The Bioenergy Sustaining the Future (BESTF) initiative will provide funding to collaborative projects and will result in demonstration at a pre-commercial stage.
The countries involved are Denmark, Finland, Germany, Portugal, Spain, Sweden, Switzerland and the UK, which is co-ordinating the scheme and has contributed €12.5m towards it.
UK Energy Minister John Hayes said: “Bioenergy has an important role to play in our energy mix, helping cut carbon as well as support jobs and spur on economic growth on a national and international scale.
“This scheme will help businesses develop a range of different innovative projects by combining public and private sector investment to make the most of this exciting technology.”
The UK money from the UK is being provided by the Department of Energy and Climate Change (€7.4m) and the Technology Strategy Board jointly with the Biotechnology and Biological Sciences Research Council (€5.1M).
Organisations will be invited to put forward proposals for innovative projects in early 2013, with grants expected to be made in early 2014.