The European Commission has announced a landmark €2.9 billion (USD $3.3 billion) investment to accelerate the deployment of net zero technologies, selecting 61 large-scale projects across 18 countries and 19 industrial sectors. The funding, sourced from revenues generated by the EU Emissions Trading System (EU ETS), underscores the bloc’s determination to translate its climate ambitions into industrial competitiveness and global leadership in clean technology.

Turning Climate Ambition into Industrial Reality

The selected projects are projected to cut 221 million tonnes of CO₂ equivalent (CO₂e) over their first decade of operations equivalent to removing nearly 50 million cars from the road. Each project was evaluated for its potential to reduce emissions, degree of innovation, scalability, cost efficiency, and maturity, ensuring a mix of both pioneering technologies and replicable commercial models.

Key focus areas include:

Decarbonizing energy-intensive industries, such as steel, cement, and chemicals
Renewable energy and energy storage systems
Net zero mobility and sustainable building solutions
Cleantech manufacturing
Industrial carbon capture, utilization, and storage (CCUS)

“Today’s selection shows that Europe is turning its climate ambitions into industrial reality,” said Wopke Hoekstra, EU Commissioner for Climate, Net Zero and Clean Growth. “By investing in home-grown solutions, we are building energy resilience, creating quality jobs, and ensuring that Europe remains competitive in the economy of tomorrow.”

Read more: FirstBank Ghana Positions Responsible Banking at the Core of its Sustainability Vision

Funded by Europe’s Carbon Market

The EU ETS, launched in 2005, remains the cornerstone of the EU’s climate policy, placing a price on carbon emissions for high-emitting sectors, including energy generation, steel, cement, and aviation. Companies must hold allowances for each tonne of CO₂ they emit—creating both a financial incentive to decarbonize and a revenue stream to reinvest in green technologies. Recent reforms to the ETS expanded its scope and tightened emissions caps, with revenues now projected to reach €40 billion between 2020 and 2030. Part of these funds flow into the EU Innovation Fund, one of the world’s largest financing programs for net zero industrial transformation. Since its inception, the Innovation Fund portfolio has grown to 270 projects, representing €15.6 billion in total investment commitments to date.

Anchoring the Green Deal Industrial Plan

The Innovation Fund sits at the heart of the European Green Deal Industrial Plan (EGDIP), the EU’s blueprint to boost domestic cleantech production and counter growing competition from the U.S. Inflation Reduction Act and China’s green industrial policies.

The latest round of funding follows the December 2024 call for proposals, which offered €4.6 billion in total decarbonization support, divided into:

€2.4 billion for general net zero technologies
€1 billion for electric vehicle battery cell manufacturing
€1.2 billion for renewable hydrogen projects

The EU confirmed that grant agreements for hydrogen and battery projects will also be signed later this year, ensuring a pipeline of investment across multiple sectors of the energy transition. The call drew 359 applications requesting over €21.7 billion in funding nearly eight times the amount available highlighting both the scale of corporate ambition and the growing demand for public-private collaboration in decarbonization.

Explore OneStop ESG Marketplace: Renewable Energy

Building Europe’s Clean Tech Leadership

The announcement sends a strong signal to global markets that the EU intends to anchor its climate targets in industrial policy. By backing large-scale, commercially viable technologies, Brussels aims to secure strategic supply chains, de-risk private investment, and accelerate the deployment of solutions critical to achieving climate neutrality by 2050. The Commission emphasized that these investments will also support job creation, energy security, and cross-border innovation clusters, positioning Europe as a hub for sustainable industry.

As Commissioner Hoekstra noted, “The response to this call demonstrates the strength of our innovators and the determination of our companies to lead the global race for net-zero technologies.”

A Step Toward Climate-Driven Competitiveness

By using carbon market revenues to finance next-generation clean technologies, the EU is effectively turning pollution costs into industrial opportunity. The 61 selected projects spanning from advanced renewable hydrogen facilities and carbon capture hubs to energy storage and low-carbon construction materials represent Europe’s most coordinated push yet toward industrial decarbonization. With €2.9 billion now flowing into real-world projects, the Innovation Fund is proving to be more than a policy tool it is becoming a catalyst for Europe’s economic renewal, showing how climate finance can drive innovation, growth, and competitiveness in the global race to net zero.

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.

Stay informed with the latest insights on OneStop ESG News.

Discover meaningful career opportunities on OneStop ESG Jobs.