IOGP Europe’s response to the public consultation on the evaluation of Innovation Fund’s operation

 IOGP Europe welcomes the opportunity to provide feedback to the public consultation evaluating the Innovation Fund’s operation, as an association representing companies investing in low-carbon technologies and with first-hand experience in applying and benefiting from this stream of EU funding. Having awarded funding to over 200 innovative projects across the European Economic Area (EEA) since its establishment, with a total allocation of approximately €12 billion, the Innovation Fund stands as a pillar for EU’s industrial decarbonization. We believe the fund should keep its core focus on decarbonization technologies, for instance in the context of the future Industrial Decarbonization Bank, without redirecting funds to other areas. 

• We call for a more technology neutral approach

The Clean Industrial Deal sets a new course for European climate and energy policies, equipping the EU to reach climate goals while reducing regulatory complexity, supporting innovation, and strengthening Europe’s energy and industrial base. In this context, we emphasize the importance of embedding the principle of technology neutrality across policy instruments starting from the Innovation Fund, enhancing its reach and effectiveness in supporting multiple decarbonization pathways. 

• We call for increased funding 

The Innovation Fund is underfunded, with oversubscription showing the high demand for financing, leaving many valuable projects without support. This hampers decarbonization efforts and delays critical GHG reductions. To meet the EU's ambitious climate goals, IOGP Europe calls for a significant increase in the Fund's budget, including revenues in the next EU budget (MFF) from the Carbon Border Adjustment Mechanism (CBAM) collected by the EU. 

•  We call for less administrative burden 

Moreover, the Fund's complexity and administrative burden hinder its effectiveness. The application process remains cumbersome, especially for first-of-a-kind projects. Simplifying application procedures and reducing documentation requirements would streamline access, enabling more efficient project delivery. Additionally, the introduction of Carbon Contracts for Difference (CCfDs) could provide crucial financial support to bridge gaps in current market conditions, offering a transformative way to de-risk key value-chains, such as carbon capture and storage (CCS). This is fully in line with the IOGP Europe proposal on a European CCS Bank. 

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