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This is Part 2 of our Green Incentives series, which examines the opportunities afforded by existing grants and incentives and how companies can strategically capitalise on them to turn sustainability into a competitive edge. Read Part 1 here.
As Europe doubles down on its climate targets, both the EU and the UK are transforming their climate ambition into action through an expanding portfolio of incentive programmes. These initiatives are designed not only to help companies reduce emissions but to enable long-term innovation, investment, and resilience in the transition toward carbon net zero.
From cutting-edge clean tech research to full-scale industrial decarbonisation, these funding mechanisms are opening doors for companies ready to lead. Whether you’re upgrading facilities or scaling green innovations, these incentives go beyond mere compliance — they unlock strategic funding and meaningful financial impact.
In this article, we unpack the most significant low-carbon and decarbonisation initiatives in the EU and UK, outlining who can apply, what’s on offer, and how leading companies are already using these tools to transform their operations.
The EU’s green transition: Innovation funding for business decarbonisation
Horizon Europe: Fuelling breakthrough clean tech
The Horizon Europe programme is the EU’s largest ever funding initiative for research and innovation, with a total budget of €95.5 billion to be spent between 2021 and 2027.1 A core part of the European Green Deal, the programme supports projects that push the boundaries of science and technology, especially those accelerating the low-carbon transition.
Eligible participants include EU-based businesses, research institutions, and international partners who collaborate with EU entities. Horizon Europe offers non-repayable grants to support the research and development (R&D), piloting, and commercialisation of technologies with high decarbonisation potential.1
One example is Dell Technologies, which received €16 million via the BRAINE project to develop AI-powered edge computing infrastructure. The project reduced energy usage by optimising cooling systems, improved computing performance, and expanded research capacity, demonstrating how early-stage funding can deliver environmental and commercial value.2
💡 INSIGHT: Early movers in EU-funded clean tech aren’t just innovating, they’re shaping the standards others will have to follow. Horizon Europe provides companies with the opportunity to lead, rather than catch up.
Figure 1: budget remaining vs percentage spent of the Horizon Europe program as of 2025 (European Commission).3
EU innovation fund: Scaling up industrial decarbonisation
While Horizon Europe focuses on innovation at the research and development stage, the EU Innovation Fund targets more mature, market-ready technologies. With €40 billion in funding available through 2030, the fund is one of the world’s largest public financing programmes for climate innovation.
The Innovation Fund supports large-scale industrial decarbonisation projects, particularly in energy-intensive sectors. Companies from EU member states and associated countries are eligible to apply, while non-EU firms may participate as strategic partners. Grants can cover up to 60% of total project costs, reducing investment risk and encouraging early commercial deployment.1
A standout case is Nova Innovation, a tidal energy company based in Scotland. With Innovation Fund support, the company launched a 16-turbine tidal array in the Orkney Islands, advancing the EU’s renewable energy capacity and highlighting how strategic funding can drive both emissions reductions and corporate decarbonisation leadership.4
💡 INSIGHT: In hard-to-abate sectors, going green is costly, but not going green will cost even more. The Innovation Fund gives heavy industry the firepower to decarbonise without derailing profitability.
InvestEU: Mobilising green capital
As part of the EU’s broader Green Deal strategy, InvestEU supports projects that contribute to clean mobility, renewable energy, circular economy models, and industrial decarbonisation. While it does not offer direct grants, this initiative provides guarantees, equity, and debt financing through a network of implementing partners, including the European Investment Bank (EIB), national promotional banks, and other financial institutions.
Both EU-based companies and public or private project developers (including SMEs and large corporations) are eligible for funding. Non-EU businesses can also benefit, provided their projects are based in the EU or support EU policy goals. Instead of applying directly to the European Commission, interested companies must submit a detailed investment proposal to an InvestEU implementing partner, such as the European Investment Bank (EIB) or national promotional banks. Projects are evaluated based on their financial soundness, alignment with EU sustainability objectives, and long-term impact.
