The EU Commission has paved the way for German industrial conglomerates to break away from fossil fuels with the financial support of the federal government. In a move to accelerate the transformation towards a greener economy, Brussels approved state aid amounting to up to 2.2 billion euros. These funds are intended for companies that wish to convert their production processes and thus significantly reduce greenhouse gas emissions. The support aims to replace the use of fossil fuels in production with electrification or the switch to renewable hydrogen and fuels derived from it.
The subsidies are subject to strict conditions to ensure that the funding actually contributes to emission reductions and does not distort competition unduly. Projects promising a minimum reduction of emissions by 40 percent are considered for funding. The EU Commission emphasizes that the measures are in line with the competition law exemptions decided after the outbreak of the Ukraine war, which are meant to support, among other things, the transition to a climate-neutral economy.
Margrethe Vestager, Vice-President of the EU Commission, emphasizes the importance of approval for Germany's efforts to become less dependent on imported fossil fuels – an endeavor that has gained additional urgency due to the previous strong dependence on Russian energy imports.
The provided funds can flow to companies as direct grants but must not exceed 200 million Euros per recipient. The awarding of aid is limited until December 31, 2025, providing companies with a clear timeframe for the implementation of their conversion projects. With this support, Germany takes another important step towards a more sustainable and climate-friendly economy.