Reading the public coverage, you might think the ZIM reform was finished with the turn of the year 2024/2025. In fact 2026 is the year in which it becomes clear what consequences the redrafted funding directive, brought into force by Federal Gazette notice of 11 December 2024, really has for the application and pipeline planning of mid-sized companies[1]. The rates have changed since 1 January 2025, the project management agencies have been re-cut, funding ceilings have been raised, and the 2026 budget fixes an annual budget of €558m for the first time in section 09 of the Federal Ministry for Economic Affairs and Energy (BMWE)[9]. The practical consequences for single projects, cooperation projects and innovation networks become visible in the shape of the 2026 pipeline — exactly where innovation managers now have to readjust.
The status quo: ZIM before the reform
The Zentrales Innovationsprogramm Mittelstand is the federal government's largest technology- and sector-neutral R&D funding instrument for the Mittelstand. Since 2008 it has funded market-oriented research and development projects by companies with up to 1,000 employees, and by research institutions cooperating with them[6]. The legal basis for the state aid component is Article 25 of the General Block Exemption Regulation (GBER, Regulation (EU) No 651/2014), which defines the maximum aid intensities for industrial research and experimental development[8]. ZIM does not exhaust those intensities but stays comfortably within the state aid ceilings.
The 2020 directive, in force until the end of 2024, was organised into three funding formats: single projects for individual companies, cooperation projects between at least two companies or between a company and a research institution, and innovation networks with at least six cooperating companies. Feasibility studies were subsidised in addition, to make a systematic technical pre-assessment possible before the R&D project itself. This three-part structure survives the reform; what changes are the ceilings, the routes in for small companies and R&D first-timers, and the allocation of the project management agencies[2].
The external evaluation commissioned by the BMWK from Prognos AG and ZEW Mannheim, published in July 2024, is the empirical basis for the reform. For the period since 2020 it documents around 14,000 approved projects with a funding volume of €2.3bn and a leverage effect of roughly 1.9: for every euro of grant, the funded companies spend around 90 cents more on R&D[5]. For around 80 per cent of subsidised companies, ZIM funds triggered further R&D activity that would not have been started without the grant. At the same time the evaluation identifies room for improvement: access for first-time R&D applicants, cost ceilings in the face of inflation-driven staff costs, processing times and the visibility of the feasibility study[10]. All three findings fed into the redraft.
The core changes in 2026
The directive published in the Federal Gazette on 11 December 2024 replaces the 2020 version with effect from 1 January 2025 and, as things stand, is limited to 30 June 2027[1][2][3]. For the 2026 funding year — and thus for applications now entering pipeline planning — three structural changes matter.
First, the maximum eligible costs per project type have been raised. For single projects they rise from €550,000 to €690,000; for cooperation partners in an R&D consortium from €450,000 to €560,000 per company, with an overall ceiling per cooperation project of €3m. For research institutions in a cooperation project, the ceiling rises from €220,000 to €280,000. For innovation networks, eligible costs rise from €420,000 to €490,000 for national projects and from €520,000 to €600,000 for international networks[3]. The increases essentially compensate for the staff cost increases of 2021 to 2024 and open room for somewhat larger project scopes without touching the GBER limits.
Second, access to the feasibility study has been widened. In the 2020 version the study was conceived as an optional instrument ahead of the R&D application proper and was rarely used in practice. The reform positions it deliberately as an entry format for young companies and R&D first-timers: shorter processing cycles, reduced application requirements and a clearly signposted sequence from study to full application. The evaluation had documented a structural need to adjust here[5].
Third, the project management agencies have been re-cut. Since 1 January 2025, AiF Projekt GmbH is responsible exclusively for cooperation projects; single projects, feasibility studies and innovation networks are handled by VDI/VDE Innovation + Technik GmbH[4]. For both strands, applications run fully digitally through the Förderzentrale Deutschland (FZD), split operationally into the ZIM-KOOP (AiF) and ZIM-Foyer (VDI/VDE) portals. For companies running single and cooperation projects in parallel, the split means serving two project management agencies at once — with separate status logics, but a unified application standard.
The new funding rates
The ZIM funding rate differs by company size, project type, location in a structurally weak region and international cooperation. The reform keeps this system but deliberately raises the rates for small companies and R&D first-timers.
For single projects, funding rates run between 25 and 45 per cent of eligible costs depending on company size. Small companies in structurally weak regions reach the ceiling of 45 per cent, medium-sized companies typically 35 per cent, large companies with up to 1,000 employees 25 per cent[3]. For cooperation projects the rates rise by five percentage points, and for international cooperation through the IraSME initiative the supplements can take the total to between 55 and 60 per cent. Research institutions in cooperation projects receive 100 per cent of their non-economic costs, which effectively guarantees that industry-oriented research institutes can join in.
