The EU Innovation Fund is a "high potential instrument with a limited development" (ECA report)

"The innovation fund is a valuable instrument with high potential to promote EU competitiveness and decarbonisation. However, slow deployment of funds, project failures and the lack of a clear allocation strategy mean it is not yet delivering at the scale Europe needs", said João Leão, lead author of the European Court of Auditors new special report, on 19/03/2026.

According to it, focused on the Innovation Fund launched in 2020, its "deployment has been limited, and its contribution to reducing greenhouse gas emissions has remained modest".

"With a €40Bn estimated budget up to 2030 (based on the sale of 530 million ETS allowances for the period 2020 to 2030), the fund aims to bring clean technologies to market and support the transition to a climate-neutral economy", the ECA said.

However, "after nearly five years, less than 1% of the fund's budget has been paid out (€331,8M out of almost €13Bn collected, so 2,7%). The Innovation Fund is financed through the emission trading system, which creates volatility and uncertainty about the availability of resources", continued João Leão.

He…