- The European Commission published final IF26 Heat Auction terms on 24 September.
- The €1bn programme will be financed from EU Emissions Trading System revenues.
- Electrification, direct renewable heat and nuclear technologies are eligible.
- Successful EU industrial heat auction projects can receive fixed-premium support for up to five years.
- Bidding is planned to open in December 2026 and close in February 2027.
Brussels, 27 September, (Brussels Morning Newspaper) – The European Commission has set the final terms for a €1 billion EU industrial heat auction aimed at cutting emissions from the heat used in European manufacturing. Published on 24 September, the IF26 Heat Auction rules cover projects using electrification, direct renewable heat and, for the first time in the scheme, nuclear technologies.
EU industrial heat auction covers three technology groups
The auction will be financed through revenues from the EU Emissions Trading System and implemented under the Innovation Fund. It is open to projects of all sizes and industrial sectors across the European Economic Area.
Successful bidders will receive a fixed-premium subsidy proportional to each tonne of direct CO₂ emissions avoided, with payments available for a maximum of five years.
Eligible electrification technologies include heat pumps, thermal storage, plasma torches and electric boilers. Direct renewable heat from solar thermal and geothermal sources can also qualify. Nuclear technologies, including small modular reactors, have been added for the first time.
Industrial heat projects gain wider access
The latest auction widens eligibility to include some projects producing industrial heat above 80°C. The previous auction covered projects producing heat above 100°C.
The Commission has also introduced further incentives for flexibility measures that can reduce pressure on the electricity system, particularly during periods of high demand.
Process heat is used across industries including chemicals, steel, cement, pulp and paper, and food and beverages. The Commission says these processes remain largely dependent on fossil fuels and account for three-quarters of industrial emissions.
Commission links auction to industrial investment
Kurt Vandenberghe, Director-General of the Commission’s Directorate-General for Climate Action, called the auction a “crucial stepping stone” towards implementation of the Industrial Decarbonisation Bank.
He also called on industry leaders to “prepare their bids” ahead of the December opening.
The IF26 round follows the first industrial heat auction, which received 85 bids. Sixty-five projects were selected for grant preparation, seeking nearly €400 million in support. Both auctions are pilots for the Industrial Decarbonisation Bank, which is intended to provide €100 billion in funding for industrial decarbonisation.
Auction opens in December
The Commission’s current timetable lists national applicant information webinars throughout October 2026. The call for proposals is then planned to open in December 2026 and close in February 2027.
The auction is not yet open, and the Commission has not published exact opening and closing dates. The official call for proposals and its accompanying documents will set the definitive requirements applicants must follow.
Member states can also add national funding through the Auction-as-a-Service mechanism, allowing additional qualifying projects in participating countries to receive support.
