Energy-intensive companies can hope for state aid if they want to convert their production to climate neutrality. Not only large companies, but also medium-sized companies should benefit from the “climate protection agreement”.
Energy-intensive companies can still apply for billions of dollars in government aid this year to switch to CO2-neutral production. This was announced by Economy and Climate Minister Robert Harbeck. The green politician speaks of billions of dollars that will be spent over the next 15 years to help companies in the steel, chemicals, cement or glass industries through so-called climate protection agreements.
On top of that, the money is intended to compensate for higher costs resulting from a switch to climate-friendly production. The prerequisite is the use of 100% green electricity and the fact that the company previously emitted 10 tons of CO2 per year. This is why the climate protection agreement also targets energy-intensive medium-sized companies and not just very large ones, Habeck stresses.
Those with the lowest rebuilding costs should be supported
The aim is to drastically reduce greenhouse gas emissions in industry while maintaining the competitiveness of German companies. “We want to reduce CO2 emissions and at the same time have an entire industry in Europe,” Habeck said. A single tender process is currently planned for this year, due to start on Tuesday.
Companies then have two months to express their interest in a so-called preparation process. If the subsidy amount is not used up in the next auction before the end of the year, there will only be more bidding, Harbeck said. Funding will be provided during a tender process. That means companies have to bid on how much government support they need to avoid massive carbon emissions as technology shifts.
Contracts are then awarded to companies that wish to switch production at the lowest cost. In return, documentation and verification obligations, which usually impose heavy burdens and complex approval procedures on companies, will no longer apply within the legal framework, according to the ministry.
confident habaek affordability
According to Harbeck’s estimates, 350 megatons of CO2 could be saved by 2045. “With this tool alone, this is about a third of the target for the industrial sector,” Habeck said. Germany is a pioneer in this form of low-bureaucratic support, which has only been attempted so far by the Netherlands.
The exact amount of the total funding has not been clarified. Still, Harbeck is adamant that there will be no more problems with the budget process. Furthermore, the European Commission has approved the instrument in principle, even though there are still outstanding issues regarding state aid law. The Greens politician said that, among other things, it had to be clarified how the subsidies were combined with investment aid for big companies.