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Project Finance for Energy Projects

In this episode of Clean Energy Talks video blog with Shubhda Kaushik, Founder and CEO of Alternative Energy Company, about how Project Finance is driving the Energy Transition.

We explore:

  • Shubhda’s experience in project finance, strategy consulting, and project development across renewable and clean energy sectors;
  • The inspiration behind founding Alternative Energy Company and the market gaps it aims to close;
  • What project finance really means and how it supports large-scale energy infrastructure;
  • The key factors that make an energy project bankable — from risk assessment to financing structures;
  • How project finance for hydrogen, e-fuels, and ammonia differs from traditional renewables like wind and solar power.

Whether you’re interested in hydrogen project development, renewable energy investment, or financing sustainable infrastructure, this conversation offers practical insights into how innovative financial models are enabling the global clean energy transition.

➡️ Reach out here on LinkedIn or contact me for more details on the video topic.

Federal Court of Auditors report

Federal Court of Auditors Report, Germany, Hydrogen Strategy

📢 Germany Must Revise Its Hydrogen Strategy under the Federal Court of Auditors (Bundesrechnungshof) Report

✅ Main Findings:

📌 The German government considers hydrogen a key pillar of the energy transition, aiming for Germany to become climate-neutral by 2045.

📌 The federal government has already allocated more than €7 billion in funding, mainly as subsidies, for 2024 and 2025. Despite this significant financial commitment, the objectives of the national hydrogen strategy have not yet been achieved.

📌 The Federal Court of Auditors found that both supply and demand for green hydrogen in Germany have not developed as planned. A sufficient hydrogen supply is intended to come from domestic production and at least half from imports. However, the German government will not meet its domestic production targets for green hydrogen by 2030, nor will anticipated import volumes cover the expected demand.

📌 Green hydrogen remains significantly more expensive than fossil fuels such as natural gas. Since competitive production or import prices are not foreseeable in the near future, long-term government subsidies are likely to remain necessary. To bridge the price gap between hydrogen and natural gas, import costs alone could place a burden of €3 to €25 billion on the federal budget by 2030.

☑️ Reality Check

The Federal Court of Auditors recommends that the Federal Government:

  • review the hydrogen strategy and its current implementation, reassessing whether and when green hydrogen can be made available in sufficient quantities, at competitive prices;
  • evaluate, as part of this review, the actual contribution the hydrogen economy can make to the energy transition as a whole;
  • revise the hydrogen strategy to ensure that supply, demand, and infrastructure are developed as synchronously and cost-effectively as possible; and
  • develop a “Plan B”, if necessary, to achieve climate neutrality by 2045, even without a permanently subsidised hydrogen economy.

➡️ Source: Bundesrechnungshof: Umsetzung der Wasserstoffstrategie stockt: Erhebliche Risiken für Energiewende, Industriestandort und Bundesfinanzen

ReFuelEU Aviation Annual Technical Report

The European Union Aviation Safety Agency (EASA) has published the first ReFuelEU Aviation Annual Technical Report 2025

✈️ The European Union Aviation Safety Agency (EASA) has published the first ReFuelEU Aviation Annual Technical Report.

☑️ Synthetic Aviation Fuels (e-SAF) Market Development as of June 2025:

  • The global pipeline for e-SAF facilities comprises 94 announced demonstration or commercial projects, with a combined capacity of 7.2 million tonnes per year.
  • The European Economic Area (EEA) is the frontrunner, accounting for 59% of projects and 42% of planned capacity.
  • Due to the absence of binding e-SAF mandates outside the EU and UK, many projects are oriented toward exporting to the European market.
  • Planned non-EEA capacity faces both slow project progress and the challenge of meeting the EU’s stringent sustainability criteria before these fuels can be imported into the EU.

✅ Key Takeaways:

📌 EU SAF production capacities are projected to be sufficient to meet the minimum SAF shares defined under the ReFuelEU Aviation Regulation for 2030 (excluding e-SAF).

