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Environment: Habeck wants to extend “climate protection contracts” to medium-sized companies

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The federal government wants to push ahead with the climate-friendly restructuring of the economy. An instrument could play a key role in this.

Federal Minister of Economics Robert Habeck (Greens) wants to extend the billion-euro state “climate protection contracts” planned for the restructuring of the economy to medium-sized companies. In addition, companies should not be able to apply to receive state funds – auctions are now planned.

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This emerges from a funding guideline from the Ministry of Economics, which went into the departmental vote. The “Handelsblatt” had previously reported on it.

In order to support companies in converting to climate-friendly production, Habeck is planning funding via “climate protection contracts”. This should compensate for cost disadvantages and promote investments in climate-friendly production processes.

According to a ministry paper, an amount in the double-digit billions is likely to be needed for the climate protection agreements and the “Decarbonization of Industry” funding program. The European Commission has yet to approve the program. If possible, companies should be able to express their interest as early as April.

Germany wants to achieve climate neutrality by 2045. However, the switch to climate-friendly production is often associated with high costs and, above all, price risks, according to the paper, with a view to energy-intensive sectors such as the steel industry. “Therefore, many industrial companies are currently still avoiding these investments.”

What is a climate protection agreement?

In the case of a climate protection agreement, the state should guarantee the company a compensation payment that compensates it for the higher costs of climate-neutral production. In addition, the company should be protected against fluctuations in the CO2 price and other risks. “As soon as green production is profitable without state subsidies, companies have to pay money to the state on the basis of the climate protection agreement,” says the ministry paper.

In the case of climate protection agreements, investment and operating costs are to be subsidized over a period of 15 years. Companies should only be funded if the electricity used for industrial production was generated 100 percent from renewable energies.

According to a revised draft of the funding guidelines, the program should now also be open to companies with smaller production facilities. In addition, several smaller plants could apply for funding as a consortium. “Small and medium-sized companies benefit from climate protection agreements not only indirectly, for example through orders in plant construction, and in the medium term because the costs of climate-friendly systems fall. They can also apply for direct funding.”

Companies should have to bid how many euros they need to avoid one ton of CO2 with their technology. As a result, only those companies that have calculated particularly well should receive a climate protection contract. The amount of the subsidy is based on the respective additional costs of the climate-friendly system compared to the conventional system.

Source: Stern

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