The German Federal Ministry for Economic Affairs and Climate Action has initiated the preliminary procedure for the 2026 tendering process concerning so-called “climate protection contracts” with energy-intensive industries. The ministry announced the move on Monday, outlining a framework designed to incentivize investments in low-carbon production methods across sectors such as chemicals, cement and glass.
These carbon differential contracts aim to mitigate price risks associated with transitioning to more sustainable processes. Furthermore, they are intended to accelerate the market entry and adoption of innovative technologies.
The preliminary phase now underway involves consultation with industry stakeholders regarding the proposed funding regulations. Participation in this preliminary procedure, concluding on December 1, 2025, is a mandatory prerequisite for companies intending to submit bids in the subsequent 2026 tendering process, which is expected to commence in mid-2025.
A significant development within this preliminary process is the inclusion of new projects eligible for the auction. For the first time, technologies related to carbon capture and storage (CCS) and carbon capture and utilization (CCU) will be eligible for support. Companies will ultimately be compensated based on the actual carbon emissions reductions achieved.
