Germany’s Carbon Contracts for Difference
Klimaschutzverträge (CO2-Differenzverträge, Carbon Contracts for Difference) provide 15 years of financial support to energy-intensive companies, covering the additional costs of transitioning to low-carbon production. We can help you prepare a competitive application and maximise your chances of securing funding in the next round.
The scheme is run by the Federal Ministry for Economic Affairs and Energy (BMWE). The contracts cover additional investment and operating costs compared with a conventional reference system and protect against volatile CO2 prices. The support level follows the CO2 price in the EU ETS: when the price rises, the state compensation falls; when it falls, the compensation can rise.
The scheme is technology open. Companies can use electrification, low-carbon hydrogen or biomass. Since the 2026 round, carbon capture and storage or use (CCS/CCU; under certain conditions) and industrial steam projects are also eligible.
The support is awarded in competitive bidding rounds. In 2026, EUR 5 billion was available, and 21 bids were submitted. The bids came from chemicals, glass and ceramics, gypsum, lime, metals, pulp and paper, and cement. The funding requested was well above the auction volume.
How Does It Work?
1. You submit information on your planned project, including its scale, reference system and expected costs. Taking part is required to bid in the following round. Companies receive feedback before the bidding round opens and can adjust their project.
1. You submit your online application, which includes a project description covering your technology, sites, feasibility and milestones, supported by a quantitative query document with emissions, energy inputs, costs and a financial plan. The application also contains your bid, a base contract price in EUR per tonne of CO2 equivalent (CO2e) avoided, a signed model contract as your binding offer to the state, and an implementation guarantee.
1. Bids are ranked on funding cost efficiency: the lower the support needed per tonne of CO2e avoided, the better the score. Contracts are awarded in ranking order, at the price bid, until the available funding is used up. The award accepts your offer and concludes the contract.
1. The contract term starts when your plant begins operating. Payment follows after each year ends, based on the emissions you have avoided and the CO2 price.
Eligibility criteria
· You operate the plant in Germany, and your company is in an energy-intensive industry whose production processes fall under the EU ETS.
· The project involves a substantial investment in a fundamental change of the production process.
· The project is large enough that the contract could pay out at least EUR 15 million over its lifetime.
· Producing the same output in an efficient conventional plant (reference system) would emit at least 5,000 tonnes of CO2e per year on average.
· Emissions fall at least 50% below the reference system from the fourth full calendar year after operations start at the latest, and at least 85% below in the last 12 months of the contract.
· Projects whose only product is hydrogen, electricity, district heat or CO2 are not eligible.
WE CAN SUPPORT YOU THROUGHOUT THE PROCESS WITH:
Funding Fit Assessment
We check whether your project meets the Klimaschutzverträge's entry requirements and identify what to improve before you bid.
Full Proposal Development
We take full control of the preparatory procedure and the documents for the bidding round with minor involvement required from your side.
Partial Control Support Model
Another option is that we apply a partial control model, where we jointly develop specific sections (higher involvement required from your side).
Reviews & Quality Control
Lastly, we offer review of your drafted application and ensure it is error-free, coherent and meets the highest standards.