📌 A continuous scale-up of production will be necessary to establish a well-functioning market and achieve the 2035 ReFuelEU targets, which rise to 20% that year. The scale-up of e-SAF production in the EU is still lagging.

📌 As of today, none of the se-SAF facilities in the EU have reached Final Investment Decision (FID), putting at risk the 2030 sub-target for e-SAF. To meet that target, given development lead times, several facilities must reach FID by 2026 at the latest.

📌 Of the feedstock used for SAF supplied in the EU, 69% originated from non-EU countries, with China contributing 38%, Malaysia 12%, and Finland 10% as the largest European contributor.

📌 In 2024, 25 aviation fuel suppliers (out of 83) reported a total supply of 193 kt of SAF. Fewer than ten suppliers accounted for 80% of this amount, indicating a high level of market concentration. This suggests that the EU SAF market remains nascent and dominated by a few mature or well-capitalized players.

📌 SAF was delivered to 33 Union airports across 12 EU Member States, with 5 Member States – France, the Netherlands, Spain, Sweden, and Germany – accounting for 99% of the total amount supplied.

📌 According to Eurostat, the EU imported 80 kt of SAF in 2024, representing over 40% of the total EU SAF supply that year, highlighting the continued importance of imports despite the gradual growth of domestic production.

➡️ Source: European Union Aviation Safety Agency. ReFuelEU Aviation Annual Technical Report 2025

Commission Work Programme for 2026

European Commission Work Programme for 2026

📢 The European Commission has just published its Work Programme for 2026, outlining key legislative and policy initiatives.

The main highlights for the Energy and Climate sectors:

🔹 Electrification Action Plan, including heating and cooling (non-legislative, Q1 2026)

🔹 Strengthening Energy Security (legislative, Article 194 TFEU, Q1 2026)

🔹 Update of the Governance of the Energy Union and Climate Action, including the phase-out of fossil fuel subsidies (legislative, Articles 192 & 194 TFEU, Q4 2026)

🔹Energy Union Package for the Decade Ahead

  • Development of CO₂ transportation infrastructure and markets (Q3 2026)
  • Establishment of the energy efficiency framework (Q3 2026)
  • Establishment of the renewable energy framework (Q3 2026)

🔹Omnibus to simplify energy product legislation (Q2 2026)

🔹 Climate Package for the Decade Ahead

  • Revision of national targets and flexibilities in the EU climate policy framework (Q4 2026)
  • Update of the EU Emissions Trading System (ETS) for maritime, aviation, and stationary installations, including the Market Stability Reserve (Q3 2026)

🔹European Integrated Framework for Climate Resilience (non-legislative & legislative, Article 192 TFEU, Q4 2026)

📄 Factsheet: “Explaining the Commission work programme 2026

➡️ Source: European Commission Work Programme for 2026

How to Navigate the Transposition of RED III

How to Navigate the Transposition of RED III in EU Member States?

When trying to understand how RED III is being transposed across the EU, you can easily find a multiple of publications often with overlapping or even contradictory information.

To analyse this topic effectively, I recommend the following key resources:

1️⃣ Announcements of the European Commission

  • On 24 July 2025, the European Commission opened infringement procedures by sending letters of formal notice to 26 Member States for failing to communicate the full transposition of RED III into national law.
  • Member States were required to notify the transposition of the RED III by 21 May 2025.
  • Only Denmark has notified full transposition by the legal deadline.

👉 This means that as of July 2025, only Denmark had fully transposed RED III.

➡️ Source: Commission takes action to ensure complete and timely transposition of EU directives – key decisions on energy

2️⃣ Information on National Transposition in EUR-Lex

  • While EUR-Lex does not confirm full transposition, it provides a list of national measures adopted for implementing RED III, presented separately for each EU country.

