Climate protection agreements: EURO 19 billion for energy-intensive companies

Climate Protection Contracts: Objectives and Funding Details

The Climate Protection Contracts are designed to financially support companies in advancing the construction and operation of environmentally friendly industrial plants. These contracts, based on the concept of Carbon Contracts for Difference (CCfD), aim to offset the additional costs incurred by companies in emissions-intensive industries when building or converting facilities to more climate-friendly variants. This includes covering the capital expenditures (CAPEX) and operational expenditures (OPEX) compared to plants using current technologies.

The funding supports costs for transitioning to eco-friendly production methods, as well as the development and implementation of technologies to reduce greenhouse gas emissions. Essentially, it covers the additional costs of retrofitting compared to conventional and state-of-the-art production methods.

Who is Eligible for Funding? What Are the Specific Requirements for Projects?

Eligible applicants are companies as defined in Section 14 of the German Civil Code (BGB), including municipalities, municipal enterprises, and companies, as well as municipal associations, provided they are economically active. Multiple partners can form a consortium if they are involved in the production of one or more products.

The application process is two-phased:

  1. Preliminary Phase: Applicants submit a project outline.
  2. Bidding Phase: After approval of the project outline, applicants are invited to submit a bid. The bid is based on the planned investment amount relative to the emissions savings.

To successfully participate in the Climate Protection Contracts, the proposed project must meet several conditions:

  • Minimum Investment Volume: The investment must be at least €15 million and not exceed €1 billion.
  • Emission Reduction Target: The project must have a minimum average annual greenhouse gas emission reduction of 10,000 tons of CO2 equivalents.
  • Reference System Compliance: The new production process must be assignable to a predefined reference system, representing the current state-of-the-art production method for a product.
  • Emission Reduction Percentage: The new production process must technically enable a relative reduction in greenhouse gas emissions by at least 90% compared to the reference system within the contract duration and achieve this reduction in the last 12 months of the contract.
  • Pre-competition Procedure Success: Successful participation in the preliminary procedure is required.

When Does the Competition Start and How Can Interested Companies Apply?

The next round of preliminary procedures is expected to begin in summer 2024. Projects that have successfully completed the preliminary procedure can participate in the bidding process in autumn 2024. The Federal Ministry for Economic Affairs and Climate Action (BMWK) invites participation in the preliminary procedure.

Contact for Interested Companies

If your company is a promising candidate for a Climate Protection Contract and you want to prepare your company for the energy transition, please contact Kai Ruske from cruh21.

Author Information:

Kai Ruske has been with cruh21 since September 2023, leading and coordinating the BMBF-funded LNG2Hydrogen project. He brings extensive experience from various funding projects and advisory roles in grant acquisition. In this capacity, he supports ongoing funding projects and assists in applying for new ones. He also provides expert advice to clients on grant acquisition and administration. Previously, Kai Ruske was involved in various projects at the Logistics Initiative Hamburg, handling intelligent transport systems, urban logistics solutions, and digitalization topics. His expertise includes project coordination and management of complex funding projects, as well as developing funding strategies for innovation projects.

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