The IF25 Clean Heat Auction: Driving Europe’s Industrial Decarbonisation

The European Commission has published the final Terms & Conditions for the Innovation Fund Clean Heat Auction (IF25), a €1 billion call designed to accelerate the decarbonisation of industrial process heat across Europe.
The scheme aims to support industries in replacing fossil-based heat with renewable and electrified solutions, strengthening the EU’s path towards climate neutrality.

Clean Heat Auction at a Glance

Application window (expected): Early December 2025 to February 2026
Total budget: €1 billion
Programme: Innovation Fund (IF25)
Support duration: Up to five years following the start of operations
Payments: Every 6 months based on verified quantities of electrified/direct renewable heat

Eligible Project Types

Funding is available for projects focused on:

Electrification of process heat through technologies such as heat pumps, direct and indirect resistance heating, electromagnetic or dielectric heating and plasma heating.
Direct-renewable industrial heat generation, including solar thermal and geothermal systems.

Applicants must demonstrate the production of electrified or renewable heat (MWhth) and quantify the corresponding avoided greenhouse gas emissions using the applicable emission factors.

Funding Model

Projects will compete by offering a price per tonne of CO₂ avoided.
The funding structure includes the following features:

Guarantee: 6% of the requested grant, submitted two months after project selection
Payments: Linked to verified quantities of produced heat every six months
Flexibility: Provisions for heat storage and operational ramp-up to accommodate industrial realities.

Three Funding Baskets

Projects will be evaluated based on their technical, financial and operational maturity. Funding is distributed across three categories:

Medium temperature (100–400 °C) — Projects ≥ 3 and < 5 MWth | Budget €150 million
Medium temperature (100–400 °C) — Projects ≥ 5 MWth | Budget €350 million
High temperature (> 400 °C) — Projects ≥ 3 MWth | Budget €500 million

Why It Matters

Process heat represents a major share of industrial energy consumption in Europe. The IF25 Clean Heat Auction offers a strategic opportunity for energy-intensive sectors to reduce emissions and energy costs while strengthening competitiveness in a decarbonised economy.

By fostering large-scale deployment of renewable and electrified heat technologies, the European Commission is laying the groundwork for a more sustainable and resilient industrial base.

Partner with Innovayt

The IF25 Clean Heat Auction represents a significant opportunity to scale up renewable and electrified industrial heat solutions in Europe.
At Innovayt, we support clients throughout the process: from concept development and financial structuring to proposal submission, ensuring that projects are strategically aligned with Innovation Fund priorities.

Our multidisciplinary team combines deep knowledge of EU funding instruments with technical and financial expertise in clean energy and industrial innovation.

If you are considering applying, our experts can help you maximise your project’s competitiveness and impact.

At Innovayt, we help organisations turn strong ideas into fundable, high-impact proposals.

Ready to explore how we can support your participation in IF25 Clean Heat Auction?