➡️ Source: National transposition measures communicated by the Member States

3️⃣ Overviews by Associations, Research Centres, and Institutes

  • Such overviews can be very insightful but usually do not provide full information on RED III transposition. They often cover only some Member States or some parts of the RED III transposition such as hydrogen and others.

👉 Some useful publications from associations include:

IEA Report: Delivering Sustainable Fuels

International Energy Agency. Report. Delivering Sustainable Fuels. Pathways to 2035

Sustainable fuels mean liquid biofuels, biogases, low-emissions hydrogen and hydrogen-based fuels – offer multiple benefits for the energy sector.

With well-designed policies, sustainable fuels can achieve major lifecycle emissions reductions compared with conventional fuels.

✅ IEA Policy Recommendations:

📌 Establish roadmaps, targets and support policies that are tailored to regional contexts and aligned with broader energy goals, while keeping a technology-open approach.

📌 Increase demand predictability to increase market confidence and attract investment.

📌 Cooperate in developing transparent and robust carbon accounting methodologies to enhance comparability and future interoperability, and enable performance-based policies and incentives.

📌 Support innovation to narrow cost gaps to accelerate economies of scale and cost reductions for emerging technologies.

📌 Develop integrated supply chains and address infrastructure needs to unlock long-term economic development opportunities.

📌 Make financing more accessible, especially in emerging and developing economies to de-risk investment and unlock the vast potential for sustainable fuels in these regions.

➡️ Source: International Energy Agency. Report. Delivering Sustainable Fuels. Pathways to 2035

Tax incentives to promote clean technologies

Council of the European Union approved conclusions on the use of tax incentives to promote clean technologies

On 10 October, the Council of the European Union approved conclusions on the use of tax incentives to promote clean technologies and industry, supporting the implementation of the Clean Industrial Deal (CID).

➡️ The conclusions is available via this link.

The conclusions respond to the European Commission’s Recommendation of 2 July 2025, which outlined how Member States can use fiscal tools such as targeted tax credits and accelerated depreciation to boost investment in clean technologies and industrial decarbonisation.

✅ Key elements of the Council conclusions:

📌 Welcome the the Commission recommendation on tax incentives to support the Clean Industrial Deal and in light of the Clean Industrial Deal State Aid Framework.

📌 Emphasise that tax incentives should remain simple, effective, and adapted to diverse national tax systems.

📌 Highlight the importance of flexibility and Member State discretion in designing and applying incentives, given budgetary realities.

📌 Encourage evaluation and exchange of best practices across Member States to ensure effective implementation.

☑️ Why this matters:

Tax incentives can become a cornerstone of Europe’s industrial transformation, helping to:

  • Stimulate private investment in decarbonisation and clean manufacturing;
  • Improve cash flow for businesses investing in energy efficiency and renewables;
  • Strengthen the EU’s industrial base while supporting the 2050 climate neutrality goal.

By aligning tax policy with the Clean Industrial Deal and State aid rules, the EU is laying the groundwork for a coherent fiscal framework that empowers industries to lead the clean transition cost-effectively and competitively.

Preparatory process for the 2026 bidding round of Carbon Contracts for Difference

Preparatory process for the 2026 bidding round of Carbon Contracts for Difference (Klimaschutzverträge)

📢 Germany launches preparatory process for the 2026 bidding round of Carbon Contracts for Difference (Klimaschutzverträge)

On 6 October, the German Federal Ministry for Economic Affairs and Climate Action (BMWK) initiated the preparatory phase for the 2026 bidding round of CO2-Differenzverträge (Carbon Contracts for Difference, CCfDs). Carbon Contracts for Difference are one of the key funding instruments supporting the decarbonisation of energy-intensive industries.

✅ Main purposes of the CCfDs:

📌 CCfDs protect companies investing in low-carbon production processes against price risks. Fluctuations in CO2 and energy prices, as well as cost differences compared to conventional production processes, are compensated over a period of 15 years.

