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Heat Auction 2026: A breakdown of the rules for the 2nd edition to help you prepare your application
Pierre Delmas
On September 24, 2026, the European Commission published the final rules for the second edition of the Heat Auction. The budget totals 1 billion euros to decarbonize industrial heating, and the call for proposals is expected in December 2026. A new funding stream, a new bonus, and a new CO₂ calculation method: the rules are changing. Whether it’s a heat pump, an electric boiler, or thermal storage, every project must reassess its strategy. We’ve read the text in detail and compiled the key points in a downloadable guide.
Heat Auction 2026: How the Auction Works
The Heat Auction is a call for proposals from the European Innovation Fund. It funds decarbonized industrial heating projects.
The basic principle remains the same. The industrial operator applies for a fixed subsidy for each metric ton of CO₂ avoided. The subsidy is paid over a 5-year period following commissioning, based on the actual measured heat output. The lowest bids are selected until the budget is exhausted, and each successful bidder is paid the amount they requested.
| Heat Auction 2026: Key Figures | |
|---|---|
| 1 billion euros | total budget |
| 3 categories | based on the temperature of the heat produced |
| 5 years | fixed subsidy after commissioning |
| 2,5 M€ | minimum investment per project |
| +25%bonus | bonus based on ranking |
What’s changing are the rules. The Commission is modifying seven of them: application categories, CO₂ calculations, caps, minimum investment, required documentation, eligible technologies, and deadlines. Some open new doors, while others close them.
Three application windows, a new threshold at 80 °C: Is your project eligible?
| Categories | Temperature | Min. Power | Budget |
|---|---|---|---|
| Low temperature | 80-100 °C | 5 MW | 100 M€ |
| Medium temperature | 100-400 °C | 3 MW | 600 M€ |
| High température | > 400 °C | 3 MW | 300 M€ |
This is the big news: a funding category for temperatures between 80 and 100°C. It opens up the Heat Auction to heat needs that were previously excluded, but it does not cover all technologies, and its budget represents only 10% of the total allocation.
Industrial heat pumps, electric boilers, thermal storage, solar thermal, geothermal energy, and waste heat recovery: each solution has its own funding category and eligibility requirements. Other technologies are excluded. Common requirements also apply to all projects, and it’s best to check them now.
Check your project’s eligibility with our guide
25% Bonus and Declared Volume: Bidding Strategy Becomes Crucial
It has a dual effect: it improves the bid’s ranking and increases the volume of heat that can be subsidized. The conditions for obtaining it vary by technology.
The heat volume declared in the bid also warrants special attention. It determines the maximum subsidy for the project. It must therefore be set as close as possible to the expected production, so that the project can fully benefit from the subsidy while meeting its commitments.
Finally, the new CO₂ calculation changes how prices are interpreted. The same subsidy requirement no longer appears as the same amount in €/metric ton.
Measurement, guarantees, and cumulation of grants: key considerations from the design phase onward
Several rules must be taken into account well before the application is submitted:
- Temperature: It is assessed as an average over a given period. System sizing must account for this from the design phase onward.
- Bank guarantee: This is requested shortly after selection from a bank that meets specific criteria.
- Timelines: They are longer than in 2025 for securing financing and commissioning the facility.
- Combination of financial assistance: Some grants are incompatible with the incentive, while others remain available.
December call for proposals: Now is the time to prepare
The application deadline has not yet been announced. In 2025, applicants had approximately 11 weeks, a timeframe the industry deemed too short. Application portal, bonus, capacity, temperature: the right configuration must be decided now, not at the time of submission. In fact, certain steps can be taken today, without waiting for the call for proposals to open.
At Newheat, we support manufacturers from the feasibility study through to the submission of the application: sizing, selection of the bidding window and technology (heat pump, e-boiler, thermal storage, waste heat recovery, solar thermal), bidding strategy, and access to the bonus.
Heat Auction 2026 FAQ
When does the 2026 Heat Auction open?
The call for proposals is expected in December 2026. The closing date has not yet been announced.
What is the budget for the 2026 Heat Auction?
1 billion euros, divided into three categories: 100 million euros for 80–100 °C, 600 million euros for 100–400 °C, and 300 million euros for temperatures above 400 °C.
Is a heat pump eligible for the Heat Auction?
Yes, subject to performance and capacity requirements. It can qualify for the new 80–100 °C category or the 100–400 °C category.
Is an electric boiler eligible for the Heat Auction?
Yes, in the categories above 100 °C. Eligibility for the 25% bonus is subject to specific conditions.
What is the minimum investment required to apply?
€2.5 million per project, regardless of the category.
Sources: European Commission, Final Terms and Conditions for IF26 Heat Auction, v1.0, September 24, 2026; CINEA, Q&A for IF25 Heat Auction, v2.0, December 18, 2025. Newheat interpretation, not binding.