New Funding Opportunity for
Industrial Heat Decarbonisation

The European Commission is launching a new Innovation Fund pilot auction focused on industrial process heat decarbonisation.

This is a unique opportunity for industrial players planning large-scale heat decarbonisation investments. With up to €1 billion in support, this competitive scheme will accelerate the shift from fossil-based heat to electrified and renewable heat solutions in hard-to-abate industries.

The Scope of the Heat Auction

Following the success of the Hydrogen Auction, the first Pilot Heat Auction was announced under the Clean Industrial Deal as a pilot for the new Industrial Decarbonisation Bank and is expected to be launch at the end of 2025. 

The Heat Auction aims to cut CO₂ emissions from industrial heat by funding innovative projects that replace fossil fuels with:
Electrified heat (e.g., high-temperature heat pumps, electric boilers, resistance / induction heating, plasma heating)
Direct renewable heat (e.g., industrial solar thermal, deep geothermal).

Projects must reach a minimum temperature of 100ºC or size of 3 MW th. Funding is awarded competitively based on the lowest bid for a subsidy per tonne of CO2 avoid-ed (Auction-as-Service mechanism). The total available budget is EUR 1 billion, split across three separate topics: