European businesses now have access to a growing number of funding programs designed to support industrial decarbonization projects.
Some focus on research and pilot projects. Others support large-scale industrial deployment, infrastructure development, or commercial rollout for technologies such as hydrogen, renewable heat, carbon capture, and industrial electrification.
This guide breaks down some of the main European funding programs available to industrial businesses, what they support, and which types of organizations are most likely to benefit from them.
These programs are mainly designed for businesses developing new technologies, testing pilot projects, or exploring early-stage industrial transition plans.
Horizon Europe is one of the European Union’s largest research and innovation funding programs. It supports research and development, feasibility studies, pilot projects, and cross-industry collaboration.
Projects can cover technologies such as:
Many Horizon Europe applications involve consortiums made up of manufacturers, universities, technology developers, and public bodies.
Applications can be time-intensive and often require strong technical documentation and collaboration between partners.
Best for: Businesses developing new technologies or testing early-stage industrial decarbonization projects with strong technical and research capabilities.
The Clean Hydrogen Joint Undertaking focuses specifically on hydrogen technologies and infrastructure across Europe. Funding can support:
One major focus area is the development of “Hydrogen Valleys,” where hydrogen production and industrial demand are developed together within a region. The program is heavily focused on innovation and collaboration across supply chains.
Best for: Businesses developing hydrogen projects, regional hydrogen ecosystems, or industrial fuel-switching projects involving multiple partners.
The LIFE Programme supports environmental and climate-related projects, including pilot and demonstration activity linked to the clean energy transition. Compared to larger industrial funding schemes, LIFE is often better suited to smaller-scale projects testing technologies in operational environments before wider rollout.
Funding can support:
Best for: Companies earlier in their decarbonization journey that want to test technologies before scaling commercially.
The Research Fund for Coal and Steel supports industrial transition within heavy industry sectors. Funding can support:
The program is particularly relevant for energy-intensive sectors such as steel manufacturing.
Best for: Heavy industrial businesses modernizing existing production processes or developing lower-carbon manufacturing methods.
These programs are designed for businesses further along the journey and preparing for larger-scale deployment.
The Innovation Fund is one of Europe’s largest funding programs for industrial decarbonization and low-carbon technology deployment. Unlike Horizon Europe, the Innovation Fund focuses more heavily on commercial-scale projects preparing for deployment.
Funding can support:
Applications are assessed against factors such as emissions reduction potential, project maturity, cost effectiveness, and scalability. Projects need strong technical plans, realistic delivery timelines, and credible emissions calculations. Overall, securing this fund can require significant coordination across engineering, sustainability, operations, and finance teams.
According to Solvay, a multinational chemicals company, organizations may need one to two full-time employees working for one to three months to prepare and manage applications properly.
Best for: Businesses with commercially mature projects preparing for industrial deployment and able to dedicate significant internal resources to the application process.
The Connecting Europe Facility supports infrastructure projects across transport, energy, and digital systems.
For industrial decarbonization, it is most relevant for projects involving:
The scheme can support both development costs and capital costs. Many projects require coordination with public authorities, financial institutions, and infrastructure partners, so planning timelines can be longer than expected.
Best for: Infrastructure developers and large industrial projects involving long-term energy or transport infrastructure investment.
The InvestEU Programme is designed to unlock private investment into strategic European projects. Unlike traditional grant schemes, InvestEU often works by reducing investment risk and encouraging private financing into projects that may otherwise struggle to secure capital.
Projects can include:
Best for: Businesses seeking blended public and private financing for large industrial or infrastructure projects.
The Modernisation Fund supports energy transition projects in lower-income European Union member states. Funding can support:
Availability depends on geography, with support targeted toward specific countries and regions.
Best for: Industrial businesses operating in eligible European Union member states and upgrading older industrial infrastructure.
The Cohesion Fund supports projects linked to environmental improvement, sustainable transport, and climate-related infrastructure investment. Many funded projects are tied to wider regional development goals and public infrastructure priorities.
Funding can support:
Best for: Businesses involved in regional infrastructure or industrial transition projects aligned with local economic development plans.
The European Regional Development Fund focuses on regional economic development and industrial modernization. Funding can support:
Funding priorities vary significantly between regions.
Best for: Regional manufacturers and small to medium-sized businesses investing in industrial modernization or local economic growth.
These programs are mainly designed for businesses with commercially mature projects close to deployment.
The Innovation Fund Heat Auction focuses specifically on industrial heat decarbonization. Projects compete largely on price rather than broader innovation criteria.
Technologies supported can include:
Projects are generally expected to be close to a final investment decision and financially viable over the long term. Applicants may also need to provide financial guarantees as part of the process.
Best for: Mature industrial heat projects with strong commercial models and clear deployment timelines.
The Innovation Fund Hydrogen Auction supports hydrogen production projects through a largely price-based competition process. Projects need:
The program is designed for projects close to deployment rather than early-stage hydrogen development.
Best for: Mature hydrogen production projects with established commercial partnerships and near-term deployment plans.
The Just Transition Mechanism supports regions and industries most affected by the transition away from fossil fuels. Funding can support:
The program is particularly relevant for regions historically dependent on high-carbon industries.
Best for: Businesses operating in regions transitioning away from fossil fuel-based industries.
European Union funding is only part of the picture. Many countries are now launching their own industrial decarbonization programs alongside broader European schemes.
Germany, France, the Netherlands, and the United Kingdom have all introduced funding mechanisms focused on industrial heat, hydrogen, energy efficiency, and low-carbon manufacturing.
Examples include:
For many businesses, national funding programs may be easier to access than larger European-wide competitions.
Funding availability does not automatically mean projects are ready to receive it.
Many applications fail because projects are not mature enough operationally or commercially. Common challenges include weak business cases, unrealistic timelines, poor quality emissions data, limited engineering detail, and insufficient internal coordination.
In many cases, organizations underestimate the amount of planning needed to move projects from concept to implementation.
Navigating industrial decarbonization funding can be complex, particularly for businesses managing large projects, multiple sites, or new technologies.
Many applications require detailed technical planning, emissions modeling, financial analysis, and coordination across engineering, operations, sustainability, and finance teams. For larger schemes such as the Innovation Fund, preparing a competitive application can take months of work.
As Secaro’s knowledge partner for industrial decarbonization and clean heat, ERM works with organizations to:
Since 2010, ERM has supported funding acquisition for close to €2 billion worth of activities across hydrogen, renewable energy, industrial decarbonization, and low-carbon infrastructure projects.
Learn more about ERM’s industrial decarbonization and funding support services.