Carbon Contracts for Difference (CCfD) program for energy-intensive industries

Source: International Energy Agency
Last updated: 11 May 2023

The German government announced its decision to provide funding to energy-intensive industries via a ‘carbon contracts for difference’ (CCfD) program. All companies reducing CO2 emissions and converting their production to climate-friendly production will be eligible to benefit from this program and be able to receive grants independently from their production sizes, therefore including small and medium-sized companies.  The aim of this program is to accelerate the phasing-out of fossil fuels in energy-intensive industries and convert their production processes in green production (for instance in production facilities and pipelines for hydrogen). 

According to the Carbon Contract for Difference concept, energy-intensive industries will be compensated  by climate protection agreements for a period of 15 years to cover for their additional costs (OPEX and CAPEX) to convert their production. These climate protection agreements thus make green technologies more attractive for energy-intensive industries.  

A double-digit billion budget is expected to be allocated by the federal government for this scheme.

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