For example, in 2020, the EIB provided a €25 million loan to Spain's Zanini Auto Group to finance its R&D activities. This investment aimed to support the company's development of advanced automotive components, enhancing competitiveness and contributing to the EU's objectives for innovation and sustainable growth in the automotive sector.9
One high-profile example is Northvolt Ett, which received InvestEU support to build a lithium-ion battery gigafactory in Sweden. This initiative strengthened the EU’s clean energy supply chain and demonstrated how blended finance tools can advance industrial-scale decarbonisation while delivering strategic and economic value.10
💡 INSIGHT: With InvestEU, strategic green projects don’t have to stall for lack of funding. Blended finance tools such as guarantees and loans help de-risk bold investments, making it easier for companies to scale climate solutions and lead Europe’s green reindustrialisation.
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Circularise is the leading software platform that provides end-to-end traceability for complex industrial supply chains. We offer two traceability solutions: MassBalancer to automate mass balance bookkeeping and Digital Product Passports for end-to-end batch traceability.
Unlock EU and UK low-carbon funding
Traceability ensures your sustainability data is accurate, verifiable, and audit-ready — giving your business a competitive edge when applying for grants and subsidies. Let us help you secure funding and future-proof your operations.
This is Part 2 of our Green Incentives series, which examines the opportunities afforded by existing grants and incentives and how companies can strategically capitalise on them to turn sustainability into a competitive edge. Read Part 1 here.
As Europe doubles down on its climate targets, both the EU and the UK are transforming their climate ambition into action through an expanding portfolio of incentive programmes. These initiatives are designed not only to help companies reduce emissions but to enable long-term innovation, investment, and resilience in the transition toward carbon net zero.
From cutting-edge clean tech research to full-scale industrial decarbonisation, these funding mechanisms are opening doors for companies ready to lead. Whether you’re upgrading facilities or scaling green innovations, these incentives go beyond mere compliance — they unlock strategic funding and meaningful financial impact.
In this article, we unpack the most significant low-carbon and decarbonisation initiatives in the EU and UK, outlining who can apply, what’s on offer, and how leading companies are already using these tools to transform their operations.
The EU’s green transition: Innovation funding for business decarbonisation
Horizon Europe: Fuelling breakthrough clean tech
The Horizon Europe programme is the EU’s largest ever funding initiative for research and innovation, with a total budget of €95.5 billion to be spent between 2021 and 2027.1 A core part of the European Green Deal, the programme supports projects that push the boundaries of science and technology, especially those accelerating the low-carbon transition.
Eligible participants include EU-based businesses, research institutions, and international partners who collaborate with EU entities. Horizon Europe offers non-repayable grants to support the research and development (R&D), piloting, and commercialisation of technologies with high decarbonisation potential.1
One example is Dell Technologies, which received €16 million via the BRAINE project to develop AI-powered edge computing infrastructure. The project reduced energy usage by optimising cooling systems, improved computing performance, and expanded research capacity, demonstrating how early-stage funding can deliver environmental and commercial value.2
💡 INSIGHT: Early movers in EU-funded clean tech aren’t just innovating, they’re shaping the standards others will have to follow. Horizon Europe provides companies with the opportunity to lead, rather than catch up.
Figure 1: budget remaining vs percentage spent of the Horizon Europe program as of 2025 (European Commission).3
EU innovation fund: Scaling up industrial decarbonisation
While Horizon Europe focuses on innovation at the research and development stage, the EU Innovation Fund targets more mature, market-ready technologies. With €40 billion in funding available through 2030, the fund is one of the world’s largest public financing programmes for climate innovation.
The Innovation Fund supports large-scale industrial decarbonisation projects, particularly in energy-intensive sectors. Companies from EU member states and associated countries are eligible to apply, while non-EU firms may participate as strategic partners. Grants can cover up to 60% of total project costs, reducing investment risk and encouraging early commercial deployment.1
A standout case is Nova Innovation, a tidal energy company based in Scotland. With Innovation Fund support, the company launched a 16-turbine tidal array in the Orkney Islands, advancing the EU’s renewable energy capacity and highlighting how strategic funding can drive both emissions reductions and corporate decarbonisation leadership.4
💡 INSIGHT: In hard-to-abate sectors, going green is costly, but not going green will cost even more. The Innovation Fund gives heavy industry the firepower to decarbonise without derailing profitability.
