March 13, 2024
Source: Energy & Management Powernews
The first bidding process for climate protection contracts worth a total of four billion euros has started. Companies can apply for funding for more climate-friendly production.
On March 12, the Federal Ministry for Economic Affairs and Climate Protection (BMWK) launched the first bidding process for the Climate Protection Contracts for Difference (CfD) funding program. Companies in the energy-intensive industry that successfully participated in the preparatory process in summer 2023 can apply for 15-year funding for their major transformation projects within the next four months. The funding volume amounts to a total of four billion euros. The contracts will then be awarded to the most cost-effective bidders.
Federal Minister for Economic Affairs Robert Habeck (Greens) called this a good day for Germany as an industrial location, climate protection and sustainable jobs. "With the climate protection contracts, we are firstly promoting modern, climate-friendly industrial plants of tomorrow," he told journalists. This would create new technologies, value chains and infrastructures. "Secondly, this will help industry worldwide to switch to climate-friendly production," hopes Habeck. The climate protection agreements also set new international standards for efficient and low-bureaucracy funding.
Avoid 350 million tons of emissions
The climate protection agreements are intended to initiate modern, climate-friendly production processes in energy-intensive industrial sectors, for example in the paper, glass, steel and chemical industries. The subsidized plants from the first bidding round alone are expected to save several million tons of CO2. Germany is the first EU member state to launch funding through climate protection contracts. The new and innovative funding instrument had previously successfully passed through the European Commission's state aid approval procedure.
Climate protection contracts compensate for the additional costs compared to conventional processes in areas where climate-friendly production processes cannot currently be operated competitively - for a term of 15 years. Overall, emissions of around 350 million tons of CO2 are to be avoided over the term of the funding programme until 2045. This corresponds to GHG reductions of up to 20 million tons per year, which is just over a third of the sector target for industry for 2030.
Requests from associations
Hydrogen production plants and pipelines are also to be incentivized by the CfD. Numerous countries within and outside the European Union want to launch similar funding instruments in the near future. The Federation of German Industries (BDI) welcomed the launch of the tenders. At the same time, BDI President Siegfried Russwurm called for the German government to secure funding for the CfD for the coming years.
Martin Kaiser, Managing Director of Greenpeace Germany, called for strict criteria for the contracts. Funding should only go to companies
"that do not produce CO2 in the first place - for example by using modern technology and clean energy". If the contracts reward those who save the most CO2 for the least money in a purely market-based way, "the contracts will chain the country to old, climate-damaging technologies", Kaiser fears. Dangerous sham solutions such as the injection of CO2 (CCS) or hydrogen from natural gas should also not be funded.
Bids can be submitted via the federal government's "Easy-Online" funding portal. Companies can contact Contact by Mail with specific individual questions.
The funding guideline for CfD is available on the BMWK website.
Author: Susanne Harmsen
Accessibility
Language
