EU approves German subsidy scheme for slashing industry emissions

(Clean Energy Wire, 19 Feb 2024) The European Commission has approved a subsidy scheme by the German government worth 4 billion euros to help reduce emissions from industry production. Support would be given through two-way carbon contracts for difference (CCfDs), also called ‘climate protection contracts', which compensate companies for the additional costs of switching to climate-neutral production procedures.

Germany's economy minister Robert Habeck welcomed the news as a "trailblazing decision for energy-intensive industry", and said the contracts for difference "ensure sustainable value creation with pioneering, climate-friendly technologies and sustainable jobs in Germany."

The projects supported under the scheme will range from the construction of melting tanks for glass production powered by electricity to the replacement of traditional steel production processes by hydrogen-powered direct reduction plants. The economy ministry said the government would soon launch the first auction in which companies can compete for the support, once the finance ministry and auditors had conducted a final review, reported Handelsblatt.

Four billion euros is the amount the German government intends to make available in a first call for tenders, said the newspaper. The money will not be paid in one lump sum, but in instalments over the fixed 15-year term of climate protection contracts. In this first round, a maximum funding limit of 1 billion euros per application will be set to ensure that smaller and medium-sized projects can also benefit. I

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Clean Energy Wire, 19 Feb 2024: EU approves German subsidy scheme for slashing industry emissions