To achieve the strategic long-term vision for a prosperous, modern, competitive and climate neutral economy by 2050 and reach the EU's overall greenhouse gas emissions reduction target for 2030, we need to invest today in the low-carbon technologies of tomorrow. Innovative low-carbon technologies are vital for reducing greenhouse gas emissions and ensuring a healthy environment for the next generations. Promising technologies, however, often fail to reach the market due to a lack of resources to demonstrate their capabilities on a large scale. Funding first-of-the-kind innovative technologies remains a key issue as they entail a high risk for the private sector.
To address this challenge, the EU will invest a part of the revenues from the EU Emissions Trading System (EU ETS) into low-carbon technology demonstration projects, through a new funding instrument – the Innovation Fund. The Fund will pool together resources amounting to around €10 billion, depending on the carbon price: at least 450 million allowances from EU ETS. It will support the demonstration of innovative technologies and breakthrough solutions in energy intensive industry, innovative renewables, energy storage, and carbon capture use and storage.
The session will focus on the new funding mechanism for innovative low-carbon projects. Furthermore, the session will also take stock of the experience in funding the low-carbon energy transition and will highlight how the public investment tools are necessary to reduce the risks when investing in innovative RES and CCS projects.