{"id":140837,"date":"2024-03-20T07:01:00","date_gmt":"2024-03-20T06:01:00","guid":{"rendered":"https:\/\/renewable-carbon.eu\/news\/?p=140837"},"modified":"2024-03-14T12:09:53","modified_gmt":"2024-03-14T11:09:53","slug":"berlin-kicks-off-e23-billion-green-industry-subsidy-scheme","status":"publish","type":"post","link":"https:\/\/renewable-carbon.eu\/news\/berlin-kicks-off-e23-billion-green-industry-subsidy-scheme\/","title":{"rendered":"Berlin kicks off \u20ac23 billion green industry subsidy scheme"},"content":{"rendered":"\n\n\n

Berlin aims to fund the decarbonisation of large industrial emitters through a newly developed auction scheme \u2013 known as \u201cclimate protection contracts\u201d or \u201cCarbon Contracts for Difference\u201d \u2013 that favours companies that can do so most efficiently. <\/p>\n\n\n

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The German government is awarding \u20ac23 billion to companies in 2024 to kickstart the country’s industrial decarbonisation. [EPA-EFE\/CLEMENS BILAN]<\/figcaption><\/figure><\/div>\n\n\n

With the new scheme \u201cwe are promoting modern, climate-friendly industrial plants of tomorrow,\u201d explained Robert Habeck, minister of economy and climate action, on Tuesday (12 March). <\/p>\n\n\n\n

From Tuesday, companies that emit more than 10,000 tonnes of CO2<\/sub> per year can compete for the first share of \u20ac4 billion, disbursed over 15 years.<\/p>\n\n\n\n

A second funding round of \u20ac19 billion will follow in autumn. Companies must ultimately deliver 90% emission reductions.<\/p>\n\n\n\n

Most industrial production, whether it be paper, chemicals or cement, relies on fossil fuels. While companies could reduce their usage, the cost would be too high.<\/p>\n\n\n\n

The German scheme allows companies to submit a fictional CO2<\/sub> price that would allow them to stay in business \u2013 even while switching to cleaner production methods.\u00a0<\/p>\n\n\n\n

These bids could rank from 100s of euro for the tough sectors \u2013 like steel or cement \u2013 to double-digit figures in easier to decarbonise production set-ups like paper production, sweets or glassmaking. <\/p>\n\n\n\n

A producer of glass panes could calculate that a switch to a hydrogen-electric furnace could put them on track to being almost climate-neutral. <\/p>\n\n\n\n

But such a furnace may be twice as expensive as those of the competition\u2019s running on natural gas. Therefore, being climate-neutral may only pay off at a CO2<\/sub> price of at least \u20ac150 per tonne. So that would be the glassmaker\u2019s minimum bid.<\/p>\n\n\n\n

As long as the EU\u2019s CO2<\/sub> price is below the submitted number, these companies get funding from the government. Once prices go over, companies have to pay back the money \u2013 and are incentivised to bid as high as possible while staying in the money.<\/p>\n\n\n\n

Contracts run for 15 years, and a\u00a0two-digit number of companies are said to be interested in the first tranche of \u20ac4 billion on offer. No bid may exceed \u20ac1 billion in total cost to the government, and each individual industry, like paper, is capped at \u20ac1.3 billion.<\/p>\n\n\n\n

From research to the stage<\/strong><\/h3>\n\n\n\n

Scientists developed the scheme as a response to the chicken-and-egg problem in industry: By the time CO2<\/sub> prices are high enough, it would be too late for industry to make a smooth transition.<\/p>\n\n\n\n

\u201cFrom academic proposal to climate policy reality in seven years,\u201d said one of the original researchers<\/a> who proposed the approach in 2017. <\/p>\n\n\n\n

Habeck explained his adoption of the scheme with their spirit of \u201clet\u2019s try something new,\u201d adding that no other industrial country had adopted a similar approach to date \u2013 although many were interested.<\/p>\n\n\n\n

\u201cHopefully, this will kick off the much-needed clean industrial transition, lead to technological progress and avoid several 100 millions tonnes of CO2<\/sub> emissions,\u201d said J\u00f6rn Richstein, who\u2019d worked on the initial concept.<\/p>\n\n\n\n

Habeck\u2019s ministry eyes 350 million tonnes of CO2<\/sub> in savings for the whole scheme.<\/p>\n\n\n\n

In four months, the results of the auction will be made publicly available. Then, companies will be given a three-year-deadline to begin decarbonising.<\/p>\n\n\n\n

In their first three years after the contract officially begins, they must reduce their emissions by 60% rising to 90% in the final year. <\/p>\n\n\n\n

After this multi-billion pilot auction, a second one will see companies compete for \u20ac19 billion \u2013 and there will be no caps on bids and CCS permitted.<\/p>\n\n\n\n

Then, cement and steelmakers \u2013 where investment volumes are high \u2013 may get another shot at state subsidies. The second round has yet to be greenlit by Brussels.<\/p>\n\n\n\n

Previously, Germany has committed \u20ac7 billion to helping the big four steelmakers \u2013 thyssenkrupp, Arcelor Mittal, Salzgitter and Saarstahl.<\/p>\n\n\n\n

Contrary to expectations, steelmakers can qualify for the climate contract scheme \u2013 for their current coal-fired blast furnaces, just not the newly built hydrogen ones.<\/p>\n\n\n\n

Additional tranches of subsidies are expected for 2025 \u2013 ultimately the total sum allotted to the scheme is somewhere around \u20ac50 billion or a \u201cmedium two-digit billion figure,\u201d as the ministry puts it.<\/p>\n","protected":false},"excerpt":{"rendered":"

Berlin aims to fund the decarbonisation of large industrial emitters through a newly developed auction scheme \u2013 known as \u201cclimate protection contracts\u201d or \u201cCarbon Contracts for Difference\u201d \u2013 that favours companies that can do so most efficiently.  With the new scheme \u201cwe are promoting modern, climate-friendly industrial plants of tomorrow,\u201d explained Robert Habeck, minister of […]<\/p>\n","protected":false},"author":105,"featured_media":140845,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","nova_meta_subtitle":"The German government has launched a race for \u20ac23 billion in industrial decarbonisation subsidies, an unprecedented flagship policy that will run over 15 years","footnotes":""},"categories":[5571],"tags":[12922,15386,22131,18764,19340,23807,10743],"supplier":[769,5585],"class_list":["post-140837","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-co2-based","tag-carbon","tag-carbonemission","tag-carbonmarket","tag-climategoals","tag-decarbonisation","tag-greenindustry","tag-useco2","supplier-deutsche-bundesregierung","supplier-european-union"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/140837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/105"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=140837"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/140837\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media\/140845"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=140837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=140837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=140837"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=140837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}