Four years after its launch, the European Innovation Fund, set up with US$43 billion EU support to combat climate change, has failed to achieve its goals.

Despite its support for pioneering projects such as the first giant green steel factory, many of the Fund’s projects face difficulties in getting off the ground. This has raised concerns among climate experts about the European Union's ability to achieve its climate goals by 2040.

The fund allocated US$6.5 billion to a number of clean technology projects, including carbon capture projects at the French gas company Air Liquid SA and the Swiss cement company Holcim.

The fund also supports other oil and gas companies, such as Shell and the German energy utility operator RWE AG, in the field of hydrogen production, in addition to projects in the sectors of solar energy, renewable energy technologies, and the battery industry.

However, of the US$810 million the fund provided to manufacturing companies, 50% of these companies announced that they would close projects or lay off employees, according to Bloomberg Green Analytics.

Support for the European Innovation Fund faces problems that weaken its impact due to the US inflation control law, in addition to cheap Chinese products.

The US inflation control law, which injects a half-trillion-dollar support package into the clean energy sector, has attracted corporate investment away from Europe.