Commission approves $2.4 billion German state aid scheme to support the decarbonization of industrial processes

In Belgium, the European Commission has approved a $2.4 billion German scheme to support investments in the decarbonisation of industrial production processes to foster the transition to a net-zero economy.

Under this measure, the aid will take the form of direct grants. The measure will be open to companies relying on the use of fossil fuels as energy source or feedstock for their production processes in the industrial sector in Germany. Eligible projects must lead to a reduction of greenhouse gas emissions from production processes of at least 40%, compared to today. To be eligible, companies need to either electrify their production processes, or switch from the use of fossil fuels to renewable hydrogen or renewable hydrogen-derived fuels.

With grants set to be awarded no later than December 31, 2025, the European Commission said that the German funding is “necessary, appropriate and proportionate” to accelerate decarbonization, in line with the bloc’s REPowerEU plan.

Margrethe Vestager, Executive Vice-President of the European Commission, said the scheme would “help Germany to reduce its dependence on imported fossil fuels faster.”

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