Germany aims to be carbon neutral by 2045, as part of this the country is working on ‘climate contracts’. Climate Contracts for Difference (CCfD) will finance carbon neutral investments. This is specifically designed as a way of financing the overhaul needed in heavy industries like steel, cement, paper, glass and chemicals that are particularly tough to decarbonise.
It’s expected these investments will save 350 million tonnes of CO2 by 2045. This would cut a third of industry emissions needed to meet their target. The Netherlands have introduced something similar. According to Bloomberg, they’ve almost entirely phased out coal and oil and dropped their reliance on gas from 58% to 39%.
Green Economy
What’s important to note about these climate contracts is that they aren’t just about reducing emissions but investing in the technologies needed for the carbon transition. Meaning, they’ll be building new green infrastructure and putting methods into place for these industries to operate sustainably long into the future.
This is also part of Germany positioning itself a world leader in the energy transition. It’s expected that this will play a role in developing the country’s green economy, benefitting not just those directly involved but everyone. The point is, a green economy could bring about a better future for us all.
Climate Contracts For All
These measures aren’t just for huge companies but any business as long as they emit 10,000 tonnes of CO2 per year. “It’s not just about the big industrial heavyweights in Germany, but also about the broadest possible participation of small and medium-sized enterprises” said climate action and economy minister Robert Habeck.
He added…
“Mechanical engineering will benefit. New technologies will be developed. We will see the ramp-up of intelligent control of companies and energy systems. That in turn will lead to the price of decarbonisation coming down”.
The EU Commision is still yet to approve the scheme to ensure it complies with subsidy rules, but according to Habeck it’s likely they will get the go ahead. Do you think this scheme will make an impact? Let us know in the comments!
