EU approves €5 billion German state aid for industrial decarbonization
The European Commission on Wednesday approved a €5 billion German state aid scheme to help energy-intensive industries shift to climate-friendly production. The funding, to be allocated via competitive tenders based on cost efficiency, targets sectors such as chemicals, metals, paper, glass and cement. Projects must cut emissions by at least 50% within four years and 85% by the end of the 15-year contract period.
The European Commission on Wednesday approved a €5 billion German state aid scheme to help energy-intensive industries shift to climate-friendly production, clearing the measure under EU state aid rules.
The funding will be allocated via a competitive tender process based on cost efficiency per tonne of CO₂ avoided, the Commission said in a statement. Eligible sectors include the paper, chemicals, metals, glass and cement industries. Projects must reduce emissions by at least 50% within four years and by at least 85% by the end of the 15-year contract period.
Allowed decarbonization methods include electrification of industrial processes, hydrogen use, carbon capture and storage, biomethane and waste heat. The Commission said the scheme is necessary, suitable and proportionate for advancing industrial decarbonization in Germany, and that the impact on competition and trade within the EU is limited.
The approval aligns with Germany's energy and climate goals as well as EU targets for sustainable prosperity and competitiveness, the Commission added.