 3.2 billion for net-zero technologies, including Euro 1 billion targeted specifically towards electric vehicle battery cell manufacturing, and a further allocation of Euro 1.2 billion to accelerate the production of renewable hydrogen through the European Hydrogen Bank, according to an EC statement released on Tuesday.

Each of the initiatives will be financed by the EU’s Innovation Fund, from funds raised through the EU ETS. Established in 2005, the ETS puts a price on carbon emissions for key GHG-intensive sectors, including electricity and heat generation, oil refineries, steel, cement, paper, chemicals, and commercial aviation, among others.

In 2023, European Union lawmakers agreed to increase the EU ETS’ scope, raising the direct emissions reductions required by covered sectors, and expanding the system to new sectors. The EU ETS is now expected to generate revenues of approximately Euro 40 billion from 2020-2030.

The Innovation Fund is one of the world’s largest funding programmes for the deployment of net-zero technologies, and one of the key tools behind the European Green Deal Industrial Plan, aimed at enhancing the competitiveness of Europe’s net-zero industries and supporting the European Union’s transition to climate neutrality. The fund is aimed at creating financial incentives for companies and public authorities to invest in advanced net zero and low carbon technologies.

The European Union Commission recently announced that it selected 85 decarbonisation technology-focused projects to receive Euro 4.8 billion through the Innovation Fund in 2024.