Germany Launches €6B Industrial Decarbonization Program Including CCS Technology

Germany has launched a €6 billion ($7 billion) industrial decarbonization program that, for the first time, integrates carbon capture and storage (CCS) technology to reduce emissions across heavy industries including steel, cement, chemicals, and glass. The initiative, announced by Economy Minister Katherina Reiche, offers 15-year state-backed contracts starting in 2026, with companies competing through auctions that prioritize projects requesting the lowest subsidy per ton of CO₂ avoided. The program aims to support firms transitioning to cleaner production methods by subsidizing the cost gap and shielding them from energy and carbon price volatility, while requiring strict emissions reduction milestones. This approach sets a new benchmark for industrial decarbonization costs and is expected to influence European and African industrial sectors tied to trade with the EU. Industry groups have welcomed the inclusion of CCS, citing the need for pragmatic solutions to balance climate goals with economic challenges, although some critics caution about potential reliance on fossil-based technologies. Overall, the program signals Germany's commitment to achieving net-zero targets without compromising its industrial competitiveness.