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0.27%. That is the share of the EU Innovation Fund’s latest €3.4 billion round that went to direct air capture, the first time the program has funded one at all.
The first EU DACCS grant is a ceiling, not a cheque
The European Commission selected Sirona Technologies’ Furu project for up to €9.1 million (about $10.2 million), making it the first direct air carbon capture and storage (DACCS, meaning machines that pull CO2 from ambient air and lock it away permanently) project ever backed by the Innovation Fund. The award sits inside a round that spread €3.4 billion across 77 projects in 23 countries. Independent coverage from Balkan Green Energy News flagged two debuts in the same round: a small modular reactor and a direct air capture project. So DACCS entered the Commission’s flagship industrial grant program through the same door as nuclear. It just entered with a much smaller suitcase.
Furu gets a capital grant, which is a different animal from an offtake
The Innovation Fund is capitalised by selling emissions allowances under the EU Emissions Trading System, the bloc’s cap-and-trade scheme. Emitters buy allowances, the Commission banks the proceeds, and the fund redistributes them to projects that cut or remove emissions. That makes the Furu award a capital expenditure grant (CapEx, the up-front cost of building a plant), not a purchase of removed tonnes.
The distinction matters. A grant lowers the amount of private equity and debt a developer needs to raise to pour concrete. It does not pay for the electricity, sorbent replacement, and storage fees that make up operating expenditure (OpEx, the yearly cost of running the plant), and it does not guarantee anyone will buy the output. The public summary I have gives no capacity figure, storage site, or capture chemistry for Furu, so I cannot derive a cost per tonne from this award. What I can say is that “up to €9.1 million” is a maximum. The grant agreement still has to be signed, and disbursement normally tracks milestones.
The money says Brussels is willing to test, not to build
Divide €3.4 billion by 77 projects and the mean award is about €44 million. Furu’s €9.1 million ceiling is about one-fifth of that. On the denominator of the whole round, it is 0.27%. Both numbers point the same way.
Who pays here is European industry, through allowance purchases. Who gets paid is a DAC developer, for the first time. What the transaction reveals about willingness-to-pay is limited but real: the Commission’s selection committee decided a DACCS project could compete against steel, cement, hydrogen, and battery projects on the fund’s criteria and win. That is a precedent that did not exist before this round, and precedents are what second-time applicants and their investors cite.
For buyers, the award changes little in the near term. European DAC supply contracts still come from private offtakes, the kind of multi-year deal I covered in Tapestry and Climeworks Sign 10-Year Carbon Removal Partnership. A €9.1 million grant can make a project bankable enough to sign such a deal. It cannot replace one. And the plant still has to sell every tonne.
The EU has a net-zero target and no settled rule for what counts as “net”
The policy backdrop is the EU’s legal commitment to net-zero greenhouse gas emissions by 2050. Net zero requires removals to cancel whatever emissions remain after cuts, which means the bloc eventually needs a durable supply of removed carbon and a way to account for it. The Commission has been building certification rules for carbon removals in parallel, and the question of whether removals should ever interact with the ETS cap is still open. Funding a DACCS plant from ETS revenue, while removals sit outside the ETS, is the kind of half-step that precedes a decision rather than making one.
The constraint I always attach: these removals exist to offset hard-to-abate residual emissions, not to extend fossil fuel use. A public grant program built on allowance revenue should be read as paying to shrink residual emissions, not as permission to leave them large.
Peters: net zero CO2 is the destination, which is why “net” needs a supply chain
Glen Peters (@glenpeters.bsky.social on Bluesky) put the stakes plainly in a thread defending net zero as a target, not commenting on Sirona: “The thing about net zero is that it is the ultimate target anyway. Net zero CO2 is needed eventually.” If that is right, then every durable-removal line item in a major industrial grant program is part of how the word “net” becomes physical. The 0.27% share is a measure of how early that work is in Europe.
Skeptics will say the grant proves the wrong point
The sharpest objection is cost. DAC remains among the most expensive removal pathways per tonne, and a competitor in biochar, enhanced rock weathering (ERW, spreading crushed silicate rock on soil to absorb CO2), or bioenergy with carbon capture and storage (BECCS, burning biomass and capturing the flue gas) would argue the same €9.1 million buys more tonnes elsewhere. They would be right on today’s prices. The counter is that first-of-a-kind grants are supposed to buy cost data, not tonnes, and that the Commission funded one plant, not a pathway-wide subsidy.
A second objection is the “up to.” Innovation Fund ceilings are not guarantees, and a project that misses its milestones can receive far less. Until the grant agreement is signed, Furu holds an option, not €9.1 million.
Verdict: a foothold has been bought, and the next round decides if it is a category
Europe has now formally admitted DACCS into its main industrial decarbonisation grant program, at a size that de-risks one project and finances no fleet. The precedent is the asset; the money is a rounding error on the round. I laid out the scaling problem in How Can Direct Air Capture Scale to Deliver Real Carbon Removal for Climate Solutions, and nothing in this award resolves it.
Two things to watch. First, whether Sirona converts the ceiling into a signed agreement, and at what final figure. Second, whether the next Innovation Fund round selects more than one DACCS project. One award is a test; two or more is a line item, and that is the signal European DAC investors are actually waiting for.
Citations
- Europa — up to €9.1 million (about $10.2 million)
- Europa — €3.4 billion across 77 projects in 23 countries
- Balkangreenenergynews — Balkan Green Energy News
- Bluesky — @glenpeters.bsky.social on Bluesky — Bluesky post