The ceiling for contracts to third parties within an R&D project has been raised by the reform to 35 per cent of direct staff costs[2]. For projects that put specialised development steps out to tender — prototyping, numerical simulation or preparatory certification work, say — this creates room in the costing. Note that the 35 per cent limit refers exclusively to direct staff costs, not to the total assessment base; external work with a research contribution has to be delimitable in substance and identified as such in the application.
In state aid terms, ZIM continues to operate within the GBER. Article 25 permits intensities of up to 50 per cent for industrial research and 25 per cent for experimental development, each with SME supplements of 10 and 20 percentage points respectively and additional bonuses for effective collaboration or wide dissemination of results; for experimental development an overall ceiling of 80 per cent is permitted[8]. The ZIM rates normally sit well below that, so the state aid headroom is generally not an operational restriction. It only becomes relevant in combination cases — that is, when ZIM is cumulated with other aid for the same project.
One frequently overlooked change concerns repeatability: since September 2023, up to two approvals within twelve months per company are possible again; the 24-month bar that previously applied was lifted and this was confirmed in the 2025 directive[7]. For companies running product and platform R&D in parallel, this is a structural opening: a single project plus a cooperation project within one calendar year is workable again, provided the projects are delimitable in substance and do not touch the same expenditure.
Deadlines and submission windows
Unlike many BMBF or EU programmes, ZIM works without fixed deadlines. Applications can be submitted all year round and exclusively in digital form through the Förderzentrale Deutschland; they are processed in the order received[4]. This rolling application process is one of the points the 2024 evaluation identified as core architecture worth keeping[5]. The reform changes nothing about that principle.
What has changed nonetheless is the actual economics of processing. With the retendering of the project management agencies as of 1 January 2025, AiF Projekt GmbH and VDI/VDE Innovation + Technik GmbH are each active with their own digital portal. The handover of responsibility happened without a break in ongoing processing, but it has practical consequences: applications submitted in the fourth quarter of 2024 under the old agency structure are generally decided under the 2020 directive, while applications submitted from 1 January 2025 fall under the 2025 directive[2].
Operationally that means: the date of submission is the legally decisive cut-off for which rates apply. For ongoing projects in the 2026 pipeline planning, it means application windows can be aligned with your own technical maturity milestones rather than a formal BMWE date — with two caveats. First, the budget proviso: approvals are subject to the availability of budget funds. If the federal budget moves into provisional budget management — as happened in 2024/2025 — approvals cannot be issued for the time being[4]. For 2026 the budget is anchored at €558m in section 09 of the BMWE[9]; on that basis the risk of a funding stop is considerably lower than during the provisional budget management phases of 2024/2025, but not ruled out.
Second, the two-week rule for cooperation projects: the applications of the individual project partners have to reach the project management agency within fourteen days for them to count as belonging together. If one partner is late, the receipt date of the whole project shifts — with consequences for the budget period in which the approval is issued[3]. This rule is not new with the reform, but the split of the agencies into AiF and VDI/VDE makes it matter more for coordination.
Effects on the project pipeline
For pipeline planning in 2026, the reform implies four practical shifts that should show up in roadmap work.
First: the higher cost ceilings allow larger project scopes. A single project with eligible costs of €690,000 covers a grant of around €241,500 at a funding rate of 35 per cent; at 45 per cent in a structurally weak region, €310,500. The €3m total ceiling for a cooperation project opens an operationally meaningful costing frame for consortia of three to four companies plus a research institution[3]. Projects that were chopped up or shrunk in 2023/2024 because of the old ceilings can now be brought together in one application.
Second: the feasibility study becomes a genuine planning instrument. Anyone planning an R&D project with significant technical uncertainty can use the study to run a clarification limited in time and cost before activating the full application logic of a cooperation or single project. For first-time R&D applicants this cuts the entry overhead considerably; for experienced innovation managers it is a way to secure lead-in budget in uncertain technology fields without having to fix the cooperation architecture prematurely[5].
Third: the 35 per cent limit for subcontracting to third parties changes costing practice. Particularly in production-oriented industries, where prototyping, preparatory certification work or highly specialised simulation is put out to tender, larger shares of direct staff costs can now be covered externally[2]. Internal team sizing can be leaner and the overall architecture of a project becomes more modular. The condition: every external service has to be documented with a research contribution of its own — pure contract manufacturing or routine services are not eligible.
Fourth: the reinstatement of the two-approvals-per-year rule changes the strategic roadmap. A company working on two clearly separable R&D strands in parallel — a platform-oriented core project and a client-specific development project, say — can now address both in a single funding year instead of pushing the second into the following year[7]. That matters operationally above all for companies with a high R&D ratio and a diverse product pipeline.
