The EU allocates €400 million to decarbonize heat production through 65 clean heat technology projects across 10 European Economic Area countries. The European Commission selected the projects under the first EU-wide Innovation Fund Heat Auction, aimed at accelerating clean industrial heat solutions and reducing dependence on fossil-fuel-based heat systems. The funding comes from the EU Emissions Trading System and is designed to support technologies that can replace natural gas-based heat generation in European industry. The selected projects are expected to avoid more than 6.6 million tonnes of CO₂ emissions over the next 10 years.

Clean Heat Projects Across 10 Countries

The projects will be deployed across Austria, Belgium, Czechia, Denmark, France, Germany, Hungary, Portugal, Slovenia, and Spain. Italy is not included in the selected list, even as the EU pushes wider industrial decarbonization across the bloc.

Together, the selected projects are expected to produce around 16.3 terawatt-hours of decarbonized heat in their first five years of operation. The Commission said this is equivalent to replacing more than 1.5 billion cubic meters of natural gas, roughly equal to the annual consumption of 4 million EU households.

Technologies and Industrial Sectors Covered

The selected projects cover a mix of technologies, with many using direct or indirect resistance heating. Other supported technologies include heat pumps, solar thermal systems, electromagnetic and dielectric heating, and hybrid clean heat technologies.

The projects will support sectors such as pulp and paper, glass, ceramics, construction materials, iron and steel, food and beverages, textiles, and pharmaceuticals. These are industries where heat demand is high, and fossil fuel replacement is often technically difficult.

Key funding categories include:

• High-temperature heat: 5 projects invited for €62.1 million in support.
• Medium-temperature heat above 5 MW: 44 projects invited with a total budget of €286.5 million.
• Medium-temperature heat between 3-5 MW: 16 projects invited for €47.9 million.
• Spain’s role: Spain has 18 selected electrification projects, making it one of the major beneficiaries.

Also Read: Climate Finance Hits $136.7 Billion In 2024, Yet Poorest Nations Get Just 7%

Why This Matters for Europe’s Clean Industry Push

Industrial heat is one of the harder areas to decarbonize because many factories still depend on gas-fired systems for process heat. By funding clean heat technologies, the EU is trying to reduce industrial emissions while also improving energy security and competitiveness.

The selected projects must reach financial close within two years of signing grant agreements and become operational within four years. Grant agreements are expected to be signed in the second half of 2026, with the final list of signed projects expected in the fourth quarter of 2026.

The Commission has also announced preparations for a second heat auction in 2026 with a planned budget of €1 billion. Overall, the EU allocates €400 million to decarbonize heat production at a time when Europe is trying to cut emissions, reduce gas dependency, and speed up the shift toward cleaner industrial energy systems.

Also Read: China Installs Record 16 MW Floating Turbine To Expand Offshore Wind Capacity