Subsidy scheme to cut industry emissions broadened to smaller firms – media

The German government’s plan to introduce a subsidy scheme with so-called “climate contracts” for less climate-damaging industry processes will also include small and medium-sized companies, business-daily Handelsblatt reports. Earlier plans had restricted support to large companies in energy-intensive industries, such as steel and chemicals, but an updated draft regulation now stipulates that a company only has to emit ten kilotonnes of CO2 per year to be allowed to seek a climate contract, Handelsblatt writes. According to the scheme, companies that switch to less CO2-intensive ways of production can apply for subsidies that would cover the cost difference compared to traditional processes. Such “contracts for difference” would be given out through tenders. Companies have to bid for the money they need from the federal government to make it worth their while to switch to green production. Only those companies that want the smallest sum from the state will win the tender. The draft regulation has yet to be adopted by the government, but the economy ministry told Handelsblatt that companies could flag their interest after April.

The “climate contracts” scheme is part of the government coalition’s climate action programme to put the country on track to reaching its climate targets. The scheme has yet to be adopted in full. Decarbonising industry is among the more difficult tasks of the move to climate neutrality by 2045, as whole production processes have to be reinvented and companies must make substantial investments to make the switch.