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Opportunities for decarbonising SMEs

Supporting SMEs in industry with decarbonisation is a main focus of the new Federal Funding for Industry and Climate Action (BIK). Companies can still apply for funding and submit their projects until 30 November 2024.

Germany's SMEs, also known as the 'Mittelstand', are the country's strongest driver of innovation and technology and are highly renowned across the world. Over 99 per cent of all companies in Germany belong to this category and can receive extensive support with decarbonisation as we strive towards a climate-neutral economy.

The new funding programme is the successor of the ‘Decarbonisation in Industry’ (DDI) programme. The funding is to particularly support the implementation of decarbonisation measures in innovative small and medium-sized transformation projects, is available to all sectors, and is technology-neutral. The funding enables, for example, a switch to electricity, which can make good sense for areas where fossil fuels are still used today for processes which require high temperatures.

^{Putting SMEs in the spotlight}

The funding programme is to run through 2030. Current plans indicate that around €3.3 billion from Germany’s Climate and Transformation Fund (KTF) will be available across the entire funding period. The first funding call has an allocation of just over €1 billion.

Small and medium-sized companies in particular are encouraged to submit investment and technological development projects for funding. Industrial projects focusing on decarbonisation, e.g. via electrification or switching to renewable hydrogen, or projects around capturing, storing and using CO₂ (CCU and CCS - in German only) are encouraged to apply.

^{BIK and Carbon Contracts for Difference are now aligned}

Important news: the Federal Funding for Industry and Climate Action (BIK) programme and Carbon Contracts for Difference (in German only) are now aligned with one another and cannot be combined. BIK funding opportunities start at a project volume of €500,000 for small and medium-sized enterprises (SMEs), and at €1 million for larger companies. Projects with a volume of €15 million or higher are to be 30 per cent co-financed by the Länder. All information and contacts for the project management agencies can be found on the BIK website. Read more about the funding modules here.

The Federal Ministry for Economic Affairs and Climate Action began preparations for the second round of the Carbon Contracts for Difference funding programme (in German only) at the end of July 2024. This is the first procedural step for the second round of bids for Carbon Contracts for Difference, which the Ministry intends to conduct at the end of the year. The Carbon Contracts for Difference offset additional costs in instances where climate-friendly manufacturing processes cannot yet compete with conventional processes.