EC announces new € 10 billion Innovation Fund
On 26 February 2019, the European Commission (EC) announced a new € 10 billion investment programme for low-carbon technologies in several sectors to boost their global competitiveness. The announcement follows on the adoption of the strategic vision for a climate-neutral Europe by 2050, on 28 November 2018.
Commissioner for Climate Action and Energy Miguel Arias Cañete said: “Our objective is to keep building a modern, competitive and socially fair Paris-aligned economy for all Europeans. For this to happen, we will need deployment of clean innovative technologies on an industrial scale. This is why we are investing in bringing to the market highly innovative technologies in energy intensive industries, in carbon capture, storage and use, in the renewable energy sector and in energy storage.”
The EC's objective is to ensure that Europe continues to be at the top of the league as regards new high-value patents for clean energy technologies. The first call for proposals under the new Innovation Fund will be launched in 2020, followed by regular calls until 2030. The Innovation Fund aims to create financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and to give EU companies a first-mover advantage to become global technology leaders. Grants will be offered to cover up to 60% of the additional capital and operational costs linked to innovation for the selected projects, disbursing the money in a flexible way based on the needs of individual projects.The Fund will support the demonstration of low-carbon technologies and processes in energy-intensive industries (including products substituting carbon intensive ones), environmentally safe carbon capture and utilisation and storage of carbon dioxide (CCU and CCS), innovative renewable energy and energy storage technologies. The Innovation Fund will offer effective financial support, adapting to the market needs and the risk profiles of the projects, while attracting additional public and private resources. It will fund sufficiently mature projects with the biggest innovation potential.
According to the Commission, the Innovation Fund will pool together resources amounting to around €10 billion, depending on the carbon price. At least 450 million allowances from the EU Emissions Trading System (EU ETS) Directive will be sold on the carbon market in the period 2020-2030. The revenues of these sales depend on the carbon price, which is currently around EUR 20. Any undisbursed revenues from the Innovation Fund's predecessor, the NER 300 programme, will also be added to the Innovation Fund. Thus, the total endowment of the Fund can be around EUR 10 Billion.
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