The European Commission has approved a €5bn German scheme to help companies subject to the EU Emission Trading Scheme (EU ETS) decarbonise their production processes. The scheme is aimed at helping the German industry reduce CO2 emissions in their production processes thanks to technologies such as electrification, hydrogen, carbon capture utilisation and storage (CCUS), and energy efficiency measures.
The projects supported under the scheme will range from fuel switches in the cement and lime sector to electrification in the chemical sector, and the replacement of traditional steel production processes by hydrogen direct reduction processes. The beneficiaries of the scheme will be companies active in sectors subject to the EU ETS, such as the chemistry, plaster and glass sectors. The projects will need to achieve a 60% emission reduction in three years and a 90% emission reduction by the end of the supported project.
The projects that will benefit from the aid will be selected through an open competitive bidding process. Under the scheme, the aid will take the form of two-way carbon contracts for difference (Climate Protection Contracts), with a 15-year duration.
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