The innovation fund

Abstract

This report analyses a range of options for designing the EU Innovation Fund (IF), a financing instrument created under the EU Emissions Trading System (ETS) to support technological breakthrough for low-carbon innovations in the power sector and industry. The report combines a look at lessons learned from the IF’s predecessor mechanism “NER 300” with insights from the respective emission reduction technology options in three key industry sectors (steel, cement, pulp & paper) based on a literature review and interviews: on this basis, the paper concludes with recommendations for the IF’s design.