Germany launches 6-billion-euro industrial decarbonization program, includes CCS technology
Katherina Reiche, Germany’s Economy Minister, announced on Monday a 6-billion-euro ($7 billion) funding project focused at industrial decarbonization, incorporating carbon capture and storage (CCS) technology into the country’s climate protection contracts for the first time.
The program targets energy-intensive sectors such as chemicals, steel, cement and glass, as Germany navigates stringent climate targets amid concerns over industrial competitiveness. Firms have now till December 1 to register projects for next year’s bidding process.
Bidding is set to launch mid-2026, contingent on parliamentary budget approval and EU state aid clearance.
The new round marks an expansion from last year’s program by including CCS technology, which traps CO2 emissions and stores them underground.
Under a 15-year contract, the government would reimburse expenditures for businesses that convert to cleaner production methods, shielding them from volatile energy and carbon prices.
Contracts will be awarded through competitive auctions, with projects requiring the smallest subsidy per tonne of CO2 saved receiving priority. In return, the subsidized companies will have to satisfy binding emission reduction targets.
Industry groups endorsed the inclusion of CCS and the flexible approach, highlighting the importance of pragmatic solutions to balance climate objectives with economic pressures such as rising energy costs and declining industrial output.
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