The German Ministry for Economic Affairs and Climate Action (BMWK) has awarded €2.8bn in decarbonisation subsidies to 15 industrial companies selected in the first round of climate protection contracts. The selected companies will receive a total maximum support of about €2.8bn for their CO₂ savings by converting their production process, with the support being paid out in arrears (once they have achieved their annual GHG emission reduction target) for a 15-year period. The subsidy is subject to changes according to the prices of energy sources and certificates in EU emissions trading, with the maximum funding per project varying according to their proposed technology and their production processes. The projects have the potential to avoid up to 17 MtCO₂eq over the term of the contract.
The first round of climate protection contracts started on March 2024, under a new auction procedure where energy-intensive industrial companies submit an offer suitable for the implementation of new technologies and endure competition. The first round aimed to provide up to €4bn in subsidies to companies in the steel, glass, paper, and chemicals sectors. The award aims to provide planning security for the companies and ensure flexible state payments, according to the awardees needs to implement decarbonisation economically.
The preparatory process for the second round of climate protection contracts started in July 2024, with project proposal reception closing at the end of September 2024. The auction is scheduled to start before the end of 2024.
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