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Important Projects of Common European Interest (IPCEIs) are large-scale, cross-border initiatives designed to support strategic industrial value chains within the EU. They typically involve companies from at least four EU member states and focus on areas where the market alone cannot deliver sufficient investment, particularly due to high technological or financial risks. Currently, eight programs are in the design phase, and new funding opportunities are available for companies in selected fields.
Concept and rationale: Addressing EU-wide market failures
From a legal perspective, IPCEIs rely on article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which allows the European Commission to approve state aid for projects of common European interest. This creates a controlled exception to the general prohibition on state aid, under strict compatibility criteria defined in the IPCEI Communication (most recently updated in 2021).
The underlying rationale is closely linked to the EU’s broader policy objectives on competition. IPCEIs aim to strengthen competitiveness, support the green and digital transitions, and enhance Europe’s strategic autonomy. In practice, they allow public authorities to support projects that would not materialize without state intervention, especially where there is a clear market failure or coordination gap across member states.
These projects are characterized by several key features. They must demonstrate a high level of innovation, going beyond the global state of the art, and generate positive cross-border spillover effects across the European economy. They also contribute to the emergence of integrated European ecosystems by combining industrial actors, research organizations, and public authorities around shared technological objectives.
Operational framework: Governance, eligibility, and funding
IPCEIs follow a structured and multi-level governance model involving EU member states, industrial companies, and the European Commission. In contrast with EU-funded programs, financing is provided primarily by member states through national budgets, although it must be coordinated at the European level and approved (notified) by the European Commission.
The selection of projects generally begins with member states identifying strategic priority sectors (e.g. AI, nuclear), followed by calls for “Expressions of Interest” at the national level. Potential participants are first screened domestically before entering a European “matchmaking” phase, during which cross-border consortia are formed. This step is essential, as IPCEIs must demonstrate genuine collaboration across member states and a coherent contribution to a shared European value chain.
After selection by a member state, the companies need to work on and contribute to the pre-notification to the European Commission. This materializes in particular in two key documents: (1) the chapeau document, describing the overall IPCEI project as a whole and (2) the project portfolio including the funding gap calculation, describing the individual industrial project.
Eligibility criteria are demanding. Projects must demonstrate their strategic relevance for the EU, their contribution to a common European objective, and their positioning within a broader value chain. They must also demonstrate the existence of significant market failures, the necessity and proportionality of public support, and existence of an incentive effect, in particular through the funding gap analysis. In addition, projects must involve substantial private co-financing and provide for wide dissemination of results at the EU level, ensuring that benefits extend beyond the participating firms.
In terms of scope, IPCEIs typically cover both research, development, and innovation (RDI) activities and the first industrial deployment phase. In some cases, they may also include the development of large-scale infrastructures of European importance. The emphasis on early industrialization stages (first industrial deployment) distinguishes IPCEIs from more traditional R&D-targeted funding schemes and allow for significant financial support to industrial scale-up and uptake support.
Finally, not only do the member states play a vital role—being responsible for project assessment and selection of the participants on a national level—but the EU Commission is also a major player in the process, as its approval is mandatory. Each direct project is individually assessed, especially the justification of the funding gap, to ensure that its positive effects outweigh potential distortions of competition. This ex-ante control is a key safeguard within the EU state aid framework.
Impact thus far
Since 2018, the European Commission has approved a growing number (12) of integrated IPCEIs across strategic industry sectors. These initiatives have mobilized substantial volumes of investment. Approved state aid to date, combined with expected private contributions, exceeds EUR 90 billion, placing IPCEIs at a scale comparable to major EU programs, such as Horizon Europe.
The instrument has contributed to the structuring of European value chains in areas such as batteries, microelectronics, hydrogen, and cloud infrastructure. Participation has steadily widened, both in terms of EU member states and corporate actors, with a noticeable increase in the share of small and medium-sized enterprises over time.
The hydrogen sector has seen the most extensive deployment of IPCEIs to date. Four successive waves (Hy2Tech, Hy2Use, Hy2Infra, and Hy2Move) have been approved between 2022 and 2024, covering the full hydrogen value chain from production to mobility applications. These projects involve more than a dozen EU member states and mobilize several tens of billions of euros in combined public and private investment.
IPCEIs also operate as a coordination mechanism: in practice, the Joint European Forum (JEF) for IPCEIs is instrumental in such coordination, the latest JEF being held in May 2026 and the next one scheduled for October 2026. They align national industrial strategies and channel public funding towards jointly defined technological priorities. In doing so, they facilitate the transition from research to first industrial deployment, a stage that remains underfinanced in the current European innovation ecosystem.
However, structural and organizational constraints remain. The design and approval process is complex, resource-intensive, and time-consuming, requiring early-stage coordination between multiple jurisdictions. The reliance on national funding introduces differentiated capacities between member states, which may affect participation levels and project allocation.
In order for the EU to meet the objectives set forth in the Draghi report, and to be competitive against programs such as the Inflation Reduction Act introduced by former US President Biden, it is pivotal that the EU expands the IPCEI framework even more and streamlines individual project approval to reduce complexity and, more importantly, to increase urgently needed speed.
Recent developments and new IPCEI initiatives
Recent years have seen a continued expansion of the IPCEI instrument, both in terms of sectors covered and the scale of projects launched. Several new initiatives illustrate this trend.
In the digital domain, the IPCEI on Next Generation Cloud Infrastructure and Services – CIS (approved in December 2023) supports the development of a European cloud-edge ecosystem, involving multiple EU member states and a large number of industrial and research actors.
In parallel, two new IPCEI—on Artificial Intelligence (AI) and Advanced Semiconductor Technologies (AST)—are currently being created. These initiatives aim to reduce dependency on US and Chinese AI technology as well as to address critical dependencies in semiconductor value chains and hence to support high-risk industrial projects in sectors considered essential for European technological sovereignty.
As of June 2026, the following eight IPCEI candidates are in the design and implementation phase:
- IPCEI AST – Advanced Semiconductor Technologies;
- IPCEI AI – Artificial Intelligence;
- IPCEI CIC – Compute Infrastructure Continuum;
- IPCEI CAM – Circular Advanced Materials;
- IPCEI NUCLEAR – Innovative Nuclear Technologies;
- IPCEI BIOTECHNOLOGY 1 – Biobased Chemicals;
- IPCEI BIOTECHNOLOGY 2 – Biobased Materials; and
- IPCEI BIOTECHNOLOGY 3 – Biobased Food and Feed Ingredients.
As part of recent developments, the May 2026 JEF identified new topics for possible future IPCEIs, which may enter the design phase shortly if confirmed:
- Critical raw materials (being the most advanced);
- Clean and connected vehicles; and
- Quantum technologies.
These recent developments confirm the positioning of IPCEIs as a central instrument of European industrial policy. They also indicate a broadening of scope, with increasing focus on systemic technologies and infrastructure projects supporting the EU’s climate, digital, and sovereignty objectives. Despite their relative complexity, IPCEIs should be one of the first public financing programs to be investigated by companies with substantial R&D activities and as a first industrial investment for the development of new technologies.
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