The EU is providing €400 million for 65 projects to decarbonise heat production; Italy not on board

Brussels –

The European Commission today (22 May) has selected 65 projects that will receive funding under the Innovation Fund’s heat auction (Innovation Fund 2025 Heat Auction – IF25). Launched in December 2025 by the European Commission, this €1 billion auction aims to support companies in transitioning from fossil-fuel-generated industrial heat to “clean heat” solutions, such as electrification and renewable sources. The projects selected today will receive nearly €400 million in EU funding from IF25, drawn from the European Union Emissions Trading Scheme (ETS), and come from 10 EU countries: Austria, Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Portugal, Slovenia, and Spain. Italy, however, is not part of the group. 

Over the next five years, these projects will utilise a wide range of technologies to decarbonise industrial heat production and accelerate the market uptake of electric heating solutions and heat generated directly from renewable sources. In particular, thanks to the use of innovative technologies, they will prevent the emission of over 6.6 million tonnes of CO2 over 10 years by replacing natural gas-fired heat production systems. It is estimated that, overall, they will produce around 16.3 terawatt-hours (TWh) of decarbonised heat in the first 5 years of operation, based on a thermal capacity of 766 megawatts (MW). This is equivalent to replacing over 1.5 billion cubic metres of natural gas in five years, a figure comparable to the annual consumption of around 4 million EU households. 

The Commission explained that the projects cover a wide range of technologies and sectors, with most relying on direct or indirect resistance heating, while others incorporate technologies such as heat pumps, solar thermal, electromagnetic and dielectric heating, and hybrid technologies.

In terms of the industrial sectors involved, the projects cover the pulp and paper industry, as well as glass, ceramics, construction materials, and steel, “sectors that have so far been under-represented in the Innovation Fund’s portfolio,” but also include the food and drink, textile, and pharmaceutical industries. The auction was structured around three “themes”, based on temperature level and installation capacity: five projects were selected under the high-temperature heat theme, for a total amount of €62.1 million; 44 projects were selected under the medium-temperature heat theme with a capacity exceeding 5 MW, for a total budget of €286.5 million; 16 projects were selected under the medium-temperature heat theme with a capacity between 3 and 5 MW, for a total of €47.9 million. 

The European Climate, Infrastructure and Environment Executive Agency

(CINEA) will now begin the formal preparation of grant agreements for the successful applicants.