On 24 September, the European Commission published final terms for its second Innovation Fund industrial heat auction. Bidding is scheduled to open in December 2026 and close in February 2027. Financed through EU ETS revenues, the EUR1bn programme offers a fixed premium for verified heat production for five years after operation begins. An initial EUR300m is allocated to heat above 400°C, where cement projects will compete with other industries.

Applicants request support per MWh of heat, converted into a ranked CO2-abatement bid using a standard natural-gas benchmark. This calculation differs from a cement plant’s actual emissions savings, particularly where coal or alternative fuels are displaced. Capturing limestone-derived CO2 does not increase the heat-based subsidy calculation.

For cement, the opportunity extends beyond fully electric clinker production. Electrifying calcination could replace substantial combustion heat while retaining an existing rotary kiln. Limestone decomposition would still release CO2, but designs that keep this gas separate can simplify capture. Transport and permanent storage remain necessary for a CCS route.

Europe’s fully electric clinker technologies remain at demonstration stage. Heidelberg Materials has tested a 300kWel plasma kiln at Slite, Sweden, operating it continuously for up to 54 hours. A 1MWel research kiln is planned at Skövde, with testing continuing during 2027. SaltX and Holcim reported Portland-quality clinker from an electrified process in April and target a European pilot plant by 2028. These developments demonstrate progress, but do not establish commercial-scale readiness or auction eligibility: high-temperature projects require at least 3MW of thermal output.

Calcination occurs at approximately 900°C, while clinker formation requires material temperatures approaching 1450°C. Electrifying the calciner therefore offers a more plausible first step for many existing plants, preserving the kiln’s alternative-fuel capability while addressing a substantial share of heat demand.

A 2025 study by the University of Padova, FLSmidth Cement and Siemens combined electric calciners with carbon capture on rotary-kiln emissions. At EUR125/MWh electricity, its most favourable configuration had modelled costs of EUR213.40/t clinker and EUR217.40/t CO2 avoided. These figures include carbon management, rather than electrification alone. Competitiveness depended on low-carbon electricity below approximately EUR90-100/MWh and assumed equipment costs.

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An Oxford University study published in January 2026 compared concentrated-solar calcination with a PV-powered plasma kiln and batteries. Solar calcination became competitive at gas prices above approximately US$30/MWh at the Brazilian site and US$50/MWh at the Chinese and US sites. PV-powered clinker burning remained substantially more expensive. This favours direct solar calcination under the study’s assumptions, rather than establishing a general threshold for electric calciners.

Electricity infrastructure is equally important. A 2026 Politecnico di Milano study estimated roughly tenfold conventional electricity demand for fully electrified configurations and 4.5-7 times for partial electrification. At an assumed 1MWh/t clinker, a 1Mta plant would consume 1TWh annually, averaging 114MW. Connections, transformers, balancing and storage must enter the investment comparison; annual renewable contracts alone do not ensure continuous supply.

The Politecnico study used calcined-material storage to shift electric-calciner operation while an alternative-fuel-fired kiln continued running. This lowered modelled renewable electricity costs by 37-48 per cent, although oxyfuel remained cheaper under baseline assumptions.

The auction also rewards flexibility. Qualifying storage reduces the bid price used for ranking by 25 per cent without increasing payment rates, and removes the subsidised-output cap equivalent to 70 per cent of annual hours at nominal capacity. Storage must replace 20 per cent of grid electricity consumption or process heat demand for four hours, activating within one hour. Material storage should not automatically be assumed to qualify.

Partial electrification is clearly a more practical first investment than replacing an entire clinker line. Five years of unindexed support can help launch investment. Long-term viability will depend on dependable equipment, affordable electricity and infrastructure that remains commercially useful after payments end.