As part of the Innovation Fund, the European Commission has published the following call for proposals: “Fixed premium auction call 2025 for Industrial Process Heat Decarbonisation” (INNOVFUND-2025-AUC-HEAT).

In addition to traditional calls, funding under the Innovation Fund may be awarded through auctions. which support projects after their launch and award grants following a competitive, price-based procedure.

“Call for tenders 2025 for Industrial Process Heat Decarbonisation” is a price-based auction. The funding does not cover investment costs, but provides a “fixed premium” per tonne of CO₂ avoided (thanks to decarbonised industrial heat production), which will only be supplied once the plant becomes operational.

The auctions aim to make it economically viable for businesses to transition from heat generated by fossil fuels to clean heat, either electric or from renewable sources. Today, producing clean heat involves higher costs than using fossil fuels. To bridge this gap, the European Union is intervening through the mechanism of the competitive bidding.

The call for proposals covers three topics and has a total budget of €1 billion, divided between the topics as follows:

• Medium Temperature Heat — 3 to 5 MW: 150 million euros;
• Medium Temperature Heat — Above 5 MW: 350 million euros;
• High Temperature Heat: 500 million euros.

The deadline for submitting projects is 19 February 2026, 5 p.m. (Brussels).