EU Awards €400 Million for Industrial Heat Decarbonisation

The European Commission has awarded around €400 million (US$465 million) to 65 industrial decarbonisation projects across 10 European countries under its first Innovation Fund Heat Auction. The initiative aims to reduce industrial heat emissions by replacing natural gas-based systems with cleaner technologies including heat pumps, solar thermal systems, resistance heating and hybrid solutions. The selected projects are expected to avoid more than 6.6 million tonnes of CO2 emissions over the next decade while generating around 16.3 terawatt-hours of decarbonised heat in their first five years of operation. Sectors benefiting from the funding include steel, glass, ceramics, construction materials, textiles, pharmaceuticals and food processing. The grants will be financed through revenues generated by the EU Emissions Trading System (ETS), reinforcing the bloc’s strategy to link carbon pricing with industrial sustainability investments. The European Commission has also announced a second Heat Auction worth €1 billion for 2026 as Europe accelerates efforts to strengthen energy security, industrial competitiveness and climate resilience.