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

📢 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)

Posted By : admin 6 Oct, 2025

Public consultation on CO2 markets and infrastructure in the EU

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.

Posted By : admin 3 Oct, 2025

Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways

Figure: Global distribution of CCU-relevant policy frameworks

Source: Wood Mackenzie Lens Carbon

The World Economic Forum has just published its white paper: “Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways”.

✅ The report highlights key challenges for Carbon Capture and Utilization (CCU) policy framework:

📌 The global CCU policy landscape remains fragmented, inconsistent, and often conflicting.

📌 Sequestration is prioritized over reuse, while the lack of an effective global carbon price undermines wider deployment of capture technologies.

📌 These gaps create uncertainty for innovators and reduce policy credibility for investors.

📌 Current frameworks are regionally specific, leading to concentrated initiatives in certain jurisdictions and heightening risks from policy instability.

📌 Scaling CCU requires a more coordinated, credible, and globally consistent policy environment to unlock its full potential for industrial decarbonization.

➡️ Source: World Economic Forum. Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways. White Paper. September 2025

Posted By : admin 13 Sep, 2025

Methodology for assessing greenhouse gas emissions savings from low-carbon fuels

This report, prepared at the request of the European Parliament’s Committee on Industry, Research
and Energy (ITRE) reviews the draft Delegated Act (DA) on low-carbon fuels and addresses following questions:

🔹 Which production pathways are included?

The DA applies a technology-neutral, life-cycle approach.
Fuels must achieve at least a 70% reduction vs. the fossil comparator (94 gCO₂eq/MJ).
Both fossil pathways with CCS and electrolytic production routes for hydrogen production are eligible.
Nuclear-based electricity is also recognised.
Hydrogen leakage will be included once scientific consensus exists on its warming impact.

🔹 Does the DA enable the hydrogen economy?

The Delegated Act (DA) is a regulatory enabler, not a market driver.
The DA creates regulatory certainty via harmonised EU-wide accounting and certification, reducing investment risk and avoiding fragmented national rules.
The DA is not a demand-side driver, no targets or incentives are included.

🔹 Does the DA address fossil fuel emissions?

The DA incorporates methane CH₄ and CO₂ defaults but they are not strongly conservative.
LNG-specific values are missing, risking underestimation. Its effectiveness will hinge on strict enforcement and robust methane reporting.

🔹 Price & cost expectations

Blue H₂: 3.5–6.5 €/kg (costs depend on gas prices, CCS costs, and volatility).
Electrolytic H₂: 6–8 €/kg today; costs could fall <3 €/kg with cheaper electrolysers + low-carbon electricity.

➡️ Overall: The DA is an important regulatory enabler. It sets the rules for certification and trade but does not itself stimulate hydrogen demand.

➡️ Source: Report: Methodology for assessing greenhouse gas emissions savings from low-carbon fuels

Posted By : admin 16 Aug, 2025

Carbon Dioxide Storage Act

On 6 August, the German Federal Cabinet approved the Draft Law to amend the Carbon Dioxide Storage Act. The law is intended to enable the use of CCS (carbon capture and storage) and CCU (carbon capture and utilization), as well as the transport and storage of CO2.

📄 Draft Law: Entwurf eines Gesetzes zur Änderung des Kohlendioxid-Speicherungsgesetzes

The Draft Law was developed over the past few months by the Federal Ministry for Economic Affairs and Energy and coordinated with the states, associations, and other ministries.

✅ Key Takeaways:

📌 With this draft law, Germany joins the ranks of countries that aim to use CCS technologies as part of achieving their climate targets.

📌 The law establishes a legal framework for the construction of CO2 pipelines and storage facilities, while ensuring compliance with safety and environmental regulations.

📌 The main provisions include:

Application of the law to the licensing and operation of CO2 pipelines, the licensing and operation of permanent underground storage facilities, as well as the investigation, monitoring, decommissioning, and aftercare of all facilities and equipment related to CO2 storage and transport.
Authorization of CCS facilities for commercial use on an industrial scale on the continental shelf and in the exclusive economic zone.
Exclusion of marine protected areas and coastal waters from CO2 storage.
An opt-in option for federal states to allow onshore storage on the German mainland.
Recognition of the overriding public interest for the construction, operation, and significant modification of CO2 pipelines and storage facilities.
Exclusion of emissions from coal-fired power generation from access to the CO2 pipeline network.
Introduction of regulations to accelerate procedures and approvals for the development of CO2 infrastructure.

➡️ Source: Bundesregierung ebnet den Weg für CO₂-Speicherung und -Nutzung (CCS und CCU)

Posted By : admin 20 Apr, 2025

Public Consultations. EU ETS for maritime, aviation and stationary installations

The European Commission has commenced the public consultation regarding EU ETS for maritime, aviation and stationary installations, and market stability reserve.

📄 Type of Act – Proposal for a Directive

📅 Feedback period – 14 April 2025 – 08 July 2025

✅ The following aspects are subject to review:

📌 Aviation emissions:

the EU has temporarily limited the scope to intra-EEA flights that encourages the development of an effective global carbon pricing scheme by the ICAO.
by mid-2026, the Commission should make a report on CORSIA.
the ETS Directive suggests assessment criteria and indications on geographical scope.

📌 Maritime emissions:

the European Commission will have to assess the GHG pricing mechanism and market-based measures that will possibly be adopted at the IMO in 2025 and review the ETS accordingly to avoid a significant double burden on maritime operators;
the European Commission will have to consider extending the EU ETS to cover emissions from smaller ships (i.e. ships below 5 000 gross tonnage but not below 400 gross tonnage);
the European Commission should monitor implementation of the recent extension of the EU ETS to maritime transport, and consider legislative improvements to ensure the effective implementation of the extension;
the European Commission should simplify and improve the system where possible.

📌 Municipal waste incineration:

This looks at the feasibility of including such installations in the EU ETS from 2028.

📌 Non-permanent carbon capture and use:

the impact assessment will look at whether all GHG emissions covered by the EU ETS are effectively accounted for and whether double counting is being avoided, in particular regarding GHG emissions considered to have been captured and utilised in a product non-permanently.

📌 Carbon removals:

the possible inclusion of domestic permanent carbon removals in the EU ETS.
how the EU ETS could account for negative emissions resulting from GHGs that are removed from the atmosphere and safely and permanently stored underground or permanently stored in products;
how those negative emissions, if appropriate, could be covered by ‘emissions trading’ or other policies, setting a clear scope and strict criteria;
putting in place of safeguards to ensure that such removals do not offset necessary emissions reductions.

☑️ WHAT NEXT?

📌 At the end of this consultation process, a factual summary report and a synopsis report will be drafted.

📌 The Commission Adoption – Q3 2026.

➡️ Source: EU emissions trading system for maritime, aviation and stationary installations, and market stability reserve – review

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