Germany has announced a €6 billion ($7 billion) funding initiative to support industrial decarbonisation, marking the first time carbon capture and storage (CCS) technology will be incorporated into the country’s climate protection contracts.
Economy Minister Katherina Reiche unveiled the programme on Monday, describing it as a major step in helping energy-intensive industries transition towards low-carbon production while maintaining competitiveness. The scheme targets sectors such as chemicals, steel, cement and glass, which are among the most difficult to decarbonise.
Companies have until 1 December 2025 to register their projects for consideration in next year’s bidding round. The competitive auction process is expected to begin in mid-2026, subject to parliamentary budget approval and EU state aid clearance.
The new funding round expands on last year’s scheme by integrating CCS — a technology that captures carbon dioxide emissions from industrial processes and stores them underground — into Germany’s broader climate strategy.
Under the initiative, the government will offer 15-year contracts subsidising the costs of adopting cleaner production technologies, providing companies with greater protection against fluctuating energy and carbon prices. Projects will be selected based on the lowest subsidy required per tonne of CO₂ avoided, and successful bidders will be bound by emission-reduction milestones.
Industry associations have welcomed the inclusion of CCS and the flexible design of the programme, saying it reflects a pragmatic approach to balancing Germany’s climate objectives with its economic challenges, including high energy costs and weakening industrial output.
