Germany launches state support for energy-intensive industry

Germany is launching a programme that will provide tens of billions of euros to companies facing high energy costs. The aim is to support industrial sectors struggling to finance the transition to carbon-neutral production processes.

The programme will be worth approximately 50 billion euros over the next 15 years, according to Reuters. Germany is responding to a situation in which European industry is under pressure from high costs for raw materials, energy and labour. Funding for the designated sectors is to come from the so-called Climate and Transformation Fund, financed by revenue from emissions allowance trading and other sources. The financing details are not yet fully known, however—the German Ministry for Economic Affairs is awaiting the outcome of ongoing talks on the German budget.

Some of the fund’s basic parameters are already known. Its aim is to counterbalance programmes in other regions, particularly the United States, which could lure businesses away from the continent with generous subsidies and more favourable legislation. In Germany, support will be granted through so-called climate protection contracts, with steel, cement, paper and chemical manufacturers set to be the main beneficiaries. The goal is to decarbonise their production.