EU Innovation Fund plans €1 billion heat auction for December 2026

The Innovation Fund plans a €1 billion heat auction for December 2026, covering three technology groups. The programme is called the Innovation Fund 2026 Heat Auction (IF26 Heat Auction). Its published scope includes nuclear technologies for the first time.

The auction forms part of the Innovation Fund and was announced in the Clean Industrial Deal. It is a planned funding mechanism, rather than a final award to selected projects. The stated budget is to be raised from auctioning EU Emissions Trading System allowances.

Eligibility reaches lower heat temperatures

The auction is intended to support technologies that reduce emissions from process heat used in manufacturing. Process heat means energy used to produce the medium and high temperatures required by industrial activities. The source names chemicals, pulp and paper, steel, food and beverage, and cement as examples of relevant sectors.

Eligibility is set to expand to include some projects using heat from 80°C. The source does not specify which project types will qualify at that temperature threshold. Final T&Cs were prepared after public consultations involving industry and stakeholders, but the detailed conditions are not included in the source material.

Three technology groups enter scope

The first group covers electrified technologies, including heat pumps, thermal storage, plasma torches and electric boilers. A second group covers direct renewable heat, with solar thermal and geothermal given as examples. Nuclear technologies, including small modular reactors, are included for the first time in this auction.

These categories address different ways of supplying heat for manufacturing processes. The stated policy aims include increasing investment in homegrown clean energy solutions, strengthening resilience and reducing energy prices. Those aims describe the programme's intended effects; the source does not quantify expected investment, emissions reductions or price changes.

Flexible projects may gain an incentive

The auction is also set to provide further incentive for flexibility solutions. The stated purpose is to reduce pressure on the electricity system, a consideration relevant to projects that rely on electrification. The source does not detail how the incentive will be calculated or how projects will demonstrate flexibility.

A previous pilot, IF25, selected 65 proposals for funding. That figure describes the pilot's selected proposals; it is not a stated target or expected outcome for the planned auction. The source does not identify the recipients or provide funding amounts for those proposals.

The planned €1 billion budget may receive additional national contributions through the Auction-as-a-Service feature. The source says that approach has been successful in previous hydrogen auctions, without naming those auctions or giving their contribution amounts. Further details on national participation and the final conditions remain unspecified.

The source identifies the Innovation Fund as the programme framework and December 2026 as the planned launch timing. It describes the auction as planned and supplies no final award decisions. The next concrete details to follow are the final T&Cs and any national contributions announced through Auction-as-a-Service. The source gives no company response because it concerns a public funding programme, not a company dispute.