New EU Innovation Fund: how can it support climate protection?

industrial plantClick to enlarge
The EU Innovation Fund should help making the power sector and industry more climate-friendly.
Source: erikdegraaf /

A research report commissioned by the UBA has analysed a range of options for designing the EU Innovation Fund (IF), a financing instrument created under the EU Emissions Trading System to support demonstration projects for low-carbon innovation in the power sector and industry. From 2019 onwards, this fund will use revenues from auctioning emissions trading allowances for this purpose.

The report „The Innovation Fund: how can it support low-carbon industry in Europe“ combines lessons learned from the IF’s predecessor mechanism “NER 300” with insights from expert interviews in three key industry sectors (iron & steel, cement, pulp & paper).

One of its main conclusions is that “breakthrough technologies” with a high long-term abatement potential, and technologies in earlier phases of demonstration rather than those closer to the market but with less long-term potential, should primarily be targeted. By doing so, the fund would contribute to closing an important gap in public support for low-carbon innovation.