Carbon contracts for difference: Germany’s new instrument to decarbonise its industry
Carbon contracts for difference: Germany’s new instrument to decarbonise its industry

Author(s): Michał Kędzierski
Subject(s): Politics, Energy and Environmental Studies, Geopolitics
Published by: OSW Ośrodek Studiów Wschodnich im. Marka Karpia
Keywords: Germany; decarbonisation
Summary/Abstract: Germany has launched the implementation of a new, innovative programme to support the decarbonisation of its energy-intensive industries. The use of the so-called carbon contracts for difference will, for the first time, make it possible to subsidise not only investments in new installations but also the current operational costs, as the state intends to cover the difference between the costs of conventional and low-carbon energy production until the latter becomes more profitable. In line with Berlin’s concept, this decision is expected to bring a breakthrough in the decarbonisation of its industry, and also to enable German companies to gain competitive advantage, collect know-how, and improve & commercialise new technologies which are viewed as future-proof.

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