InvestEU: Mobilising green capital
As part of the EU’s broader Green Deal strategy, InvestEU supports projects that contribute to clean mobility, renewable energy, circular economy models, and industrial decarbonisation. While it does not offer direct grants, this initiative provides guarantees, equity, and debt financing through a network of implementing partners, including the European Investment Bank (EIB), national promotional banks, and other financial institutions.
Both EU-based companies and public or private project developers (including SMEs and large corporations) are eligible for funding. Non-EU businesses can also benefit, provided their projects are based in the EU or support EU policy goals. Instead of applying directly to the European Commission, interested companies must submit a detailed investment proposal to an InvestEU implementing partner, such as the European Investment Bank (EIB) or national promotional banks. Projects are evaluated based on their financial soundness, alignment with EU sustainability objectives, and long-term impact.
For example, in 2020, the EIB provided a €25 million loan to Spain's Zanini Auto Group to finance its R&D activities. This investment aimed to support the company's development of advanced automotive components, enhancing competitiveness and contributing to the EU's objectives for innovation and sustainable growth in the automotive sector.9
One high-profile example is Northvolt Ett, which received InvestEU support to build a lithium-ion battery gigafactory in Sweden. This initiative strengthened the EU’s clean energy supply chain and demonstrated how blended finance tools can advance industrial-scale decarbonisation while delivering strategic and economic value.10
💡 INSIGHT: With InvestEU, strategic green projects don’t have to stall for lack of funding. Blended finance tools such as guarantees and loans help de-risk bold investments, making it easier for companies to scale climate solutions and lead Europe’s green reindustrialisation.
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The UK’s tax relief and subsidies: Green growth for businesses, infrastructure and renewable energy
Industrial Energy Transformation Fund (IETF): Supporting carbon-intensive industries
The UK government’s Industrial Energy Transformation Fund (IETF), valued at £500 million, is designed to support decarbonisation in energy-intensive industries. From chemicals to metals and food processing, the fund offers grants for companies that adopt energy-efficient technologies and cleaner production methods.5
The programme is open to UK-registered businesses in eligible sectors, helping them modernise operations and reduce emissions while remaining competitive.
For example, British Steel used IETF support to trial hydrogen as a fuel in its production process. The project not only cut emissions but also helped secure skilled jobs in a historically high-emission sector, highlighting how climate investments can also deliver social and financial impact.6
Figure 2: Budget remaining vs percentage spent of the UK IETF as of 2025. (Gov.UK)5
💡 INSIGHT: In the UK, decarbonisation is an industrial strategy. Funds like the IETF help legacy sectors like steel future-proof operations, protect jobs, and stay globally competitive in a low-carbon economy.
Super Deduction Tax Relief: Incentivising investment in clean infrastructure
Although the UK’s Super Deduction tax relief ended in March 2023, it was a powerful incentive during its tenure, allowing companies to deduct 130% of qualifying capital investment from their taxable profits. It has since been replaced by the Full Expensing Policy, which continues to reward companies investing in energy-efficient or low-carbon infrastructure.7
Severn Trent is a major UK water utility which capitalised on the Super Deduction to install solar energy systems and biogas upgrades across its facilities. The move accelerated its net-zero strategy while significantly lowering its tax liability, demonstrating how policy can directly support operational change and cost savings.8
Contracts for Difference (CfD): Price certainty for renewable energy projects
The UK’s Contracts for Difference (CfD) scheme offers developers of low-carbon electricity a fixed price for the power they generate.11 This government-backed mechanism reduces market risk, making it easier to finance and build large-scale renewable energy projects.
Ørsted’s Hornsea Two, the largest offshore wind farm in the world, was developed under a CfD agreement. The price certainty enabled substantial investment and timely project delivery, accelerating the UK’s clean energy goals while enhancing investor confidence in large-scale corporate decarbonisation.12
Figure 3: Wind farms benefit from UK’s Contracts for Difference (CfD) scheme. 12
Challenges businesses may face when applying for decarbonisation grants
While the EU and UK offer substantial financial incentives to accelerate decarbonisation, businesses often face several hurdles that can delay or even derail their chances of success. Understanding these challenges (and how to overcome them) can significantly improve your odds of securing funding that will have a lasting financial impact and help you achieve carbon net zero.
