Innovation Fund – evaluation of its operation

Carbon Market Watch critiques the EU Innovation Fund for disproportionately funding carbon capture and storage (CCS) and carbon capture and utilisation (CCU), particularly in the cement and lime sector. The organization argues that the fund should prioritize technologies that encourage material savings and explicitly include material saving as a mandatory assessment criterion for projects.

• Between 2020 and 2022, the Innovation Fund allocated more than €2.5 billion of its €6.4 billion total to CCS and CCU projects, meaning over one third of the total budget went to these technologies.
• The cement and lime sector is the primary beneficiary of the fund, receiving at least €2.5 billion in grants from 2020 to 2023, with the majority of projects focusing on CCS deployment rather than clinker substitution.
• Other significant beneficiaries of the fund between 2020 and 2022 include the chemicals industry (nearly €1 billion), the refineries sector (approximately €500 million), and the steel industry (nearly €400 million).
• The document highlights a history of failed investments in CCS via the Innovation Fund's predecessor, NER300, where the Court of Auditors found in 2018 that no financed CCS projects were successfully implemented, resulting in €244 million in wasted funds.
• Carbon Market Watch recommends that the Innovation Fund's rules be amended to make material saving a mandatory assessment criterion with equal weight to the degree of innovation.

APA

Carbon Market Watch (2025). Innovation Fund – evaluation of its operation. https://carbonmarketwatch.org/wp-content/uploads/2025/07/20250630-CMW_Innovation-Fund-call-for-evidence.pdf

Chicago

Carbon Market Watch. Innovation Fund – evaluation of its operation. 2025. https://carbonmarketwatch.org/wp-content/uploads/2025/07/20250630-CMW_Innovation-Fund-call-for-evidence.pdf.

Wikipedia

{{cite press release |author=Carbon Market Watch |title=Innovation Fund – evaluation of its operation |date=July 2025 |url=https://carbonmarketwatch.org/wp-content/uploads/2025/07/20250630-CMW_Innovation-Fund-call-for-evidence.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{carbonmarketwatch2025innovation, author = {{Carbon Market Watch}}, title = {{Innovation Fund – evaluation of its operation}}, publisher = {Carbon Market Watch}, year = {2025}, month = jul, url = {https://carbonmarketwatch.org/wp-content/uploads/2025/07/20250630-CMW_Innovation-Fund-call-for-evidence.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }