The European Commission selects 77 projects to share €3.4 billion in grants from its Innovation Fund, the EU's main grant scheme for new low-carbon technology. The announcement, made on 19 October, covers steel, cement, chemicals, hydrogen and clean technology factories in 23 countries. Yet the more telling number sits behind the headline. Companies asked for €17.5 billion. For every euro on offer, applicants wanted about six.
That gap says less about the quality of Europe's industrial plans and more about how they are paid for. Many of the projects that miss out are not weak. They simply arrive in a round where demand runs far ahead of supply.
How the fund works
The Innovation Fund draws its money from the EU Emissions Trading System (ETS), the carbon market that charges power plants and factories for each tonne of carbon dioxide they release. Part of the revenue from selling emissions allowances returns to industry as grants for cleaner technology. The Commission expects the fund to receive around €40 billion this way between 2020 and 2030.
The grants target projects that are too new or too risky for banks and investors to back on their own. A steelmaker using hydrogen in place of coal, or a cement plant capturing carbon dioxide from its kilns, faces high upfront costs and uncertain returns. Public money is meant to cover part of that risk and help first-of-a-kind plants reach the market.
This round, launched in December 2025, opened with an indicative budget of €2.9 billion. The Commission's final selection comes to €3.4 billion. Even so, 358 applications arrive, and all five funding categories are oversubscribed.
Who gets through, and who waits
The largest share, about €1.58 billion, goes to 12 large projects in areas including chemicals, iron and steel, low-carbon fuels and industrial carbon capture. Another 17 medium-sized projects, in sectors such as cement, lime, glass and refining, share around €458 million.
Among the heavy industry names on the list is GravitHy, which plans a plant at Fos-sur-Mer in southern France to produce iron for steelmaking with hydrogen. In Spain, cement maker Molins and gas network operator Enagás are behind a project to capture around one million tonnes of carbon dioxide a year at a cement plant near Barcelona. Swedish company Cemvision, which makes lower-emission cement from industrial by-products such as steel slag, is also selected.
The other side of the ledger is just as revealing. A further 84 projects pass the Commission's evaluation but receive no money. They gain a quality label, known as the STEP seal, which signals to other funders that they meet EU standards. Another 160 proposals are directed to the European Investment Bank for advice on preparing their plans for future rounds.
A label, however, is not a loan. In steel, cement and chemicals, where a single plant can cost hundreds of millions of euros, the real question is whether national governments, banks or private investors step in where the EU budget stops.
Waiting is part of the process
Some projects already know the queue well. The Molins project held a STEP seal from an earlier Innovation Fund call before winning support this time. Its estimated cost is €590 million. For plans of that size, each extra funding round adds time to timelines that are already measured in years.
Timing matters because European heavy industry faces pressure from two directions. Carbon prices under the ETS raise the cost of making steel, cement and chemicals the traditional way. At the same time, the EU's carbon border levy, which entered its definitive phase in January 2026, aims to place a similar cost on certain imports. Both policies push companies towards cleaner production, but neither pays for the new plants.
The Commission estimates that the selected projects could avoid around 290 million tonnes of greenhouse gas emissions over their first ten years of operation. That figure depends on every project being built and running as planned, which is not yet certain.
What comes next
The selected companies now prepare grant agreements with the EU's climate and infrastructure agency, CINEA, and the Commission expects to confirm the results in the first quarter of 2027. Until then, the grants are offers rather than signed contracts.
The next round of calls is due in early December 2026, including a €1 billion topic for clean technology manufacturing. If this round is any guide, applicants will again outnumber the money available.
For Europe's energy-intensive industries, the lesson is less about which projects win and more about how many wait. The technology to cut emissions in heavy industry is increasingly ready. The capital to build it at scale remains the scarcer resource.
