Highlights

• Germany introduces a 6 billion euro industrial decarbonisation programme, including CCS technology.
• The programme covers chemicals, steel, cement, and glass sectors with 15-year climate contracts.
• Competitive auctions will fund projects reducing CO₂ emissions at lowest cost per tonne.

Germany has launched a 6 billion euro industrial decarbonisation programme, which aims to reduce emissions from energy-intensive sectors: chemicals, steel, cement, and glass.

Economy Minister Katherina Reiche revealed that for the first time, carbon capture and storage (CCS) technology will be part of the government’s climate contracts.

This technology traps CO₂ emissions and stores them underground, which allows industries to continue operating with a lower environmental impact.

The programme invites companies to register projects by December 1 for next year’s bidding process, which is scheduled to begin in mid-2026, pending parliamentary budget approval and EU state aid clearance.

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Under 15-year contracts, the government will cover part of the costs for firms switching to cleaner production methods, which helps them cope with volatile energy and carbon prices.

Contracts will be awarded through competitive auctions, with preference given to projects that reduce CO₂ at the lowest cost per tonne. Participating companies must meet binding emission reduction milestones throughout the contract period.

Industry groups welcomed the programme’s inclusion of CCS and its flexible approach, as well as noted the need to balance climate targets with economic conditions.

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Rising energy costs and slower industrial performance have made some firms cautious, making this programme an important step for Germany to continue industrial decarbonisation without compromising competitiveness.

Ends/

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Source: Reuters