Germany Launches €6bn CfD Bidding for Green Industry Transition
The German government has initiated the first phase of a bidding process for carbon dioxide contracts for difference (CfD), aiming to support heavy industries in their transition to cleaner production methods. This move comes as ArcelorMittal has shelved plans for hydrogen-based green steel due to market conditions and high costs.
The CfD bidding process, set to conclude in December 2025, has not yet attracted publicly known German companies. However, the government has earmarked €6bn to fund projects such as hydrogen-based production systems, electric furnaces, and renewable energy sources. Successful applicants will be selected through a competitive auction in 2026, with the winners to be announced on 1 December.
Companies will be required to significantly reduce their emissions: 60% within three years and 90% by the end of the 15-year contract. Despite ArcelorMittal's setback, BASF has already begun producing green ammonia at its Ludwigshafen plant, while Heidelberg Materials is pursuing CCUS projects in France and planning a large-scale CCUS facility for cement production.
The German government's CfD initiative offers substantial funding and long-term support to heavy industries willing to embrace greener technologies. As the bidding process progresses, companies are encouraged to submit their proposals by December 2025, with the first contracts expected to be signed in mid-2026.
