Germany offers CCS support for mid-sized industrials

A €3.3bn funding programme to help mid-sized companies to decarbonise their processes was announced by Germany's economy ministry today, including through carbon capture and storage/use (CCS/CCU) technologies.

The programme "closes the gap to mid-sized companies" and will complement the carbon contracts for difference already in process for larger industrial firms, federal minister of economic affairs and climate action Robert Habeck said.

There will be annual calls for funding until 2030, with the first call scheduled for September. Companies will then have three months in which to submit their projects.

The programme will be financed by Germany's climate and transformation fund KTF. Given recent intergovernmental spats over next year's budget, Habeck stressed today that this funding is secure and undisputed within the three-party governing coalition.

The programme provides two modules. The first, which continues and expands an expired funding programme, addresses companies aiming to invest in, or research, new production processes that will cut CO2 emissions by at least 40pc.

Investment costs must be at least €500,000 for smaller companies, and at least €1mn for larger companies. Funding is capped at €200mn for each company. Up to 30pc of investments will be funded, with smaller companies getting an extra 10pc or 20pc, depending on their size.

Companies will typically come from the chemicals, foundry, glass or paper industries, the ministry said.

The second module will support investments in CCS/CCU. Investment projects will be eligible for funding of up to €30mn, while industrial research projects may get up to €35mn.

Reflecting the government's carbon management strategy passed in May, funding will be restricted to "hard to avoid" CO2 emissions. In the first call for funding, eligibility will be restricted to investment projects from the lime, cement and thermal waste treatment sectors, with applications for research projects also permissible from the basic chemicals, glass and ceramics sectors.

Germany's waste sector has repeatedly stressed the need for financial support to invest in CCS, given high costs and the volatile EU emissions trading system price.

There is currently one small CCS pilot at a waste plant in Germany, developed by Helmstedt-based firm EEW, a former lignite producer.

Germany's highest emitters, mainly from the steel industry, have their own company-specific and EU-flanked support programmes.

Germany expects to emit around 60mn-130mn t of CO2 equivalent/yr from 2045, the year it plans to become carbon-neutral.

Germany's cement industry suggested in a recently published study that by 2030, about 6.5mn t CO2 could be sequestered in Germany, of which the lion's share would be 4.1mn t of fossil CO2 from the cement industry.

By Chloe Jardine