Navigating complex paperwork and application processes
The paperwork involved in applying for green incentives can be time-consuming and intricate. From eligibility criteria to financial projections, businesses must be prepared to provide detailed documentation. This is particularly critical for those seeking to secure funding for corporate decarbonisation efforts, as clear and accurate financial documentation is essential.
The key to overcoming this challenge is early preparation. Start by thoroughly reviewing the guidelines of the specific grant or funding programme you're interested in. To further streamline the process, platforms like Circularise can simplify data collection by automating sustainability data booking, GHG calculations, reconciliation, and material allocation. This eliminates manual errors and the inefficiencies of spreadsheet-based reporting.
It is also helpful to engage with consultants or local support organisations who can help with the application process and ensure your submission is as strong as possible.
Aligning projects with policy objectives for low-carbon transitions
EU and UK funding programmes are closely tied to their climate policy goals, such as the European Green Deal, with its initiatives like the Ecodesign for Sustainable Products Regulation (ESPR) and the UK’s net-zero targets. To stand out, businesses must ensure their projects align with these broader objectives. For instance, initiatives that focus on low-carbon technologies, energy efficiency, and emission reductions will resonate more with funding bodies. Highlighting specific outcomes, like improved operational efficiency or a reduction in carbon emissions, will strengthen your application and improve your chances of receiving grants.
Securing co-funding or matching investment for long-term decarbonisation
Many funding programmes, such as InvestEU, require businesses to secure co-funding or demonstrate financial stability. This can be a significant challenge for companies seeking to implement large-scale decarbonisation strategies. To navigate this, companies should explore partnerships with other businesses, financial institutions, or regional development funds. Engaging with collaborative projects can also enhance visibility and credibility in the eyes of funders.
For instance, Circularise has participated in several EU-funded initiatives – including Circular Foam, EURECOMP, and CSyARES – demonstrating how innovative data transparency solutions can support circular ecosystems. Being part of such networks not only fosters knowledge exchange but can also improve access to funding opportunities by showcasing a company’s commitment to sustainable innovation.
Additionally, consider presenting a solid business case that outlines your low-carbon investment strategy and the long-term financial impact of the project. The more robust and strategic your investment approach, the greater your chances of securing funding.
Tips for a successful application
Success in securing these grants and incentives often depends on more than innovation; it’s about alignment and strategy. Here are three key considerations:
Start with strong partnerships. Many EU programmes require collaboration with regional partners, particularly for international applicants. Building the right consortium early is critical.
Align with climate policy objectives. Projects that support the European Green Deal or the UK’s net-zero strategy are more likely to receive funding. Show how your initiative directly contributes to national or EU-wide decarbonisation targets.
Leverage your ecosystem. Engage with local accelerators, funding consultants, and national grant offices to explore opportunities. These actors can help navigate eligibility requirements, structure applications, and identify optimal funding pathways, maximising your chance of success and amplifying your potential financial impact.
Conclusion
As the climate policy landscape continues to evolve, EU and UK funding schemes are strategic levers for future-proofing your business. These programmes offer powerful opportunities to unlock capital, accelerate low-carbon technologies, and strengthen long-term market competitiveness. However, winning this funding and utilising it effectively requires more than ambition. In light of growing scrutiny and concerns about fraud, robust traceability is now a business imperative.
Whether you’re applying for grants to fund decarbonisation infrastructure, low-carbon R&D, or circular production models, verifiable sustainability data — from emissions tracking to material sourcing — is key to securing support.
Companies that invest in traceability now are better positioned to secure and sustain public funding in the green economy. Traceability systems not only reinforce your credibility but also simplify the complex reporting, auditing, and documentation required by these programmes.
Circularise can support your sustainability reporting by automating key processes such as sustainability data booking, GHG calculations, reconciliation, and material allocation, reducing errors and streamlining compliance.
Unlock EU and UK low-carbon funding
Traceability ensures your sustainability data is accurate, verifiable, and audit-ready — giving your business a competitive edge when applying for grants and subsidies. Let us help you secure funding and future-proof your operations.
