EU Commission Awards €400 Million to Industrial Heat Decarbonization Projects
The European Commission announced that it has selected 65 projects to receive nearly €400 million (USD$465 million) in funding under the Innovation Fund Heat Auction, the EU’s first auction designed to accelerate the deployment of clean heat technologies across European industry.
According to the Commission, the selected projects will avoid more than 6.6 million tons of CO2 emissions over 10 years by replacing natural gas-fuelled heat production systems, and are expected to produce around 16.3 TWh of decarbonized heat over their first 5 years of operation, equivalent to replacing over 1.5 billion cubic meters of natural gas, roughly comparable to the annual consumption of 4 million EU households.
The heat auction was launched as part of a series of cleantech funding opportunities announced by the European Commission in December 2025. The initiative is financed by the EU’s Innovation Fund, from funds raised through the EU Emissions Trading System (EU ETS), the bloc’s cap-and-trade carbon market aimed at reducing greenhouse gas emissions from major industries.
The Commission said that the auction attracted 85 applicants, with the selected projects ranging in size from 3 MWth to 45 MWth and grant awards ranging from €444,000 to €37.1 million.
The selected projects span 10 European Economic Area countries – Austria, Belgium, Czechia, Denmark, France, Germany, Hungary, Portugal, Slovenia and Spain – and will deploy a broad range of technologies, including direct and indirect resistance heating, heat pumps, solar thermal, electromagnetic and dielectric heating, and hybrid systems, across sectors including pulp and paper, glass, ceramics and construction materials, iron and steel, food and beverages, textiles and pharmaceuticals, according to the EC.
The Commission said that the European Climate, Infrastructure and Environment Executive Agency (CINEA) will now begin preparing grant agreements with the selected projects, with agreements expected to be signed in the second half of 2026. Selected projects will be required to reach financial close within two years of signing and begin operations within four years.
Wopke Hoekstra, European Commissioner for Climate, Net Zero and Clean Growth, said:
“The projects span technologies from heat pumps and solar thermal to electric resistance heating. Collectively, they are expected to replace more than 1.5 billion cubic metres of natural gas over the next five years — roughly equivalent to the annual gas consumption of 4 million EU households. A win for climate, competitiveness, and energy independence.”