📌 The contracts also aim to accelerate the market ramp-up of new technologies (e.g. industrial heat pumps, hydrogen applications, CO2 capture and storage, and energy storage technologies) and to help establish innovative production processes on the market.

☑️ Eligibility requirements:

📌 Companies are free to decide how to convert their production processes in line with the energy sources used (electricity, low-carbon hydrogen, biomass).

📌 The only requirements are milestones for CO2 savings: 60% from the third year and 90% in the final year of the contract term.

📌 Companies are remunerated based on the actual CO2 savings achieved.

📌 The CCfDs are also open to small and medium-sized enterprises with smaller production facilities.

📅 Schedule:

  • Participation in the preparatory phase until 1 December 2025 is required for companies wishing to submit bids in 2026.

⚠️ The bidding process remains subject to budgetary approval and state aid clearance by the European Commission.

📘 More information and documentation on the preparatory process are available at https://www.klimaschutzvertraege.info/

➡️ Source: BMWE startet vorbereitendes Verfahren für das Gebotsverfahren 2026 der CO2-Differenzverträge (Klimaschutzverträge)

World Hydrogen Week

How will regulation, standardisation, and certification work together?

This question we discussed 09.10.2025 during the World Hydrogen Week in Copenhagen, organised by World Hydrogen Leaders.

Under the chair of Kim Talus and the moderation of Ulrike Hinz, together with Régis Prévost and Mohit Agrawal, we explored how standards and regulation interact in the production of hydrogen and hydrogen derivatives.

This topic is also part of my ongoing research at the University of Eastern Finland. Building on my previous studies, I shared several key points during the discussion:

📌 Different purposes: Regulations aim primarily at achieving greenhouse gas (GHG) emission reduction targets, while standards focus on ensuring safety and technical compatibility.

📌 Different approaches to blending: Regulations allow flexibility through book & claim or mass balance systems, whereas standards typically apply only to physical blending.

📌 Different consequences for non-compliance: Under regulatory frameworks, penalties or GHG payments may apply, while under technical standards, non-compliance simply means the fuel cannot be used.

It was a truly insightful exchange on how these frameworks can and must align to support the development of a global hydrogen economy.

Public consultation on CO2 markets and infrastructure in the EU

Public consultation on CO2 markets and infrastructure

On 6 October, the European Commission launched an open public consultation on upcoming legislation and impact assessment for CO2 markets and infrastructure.

To meet the EU’s climate neutrality target by 2050, industrial carbon management (ICM) will play a crucial role alongside renewable energy and energy efficiency. Building on the Industrial Carbon Management Strategy, adopted in February 2024, the European Commission has now launched a public consultation on an upcoming legislative initiative for CO2 markets and infrastructure.

🗓️ The consultation is open until 9 January 2026.

➡️ Participate before 9 January 2026: Legislative initiative on CO2 transportation infrastructure and markets

ICM is essential to address hard-to-abate industrial emissions and to maintain a competitive, decarbonised industrial base in the EU. However, the CO2 value chain is still in its early stages. Limited infrastructure, regulatory fragmentation, and investment risks are slowing progress.

The upcoming legislative proposal aims to create a well-functioning, competitive, and integrated EU CO2 market, ensuring that captured CO2 can be safely and efficiently transported, stored, or utilised across borders.

✅ Key topics covered in the consultation include:

📌 Regulatory framework design, ensuring investor confidence, flexibility, and long-term predictability.

📌 Cross-border CO2 transport, removing barriers linked to international treaties and aligning with neighboring countries.

📌 Infrastructure planning and permitting, improving coherence and speeding up authorisations under TEN-E, NZIA, and the CCS Directive.

📌 Market access and third-party rules – defining access rights, financing models, and governance structures for CO2 networks.

📌 CO2 quality standards, supporting the development of common European standards to enable interoperability and avoid market fragmentation.

This initiative is expected to become a cornerstone of the EU’s Clean Industrial Deal, providing the regulatory and financial foundations for scaling up industrial carbon management technologies.