Taken together, the reform shifts the operational centre of gravity in pipeline work from raising funds to coordinating substance and timing. A good ZIM application portfolio in 2026 depends less on whether you submit at all than on the order, the project scope and the agency. Questions of resource allocation, capacity planning and sequencing gain weight; the question of the funding rate itself is usually secondary, because the relevant rates are already secured by the increases in the reform.
Transitional arrangements
The reform was introduced without a formal transitional phase. For approvals granted under the 2020 directive, the conditions binding at the time continue to apply until the end of the project. For applications submitted after 1 January 2025, only the new directive applies — regardless of when the project was designed internally or agreed with cooperation partners[1][2]. The date of submission is the only decisive dividing line in either direction.
For ongoing projects under the old directive, a switch to the new version is not provided for. Topping up to the new ceilings is not possible for projects already approved; the assessment base remains the one in the grant notice. Anyone wanting to extend an ongoing project substantially has to check whether the extension is possible within the existing notice or whether a follow-on project should be submitted as a new application to the responsible agency. The latter then falls under the new directive and benefits from the higher ceilings.
The handover of responsibility between the agencies was completed with an orderly data transfer. Applications submitted to AiF Projekt GmbH or VDI/VDE Innovation + Technik GmbH before 1 January 2025 are processed to completion within the old allocation. Ongoing projects stay with the agency that issued the approval — for cooperation projects from the 2020 era this means continued handling by the previous structure, not necessarily by AiF Projekt GmbH in its new role[4].
In state aid terms the 2025 directive, like its predecessor, counts as an aid scheme under Article 25 GBER. The GBER cumulation rules are unchanged: the same eligible costs may not be funded twice from EU, federal or state funds, and the cumulation limits laid down in Article 8 GBER must be observed[8]. In practice that means: ZIM can be combined with the research allowance under the FZulG, provided the same person-hour is not counted twice; ZIM cannot be combined with other federal funding for the same expenditure.
The directive's expiry on 30 June 2027 is a structural commitment to a further evaluation and, where appropriate, a successor directive[2][3]. For pipeline planning it means that follow-on projects with running times extending beyond 30 June 2027 can be approved under the current version; a cut or restructuring after the expiry date is not legally provided for. A project submitted and approved in 2026 continues under the 2025 conditions even if a successor directive applies from July 2027.
Seen as a whole, the ZIM reform of 2025/2026 is less a programmatic break than a systematic updating of the conditions to inflation-driven cost increases and to the evaluation's recommendations. For existing applicants it is largely predictable, for first-time R&D applicants a noticeably easier way in, and for innovation managers above all a reason to recalibrate the timing of their own pipeline. We bundle the steps that requires — delimiting the project, choosing the project type, costing within the ceilings, coordinating between AiF and VDI/VDE, checking cumulation against the FZulG and state programmes — and keep the status of every single application item traceable across the whole procedure.
- [1]Directive on the Zentrales Innovationsprogramm Mittelstand (ZIM) — R&D funding, Federal Gazette AT 11.12.2024 B1Bundesanzeiger Verlag / BMWK · 2024Open source
- [2]ZIM directive 2025 — publication page with full text and core contentBMWE / ZIM (zim.de) · 2025Open source
- [3]Directive on the Zentrales Innovationsprogramm Mittelstand (ZIM) — consolidated PDF versionFederal Ministry for Economic Affairs and Climate Action (BMWK) · 2024Open source
- [4]Applications open under the 2025 ZIM directiveBMWE / ZIM office · 2025Open source
- [5]Evaluation confirms the positive effects of the Zentrales Innovationsprogramm Mittelstand (Prognos / ZEW, commissioned by the BMWK)BMWK / Prognos AG / ZEW Mannheim · 2024Open source
- [6]Zentrales Innovationsprogramm Mittelstand (ZIM) — programme pageFederal Ministry for Economic Affairs and Energy (BMWE) · 2025Open source
- [7]ZIM: two approvals within twelve months possible again under ZIMAiF Projekt GmbH (ZIM project management agency for cooperation projects) · 2023Open source
- [8]Regulation (EU) No 651/2014 (General Block Exemption Regulation, GBER), Article 25 — aid for research and development projectsEuropean Commission, EUR-Lex · 2014Open source
- [9]Budget 2026 — BMWE topic page with the ZIM allocation in section 09Federal Ministry for Economic Affairs and Energy (BMWE) · 2025Open source
- [10]Expert report on the effectiveness of the funded R&D projects and innovation networks in ZIM (RKW Kompetenzzentrum, 04/2025)RKW Kompetenzzentrum, commissioned by the ZIM office · 2025Open source
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