European Innovation Fund has been saved
European Innovation Fund
As many Irish businesses pursue strategies to enhance their environmental sustainability, funding instruments available to support these activities are often overlooked. There is an opportunity for Irish companies working on innovative “green” projects to benefit from a new funding mechanism. The Innovation Fund will support projects that help the European Commission to achieve ambitious long term targets in reducing greenhouse gas emissions. The first call will focus on large projects, in excess of €7.5 million, with a second call expected to be opened later in the year supporting smaller projects. The call seeks a variety of projects balanced across eligible sectors (energy intensive industries, renewable energy, energy storage, CCS and CCU) and Member States.
With up to 60% of eligible operational and capital expenditure being met by EU funding, any large projects in development should be assessed with regard to its potential to qualify.
European Innovation Fund call published
The European Commission has published the first call for proposals in the new Innovation Fund. With a 10-year budget likely amounting to EUR 10 billion, the Innovation Fund is the European Commission’s largest funding program aiming to reduce greenhouse gas (GHG) emissions. The first call has a budget of over €1 billion and the deadline for submission of expressions of interest, for large projects, is 29 October 2020.
Key points to note
- It is targeted at innovative projects aiming to significantly reduce GHG emissions.
- Single companies or consortia can apply.
- The first call is only for larger projects > €7.5 million.
- A call for projects < €7.5 million is expected in Q4 2020/Q1 2021.
- The project should have an advanced degree of maturity, where there is high potential, but insufficient maturity, Project Development Assistance may be available.
- The budget is EUR 1 billion for full projects, and EUR 8 million for Project Development Assistance.
- Deadline for expression of interest: 29 October 2020.
Paris Agreement objectives
The Innovation Fund will be one of the European Commission’s key funding instruments for delivering its commitments under the Paris Agreement, and supporting its strategic vision of a climate neutral Europe by 2050, as also recognised in the European Green Deal.
The Innovation Fund will focus on:
- Innovative low-carbon technologies and processes in energy intensive industries, including products substituting carbon intensive ones
- Carbon capture and utilisation (CCU)
- Construction and operation of carbon capture and storage (CCS)
- Innovative renewable energy generation
- Energy storage
What will be funded?
The Innovation Fund aims to support highly innovative technologies and flagship projects contributing to the EU economy’s green recovery, helping businesses to invest in clean energy and industries to boost economic growth, create local jobs and give a competitive advantage to industry in the EU.
The Innovation Fund aims to finance a varied pipeline of projects, achieving an optimal balance across a wide range of innovative technologies in all eligible sectors in EU member states, Iceland and Norway. At the same time, the projects need to be sufficiently mature in terms of planning, business model, as well as financial and legal structure.
The current call aims to finance large projects. For projects with total capital costs below €7.5 million, a separate call will be published, expected by the end of 2020. The Innovation Fund will finance up to 60% of the extra CAPEX compared to the reference technology. In addition, the extra OPEX compared to reference technology and loss of profit will be funded for a maximum of 10 years. The total funding amount may total over EUR 300 million per project.
If you have any questions concerning the items in this alert, please contact your usual tax or funding consultant at our Deloitte office or a member of our Gi3 Ireland team below.