EU invests 400m in electrified industrial heat systems

The European Commission has announced the selection of 65 projects across Europe to receive approximately €400 million in funding to advance cleaner heat production technologies and reduce industrial emissions. This funding is part of the first Innovation Fund Heat Auction, a pan-European initiative aimed at expediting the adoption of low-carbon industrial heating systems.

These projects, which are spread across 10 countries such as Germany, France, Spain, and Denmark, encompass a variety of technologies including industrial heat pumps, solar thermal systems, and electric resistance heating. Collectively, they are projected to prevent over 6.6 million tonnes of CO2 emissions over the next decade.

For readers of eeNews Europe, this initiative underscores the increasing commercial and political support for industrial electrification and the decarbonisation of process heat. It also presents significant opportunities for companies involved in power electronics, thermal management systems, industrial automation, and renewable energy technologies.

Electrification Trend

The European Commission estimates that these projects will produce approximately 16.3TWh of decarbonised heat in their initial five years of operation, with a combined thermal capacity of 766MW. This is anticipated to displace more than 1.5 billion cubic meters of natural gas, equivalent to the annual gas consumption of about 4 million households in the EU.

Industrial sectors targeted by the programme include pulp and paper, glass, ceramics, construction materials, iron and steel, food and beverage, textiles, and pharmaceuticals. The funding for these projects is sourced from revenues generated by the EU Emissions Trading System (ETS) and is part of the broader Innovation Fund, which has a budget of around €40 billion for the period between 2020 and 2030.

Path to Decarbonisation

Wopke Hoekstra, a key figure in the initiative, expressed enthusiasm, stating, “This is a real game changer for EU decarbonisation. The projects encompass a range of technologies from heat pumps and solar thermal to electric resistance heating. Together, they are projected to displace more than 1.5 billion cubic meters of natural gas over the next five years — roughly equivalent to the annual gas consumption of 4 million EU households. A victory for climate action, competitiveness, and energy independence.”

Following the selection, the projects will proceed to grant agreement negotiations with the European Climate, Infrastructure, and Environment Executive Agency (CINEA), with agreements expected to be finalized in the latter half of 2026. The projects are required to achieve financial closure within two years and commence operations within four years of signing the agreements.

The European Commission has already initiated preparations for a second Heat Auction round in 2026, with a proposed budget of €1 billion, reflecting strong interest from the industry. The initial call attracted 85 applications with bids totaling nearly €10 billion for decarbonisation support.