The European Commission has published the final rules for a €1 billion Europe-wide auction to support projects that cut carbon emissions from industrial process heat, with bidding expected to open in early December 2026.
Industrial process heat is the high temperatures used in manufacturing — for example in chemicals, steel, cement, food and drink, and pulp and paper — and it is still largely produced using fossil fuels, accounting for around three-quarters of industrial emissions, the Commission said in a statement on Thursday.
The funding will come from revenues raised through the EU Emissions Trading System (EU ETS), the bloc’s carbon market in which companies must hold allowances for the greenhouse gases they emit.
Successful bidders will receive a fixed premium subsidy linked to each tonne of direct CO₂ emissions they cut, paid for up to five years, according to the terms published on 24 September 2026.
What technologies can apply
The auction — called the IF26 Heat Auction — will support three categories of technology: electrified options such as heat pumps, thermal storage, plasma torches and electric boilers; direct renewable heat from solar thermal or geothermal sources; and, for the first time in this scheme, nuclear technologies including small modular reactors, the Commission said.
Eligibility has been expanded to include projects producing industrial heat above 80°C, compared with a previous threshold of 100°C.
Projects of all sizes from any industrial sector across the European Economic Area can apply.
The Commission said the first auction under the scheme selected 65 projects, and described both rounds as pilot programmes for an “Industrial Decarbonisation Bank” that it said is intended to provide €100 billion for industrial decarbonisation.
Member states may add extra funding through an “Auction-as-a-Service” approach, which has already been used in auctions under the European Hydrogen Bank.
National information webinars for potential applicants are due to take place throughout October 2026, organised by Innovation Fund National Contact Points.
