Open letter: Protecting the Innovation Fund to ensure real climate action and support industrial transformation

The undersigned authors express concern that a provisional agreement on RePowerEU would weaken the EU Innovation Fund by allowing Member States to use its grants (60%) and front-loading ETS allowances (40%) to raise revenues. They argue that reducing the fund contradicts the needs of Europe's industrial transformation, noting that the fund's first call in 2021 was oversubscribed by more than 20 times. The letter highlights that nearly 50% of emissions reductions needed for 2050 goals depend on technologies not yet deployed at scale, particularly for hard-to-abate sectors like cement, steel, and chemicals. The authors warn that while the United States is implementing massive investment plans, the EU risks losing its industrial base and jobs if it fails to lower the cost of next-generation decarbonisation technologies. Finally, they urge Member States to reject the European Commission's proposal to auction allowances from the Market Stability Reserve, as this could increase emissions and lower the carbon price signal.

• The authors oppose the provisional agreement on RePowerEU because it would allow Member States to fund the initiative using 60% grants from the Innovation Fund and 40% from front-loading ETS allowances, which they claim will "weaken and reduce the size of the Innovation Fund".
• There is high demand for the Innovation Fund's support for clean technology, evidenced by the fact that the fund's first call in 2021 was "more than 20 times oversubscribed".
• The document cites International Energy Agency (IEA) estimates stating that almost 50% of the emissions reductions necessary to reach 2050 climate targets will rely on technologies that have not yet been deployed at scale, with particular importance for the chemicals, steel, and cement sectors.
• The authors warn that the EU risks losing its industrial base and millions of associated jobs if it fails to lower the cost of next-generation decarbonisation technologies, especially as the United States develops "massive investment plans" for industrial decarbonisation.
• The signatories urge Member States to reject the European Commission's proposal to auction allowances from the Market Stability Reserve, arguing this would lead to "additional emissions into the atmosphere" and a lower carbon price signal for clean investments.

APA

Clean Air Task Force (n.d.). Open letter: Protecting the Innovation Fund to ensure real climate action and support industrial transformation. https://cdn.catf.us/wp-content/uploads/2022/12/14120233/Open-letter_-Protecting-the-Innovation-Fund.pdf

Chicago

Clean Air Task Force. Open letter: Protecting the Innovation Fund to ensure real climate action and support industrial transformation. n.d. https://cdn.catf.us/wp-content/uploads/2022/12/14120233/Open-letter_-Protecting-the-Innovation-Fund.pdf.

Wikipedia

{{cite press release |author=Clean Air Task Force |title=Open letter: Protecting the Innovation Fund to ensure real climate action and support industrial transformation |url=https://cdn.catf.us/wp-content/uploads/2022/12/14120233/Open-letter_-Protecting-the-Innovation-Fund.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{cleanairtaskforcendopen, author = {{Clean Air Task Force}}, title = {{Open letter: Protecting the Innovation Fund to ensure real climate action and support industrial transformation}}, publisher = {Clean Air Task Force}, url = {https://cdn.catf.us/wp-content/uploads/2022/12/14120233/Open-letter_-Protecting-the-Innovation-Fund.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }