Germany's €5bn Contracts for Difference (CfD) scheme, aimed at supporting industrial sectors to decarbonise with hydrogen, carbon capture, and electrification, has received approval from the European Commission. The Climate Protection Contracts, a 15-year carbon CFD, will assist in fuel switching and electrification in sectors like cement, chemical, and steel production. Projects selected under this scheme will be subject to the EU Emissions Trading Scheme and are required to cut emissions by at least 60% in the first three years and 90% by the end of the support period. The competitive bidding process will prioritize projects with the lowest aid amount requested per tonne of CO2 avoided, ensuring cost-effectiveness. Beneficiaries of the scheme will only be covered for the additional costs associated with new production processes. If cleaner technologies become cheaper, recipients will have to repay the difference to the German Government. European Commissioner Teresa Ribera praised the scheme for supporting projects that will significantly reduce greenhouse gas emissions in industrial processes. The initiative, part of the Climate Protection Contracts, is the second round following the signing of 15 contracts worth €2.8bn ($3bn) in October. Despite potential implementation challenges due to the change in the German government, the scheme remains a crucial step in Germany's efforts to combat climate change and reduce emissions in its industrial sectors.