Designing a €100bn Industrial Decarbonisation Bank to Deliver Operating Projects

The policy brief argues that the proposed €100 billion Industrial Decarbonisation Bank (IDB) must move beyond fragmented grants to a coordinated system of carbon contracts for difference (CCfDs), project development support, and shared infrastructure funding. It highlights a significant delivery gap in existing EU programs, noting that only 16 of 208 Innovation Fund grant agreements had entered operation by June 2025. To resolve this, the author recommends technology-neutral auctions with sector-specific caps, two-way CCfD settlements referenced to EU ETS prices, and the sequencing of infrastructure delivery to align with industrial final investment decisions (FID).

• Existing EU industrial decarbonisation support is fragmented, leading to a high rate of project attrition before final investment decision (FID). For the Innovation Fund, a review of 208 signed grant agreements by June 2025 revealed that only 45 had reached financial close and 16 had entered operation.
• The cost of decarbonising the four largest energy-intensive industries (chemicals, basic metals, non-metallic minerals, and paper) is estimated at approximately €500 billion over the next 15 years, far exceeding the IDB's €100 billion funding.
• The IDB should employ a coordinated system where project development support and infrastructure selection precede or run in parallel with CCfD rounds to ensure bidders have cost certainty and credible infrastructure assumptions.
• To prevent lower-cost projects from being skipped while ensuring broad sectoral coverage, the IDB should use a two-pool auction: a base pool capped by a sector's share of EU ETS emissions and an additional pool available to all sectors.
• The document recommends two-way CCfD settlements referenced to EU ETS prices rather than administrative trajectories, allowing the IDB to recover surplus payments when market prices exceed the strike price.
• Shared infrastructure, particularly CO₂ transport and storage, should be funded based on system value and deliverability, with construction support contingent on confirmed CCfD awards to ensure a viable user base.
• To reduce delivery risk, the IDB should require a project maturity qualification at entry and implement bid bonds at submission and completion guarantees at FID.
• The IDB should provide limited funding for front-end engineering design (FEED)-equivalent engineering to lower the barrier for developers to submit bankable bids.

APA

Clean Air Task Force (2026). Designing a €100bn Industrial Decarbonisation Bank to Deliver Operating Projects. https://www.catf.us/resource/designing-a-100bn-industrial-decarbonisation-bank-to-deliver-operating-projects/

Chicago

Clean Air Task Force. Designing a €100bn Industrial Decarbonisation Bank to Deliver Operating Projects. 2026. https://www.catf.us/resource/designing-a-100bn-industrial-decarbonisation-bank-to-deliver-operating-projects/.

Wikipedia

{{cite report |author=Clean Air Task Force |title=Designing a €100bn Industrial Decarbonisation Bank to Deliver Operating Projects |date=14 July 2026 |url=https://www.catf.us/resource/designing-a-100bn-industrial-decarbonisation-bank-to-deliver-operating-projects/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cleanairtaskforce2026designing, author = {{Clean Air Task Force}}, title = {{Designing a €100bn Industrial Decarbonisation Bank to Deliver Operating Projects}}, institution = {Clean Air Task Force}, year = {2026}, month = jul, url = {https://www.catf.us/resource/designing-a-100bn-industrial-decarbonisation-bank-to-deliver-operating-projects/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }