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    On November 23, 2023, the European Commission launched two calls: the Innovation Fund grants and the Innovation Fund Hydrogen Auction, with a total €4 billion budget. In this article, we will focus on the Innovation Fund grants.

     
    What is the innovation Fund EU?

     

    The Innovation Fund is vital for the EU’s Green Deal and Net-Zero Industry Act goals. It supports cutting-edge projects aimed at substantial emission reductions, helping project promoters by sharing the risk. It targets projects that show maturity in planning, business, and finances and have a TRL between 6-9.

     

    Breaking Down the Latest Innovation Fund Call

     
    Key features:

     

    🟠Recipients of the EU innovation fund are Single applicants and consortiums from any country in the world are eligible, but the project has to be implemented in one of the EU Member States, Norway or Iceland.

    🟠Funding of up to 60% of the eligible costs

    🟠Mark your Calendars: 

    • Deadline on the 8th of February for the IF Auction. 
    • Deadline on the 9 th of April 2024 for the IF Grants.

    🟠Focus: energy-intensive industries, renewable energy, energy storage, carbon capture, use and storage, and net-zero mobility.

    🟠Follow us on our Blog, LinkedIn, or subscibe to our newsletter to be informed about upcoming R&D dates.

    Topics and Budget breakdown

    For the first time, the IF Grants are grouped into a single call with five distinct topics. Three address general decarbonization based on project size (large, medium, and small-scale), while two focus on specific areas: Manufacturing/Cleantech and Pilots

    The manufacturing topic centers on producing components crucial for renewable energy, energy storage, heat pumps, and hydrogen production.

    The pilot topic aims at constructing and operating projects dedicated to validating, testing, and optimizing highly innovative, deep decarbonization solutions across all eligible sectors.

    The call boasts an impressive total budget of €4 billion, marking a 25% increase from the previous call.

    🟠General Decarbonization – Large-Scale:

    • Total Budget: €1.7 billion.
    • Projects with CAPEX exceeding €100 million per project.

    🟠General Decarbonization – Medium-Scale:

    • Total Budget: €500 million.
    • Projects with CAPEX exceeding €20 million, up to €100 million per project.

    🟠General Decarbonization – Small-Scale:

    • Total Budget: €200 million.
    • Projects with CAPEX exceeding €2.5 million, up to €20 million per project.

    🟠Pilots:

    • Total Budget: €200 million.
    • Projects with CAPEX exceeding €2.5 million, up to €40 million per project.
    •  

    🟠Cleantech Manufacturing:

    • Total Budget: €1.4 billion.
    • Projects with CAPEX exceeding €2.5 million per project  (no maximum).

     

     

    How does innovation fund work?

    Proposal Structure:

    The application process involves various documents, including application forms, detailed budget tables, participant information, feasibility studies, business plans, and more. While there are no major changes in document requirements, Part B has a maximum limit of 80 pages, and the Feasibility Study, Business Plan, and Knowledge Sharing Plan are limited at 60 pages each.

    Key tools in the application process are the GHG Calculator, which evaluates greenhouse gas emissions and the Relevant Cost Calculator, used to determine the relevant costs of projects. 

    Amongst the changes in this new call, five GHG calculator models have been introduced, each designed for a specific type of industry, such as energy, storage, maritime, and aviation.

    Moreover, the Relevant Cost Calculator now simplifies the methodology for all projects, eliminating the “levelised cost” approach. There are now two methods: “no reference plant” (default for all projects) and “reference plant” (an option when a reference plant exists).

    Additionally, the new IF Grant Call simplified the Weighted Average Cost of Capital (WACC) computation. 

     

    Evaluation Criteria:

    The five primary evaluation criteria and the cascade evaluation process remain consistent, but there are noteworthy adjustments in some criteria and scoring. The comments provided below are pertinent to the General Decarbonization topics:

    Innovation Fund Evaluation Criteria and points
    Degree of Innovation (max. 15 points)

    No changes for this criteria.

    GHG Emission Avoidance Potential (max. 12 points)

    Remains, but with sub-criteria adjustments emphasizing the importance of clear explanations for GHG evaluators: Absolute Avoidance (2 points), Relative Avoidance (5 points), and Quality of Calculation (5 points)

    Maturity (max. 15 points)

    No changes; still assessing technical, financial, and implementation maturity.

    Replicability (max. 15 points)

    Renamed from “scalability” and expanded to include the resilience of the EU industrial system and potential for multiple environmental impacts.

    Cost Efficiency (max. 15 points)

    Introducing a revised formula, 12 – (12 x (cost efficiency ratio / 200), the evaluation now employs a more rigorous threshold for the cost efficiency ratio. Proposals exceeding 200 EUR/t CO2-eq (2000 for Pilots) will receive zero points.

    Bonus Points (max. 4 points)

    Increased from 3 to 4 for Small, Medium, and Large projects, with an additional point specifically for maritime sector proposals demonstrating potential for decarbonization and reduced climate impacts.

    Innovation Fund Infographic Evolution Europe

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