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Project with a climate impact: Economics Minister Habeck laying the foundation stone for the “Reuter West” district heating power plant in Berlin
Photo: Jens Kalaene/dpa
Federal Economics Minister Robert Habeck (Greens) will start the first round of bidding in Europe for the new climate protection agreements on Tuesday.
These are intended to help sustainably decarbonize energy-intensive industries in particular.
In the first round, the Ministry of Economic Affairs will make up to four billion euros available to companies.
In order to receive funding for production facilities and pipelines for hydrogen, companies must take part in the auction process: They present how many euros they need to save one ton of CO₂ with a new technology.
Anyone who can save greenhouse gases particularly cheaply will be awarded the contract.
If the production of green products becomes cheaper in the future, the companies will pay back to the state.
“The subsidized systems from the first round of bids alone will save several million tons of CO₂,” Habeck told the “Handelsblatt” the evening before.
On Tuesday, Habeck's ministry announced further details.
Accordingly, companies can now apply for climate protection contracts for four months.
The funding should then run for 15 years.
The target for the program is around 350 million tons of CO₂, i.e. up to 20 million tons per year.
This amount of climate-damaging gas should be avoided through funding.
The new instrument strengthens Germany as an industrial location in three ways, said Habeck: It promotes “modern, climate-friendly industrial plants of tomorrow.”
The climate protection agreements would also help industry worldwide to switch to climate-friendly processes.
And they are setting “new international standards for efficient, low-bureaucracy funding.”
The minister's conclusion: "We are securing jobs and competitiveness and protecting the climate," said Habeck.
The Ministry of Economic Affairs emphasized that Germany is the first EU member state to launch climate protection agreements.
Several states in and outside the EU are expected to follow suit in the near future.
“In the medium term, even without state funding”
This is not about investing public money in companies in the long term.
According to the Ministry of Economic Affairs, the climate protection agreements are "initial financing" and the respective technologies are intended to "establish themselves in the medium term even without government funding."
As soon as the specific processes are profitable even without funding, the companies would have to pay money back to the state.
In this case, the companies can terminate the climate protection agreement with a three-year notice.
The key question of the climate protection agreements is: Who can make their production CO₂-neutral in the cheapest way?
The state only supports what needs to be supported.
The program is a response to the fact that many costs are still uncertain - such as the future prices for hydrogen.
“Therefore, many industrial companies are currently avoiding these investments,” the ministry explained in a statement.
One advantage of the instrument: the contracts with the companies do not have to be examined individually by the EU.
This would be necessary for other forms of funding for reasons of competition and Community law.
Only companies that had already taken part in a preparatory process last summer are allowed to take part in the first bidding process.
There will be further bidding procedures for all other industrial companies later, the next one in the fall.
Two more rounds of bidding are planned for next year.
Overall, the plan is for a mid-double-digit billion amount, but over the entire contract period of 15 years.
“The funds will then gradually flow out,” says Habeck.
A total volume of 19 billion euros is being discussed, but this has not yet been determined.
BDI welcomes the contracts
In principle, the funding is available to systems that, in the status quo, emit at least 10,000 tons of CO₂ per year.
Several small systems can also apply together as a consortium.
No individual project may receive more than one billion euros in funding.
Habeck said that the climate protection agreements were a “very small and medium-sized business-friendly program”.
The Federation of German Industries (BDI) welcomed the start of the tenders.
“Extensive government support is necessary if the politically desired transformation towards climate neutrality is to succeed in a short time,” said BDI President Siegfried Russwurm, who pointed out the high costs of the change.
According to the budget ruling, there would be significantly less funding available for climate protection agreements in the current year than originally planned.
The federal government must secure financing for the coming years.
mamk/bem/AFP/dpa