European Union


Clean Energy RD&D investments

The increase of phase one

The EC has increased funding of clean energy from its baseline of EUR 989 million per year to EUR 1827 million in the fifth year of its membership to MI. This amount includes both signed and unsigned projects of Horizon 2020 grants and other programmes related to clean energy innovation.

Future Funding

Horizon Europe, the EU’s €95.5bn research and innovation programme for 2021-2027, will increase research funding for the EU27 with a growing share devoted to climate action over this period, amounting to at least €33 billion [(up nearly 50%)].  These funds target primarily European research and innovation cooperation,  but will be – in most cases – opened to other countries.

EU funds currently programmed for energy in Horizon Europe, according to IEA methodology, amount to at least EUR 7.5 billion channelled directly to beneficiaries.  Energy innovation will also be indirectly supported through projects focusing on other priorities like advanced materials for energy, energy efficiency in data centres, efficient manufacturing etc.   EU budget also intends to contribute to new industrial partnerships in key sectors including hydrogen, aviation and steel and to public ones, like the clean energy transition and urban transitions.  The new European Innovation Council will mobilise around €10 billion to develop and scale up high-impact innovations with the potential to create new markets, or disrupt existing ones, including for energy.

Based on the trends to date, we estimate that clean energy innovation funding from Horizon Europe can go up to EUR 13 billion, which would indicate sustaining the high level of EU investment in clean energy research and innovation over the next programming period.

In addition to Horizon Europe funds, devoted to research and innovation, EU budget will also support higher TRL technologies through market pilots and demonstrators, seeking to create early markets for emerging technologies. Two sources of financing, not to be included in tracking commitments, but important to the overall ambition of Mi2.0 include:

The Innovation Fund is expected to provide a further €18 billion (depending on the ETS carbon price) until 2030 for the commercial demonstration of innovative low-carbon technologies, aiming to bring to the market industrial solutions to decarbonise Europe and support its transition to climate neutrality.  The European Investment Bank has actually become the EU Climate Bank, aligning all of its activities within the objectives of the Paris Agreement, committing to support €1 trillion of investments in climate action and environmental sustainability from now until 2030. High risk innovation projects will benefit from the EU budget guarantee under InvestEU. The innovative cleantech and energy projects are expected to be a sizeable part of these programmes’ portfolios and mobilise considerable interest among private investors.