German Economic Minister launches bidding process for Climate Protection Contracts

The Federal Ministry for Economic Affairs and Climate Protection (BMWK) today launched the first bidding process for the Climate Protection Contracts funding programme. Companies in the energy-intensive industry that successfully participated in the preparatory procedure 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.

Federal Minister Robert Habeck commented: "Today is a good day for Germany as an industrial location, for climate protection and for sustainable jobs in our country. Firstly, with the climate protection agreements we are promoting modern, climate-friendly industrial plants of tomorrow. This will create new technologies, value chains and infrastructures. Secondly, this helps industry worldwide to switch to climate-friendly production. And thirdly, with the climate protection agreements, we are setting new international standards for efficient and low-bureaucracy funding.

With the climate protection contracts, we are ensuring that the transformation in the companies succeeds. We are securing jobs and competitiveness and protecting the climate: the subsidised plants from the first bidding round alone will save several million tonnes 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 the European Commission's state aid approval procedure. 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.

To this end, climate protection agreements offset the additional costs compared to conventional processes in areas where climate-friendly production processes cannot currently be operated competitively - for a period of 15 years. This directly avoids large quantities of greenhouse gases. In total, emissions of around 350 million tonnes of CO₂ are to be avoided over the term of the funding programme until 2045. This corresponds to GHG reductions of up to 20 megatonnes per year, i.e. just over a third of the sector target for industry for 2030.

Source: German Federal Ministry of Economic Affairs, Photo: Fotolia