Commission Announces €1 Billion Pilot Auction for Industrial Heat Decarbonisation
- The auction has a €1 billion budget to support electrification and renewable heat technologies.
- Funded by the EU Emissions Trading System, it opens to bidders in December 2025.
- Projects can include heat pumps, boilers, plasma torches, resistance and induction heating.
- The auction targets CO2 emissions from industrial process heating in sectors like chemicals.
Overview
The European Commission has published the final Terms and Conditions for its first pilot auction aimed at decarbonising industrial process heat. This initiative, part of the Clean Industrial Deal, is supported by the Innovation Fund and has a budget of €1 billion.
Funding and Technologies
Funded by the EU Emissions Trading System, the auction supports projects that electrify industrial process heat using technologies like heat pumps, boilers, plasma torches, resistance heating, and induction heating. It also backs projects utilizing direct renewable heat, such as solar thermal or geothermal, and hybrid projects combining different technologies.
Participation and Scope
The auction is open to projects of all sizes across the European Economic Area and is expected to open to bidders in early December 2025. Successful bidders will receive a fixed premium subsidy linked to each tonne of CO2 emissions abated for up to five years.
Objective
This auction targets one of the largest sources of EU industrial CO2 emissions: process heating. By closing the cost gap between renewable and fossil fuel-based solutions, it aims to enhance the competitiveness of clean industries, reduce greenhouse gas emissions, and support Europe's climate neutrality goals by 2050.
Source: European Innovation Fund