Through this programme, placed under the support of the Federal Ministry of Economics and Climate Protection (BMWK), the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) focuses on energy-intensive industries that aim to reduce process-related greenhouse gas emissions that are difficult or impossible to avoid using the current state of the art, as far as possible and permanently. The funded projects make a substantial contribution on the way to greenhouse gas neutrality, combined with a clear perspective for the medium to long-term, complete replacement of fossil fuels and raw materials. The funded projects have a high innovative and demonstration character and should be transferrable to other companies as models. The directive aims to reduce annual greenhouse gas emissions from energy-intensive industries by 2.5 million tonnes of CO2 equivalents in 2030.

As part of the decarbonisation of industry programme, the Federal Government will expand the pilot scheme for carbon contracts for difference. Carbon contracts help mitigate the higher operating costs of low- and zero-emission processes. The Chemistry4Climate platform will also be set up as part of the programme.

In June 2023, the government announced approximately €50 billion would be made available for carbon contracts for difference and invited firms to make bids for funding to decarbonise their operations.

Funding programme ‘Decarbonisation of Industry’

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Guide to the Funding Programme on the Decarbonisation of Industry

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Either money or something of monetary value is transferred between two or more organisations, people or countries.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Actions to reduce emissions in energy generation and supply.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

The activities of industries that transforms raw materials into finished goods through industrial processes.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

the fair distribution of risks and opportunities of climate change and the transition to a regenerative economy, cognisant in particular of disproportionate impacts on vulnerable communities and the working class

Guide to the Funding Programme on the Decarbonisation of Industry

Target

Policy instrument

Climate justice

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance