EU: €1bn pilot auction to decarbonise industrial heat

€1 billion: this is the amount of the first pilot auction for the decarbonisation of industrial heat. The final terms and conditions were published by the European Commission's Directorate-General for Climate Action on 10/10/2025. Applications will open at the beginning of December 2025.

The funding comes from the Innovation Fund. Industrial sectors using process heat are eligible. Eligible technologies include heat pumps, electric boilers, plasma torches, resistance heating, induction heating, solar thermal systems, geothermal systems and hybrid projects.

Under the scheme, a fixed premium proportional to each tonne of CO₂ avoided will be paid for a maximum of five years.

" This auction is a crucial step towards creating the Industrial Decarbonisation Bank. It paves the way for increased investment in industrial electrification technologies, which are key to industrial decarbonisation. I urge industry leaders to join us in realising the significant potential for cost-effective emissions reductions through electrification, and to submit their bids," says Kurt Vandenberghe, Director…