The European Commission published final rules for a €1 billion Europe-wide auction supporting projects that cut emissions from industrial process heat, which remains largely powered by fossil fuels and accounts for around three quarters of industrial emissions.
The IF26 Heat Auction will support electrification technologies including heat pumps, thermal storage and electric boilers, as well as direct renewable heat from solar thermal and geothermal sources, with nuclear technologies including small modular reactors able to compete for the first time.
Successful projects will receive a fixed premium linked to each tonne of direct carbon dioxide emissions avoided for up to five years, with eligibility widened to industrial heat above 80 degrees Celsius.
The auction is expected to open in early December 2026 and is financed through EU Emissions Trading System revenues, also serving as a pilot for the planned Industrial Decarbonisation Bank.