Germany starts prep phase for 2027 CCfD tender

Market: Emissions
19/10/26

Germany today launched the preliminary procedure for its third carbon for contracts for difference (CCfD) bidding round, scheduled to begin in May 2027, with a focus on hydrogen, carbon capture and utilisation/storage (CCU/S), and process heat.

The preliminary phase will run until the end of the year. The successful bidders will be awarded contracts by the end of 2027.

Germany's draft budget for 2027, which is currently undergoing parliamentary scrutiny, sets aside up to €8.7bn for CCfDs, of which most will flow into the 2027 CCfD funding round, the economy and energy ministry said. This will make it the biggest CCfD funding round so far.

The bidding round is also subject to approval under state-aid rules from the European Commission.

Separate sector-specific budgets for each of the technologies — hydrogen, CCU/S, process heat — will for the first time be earmarked in the 2027 round, with the aim to better take account of their specific abatement costs and requirements. This will ensure that similar projects compete with one another in the auction, the ministry said.

The level of funding will be determined on the basis of participation in the preliminary procedure.

For hydrogen, at least €1.5bn is reserved. The aim is to reduce the gap between production costs and the willingness of industrial customers to pay during the development phase of the hydrogen market, and to support "first movers".

Germany's CCfD funding rounds are directed primarily at energy-intensive companies subject to the EU emissions trading system (EU ETS). The funding is designed to incentivise investment in various decarbonisation technologies.

The ministry signed a total of 15 CCfDs in the first round for subsidies totalling €2.8bn in 2025. The oversubscribed second round concluded last month and had a budget of €5bn.

The CCfDs offset the cost difference, compared with conventional production processes, and fluctuating energy and carbon allowance prices, over a 15-year period.

CCfDs are "complementary" to the general conditions under which the industry operates, the ministry said, taking into account not just the EU ETS but also subsidies such as the power price compensation, which will be deducted from the support to prevent double-funding.

The ministry also underlined the "high degree of insecurity" that characterises the current economic situation, and the "considerable pressure to act" emanating from the EU ETS due to the diminishing allowance volumes and the volatile carbon price.

The CCfDs cover both capital and operating costs. Payments are made on the basis of obligated companies' ETS reporting on annual CO2 emissions.

The ministry separately last week announced a new round of tenders for projects to decarbonise industrial processes under its BIK programme, which targets smaller companies than those eligible for CCfDs and subsidises capital costs only.

By Chloe Jardine

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19/10/26

Australia's NSW moves to raise Mt Pleasant's coal limit

Sydney, 19 October (Argus) — The New South Wales (NSW) state Labor government plans to introduce legislation to allow Australian producer Mach Energy to increase production at its 12.5mn t/yr Mount Pleasant thermal coal mine to 16.5mn t/yr until 2032, it announced today. This comes after the nation's highest court in early October upheld a ruling that blocked the mine's expansion. Australia's High Court blocked Mach Energy's proposal to extend Mount Pleasant's operations from 2026 to 2048 and raise its annual run-of-mine (ROM) production limit to 21mn t/yr. The 7 October ruling found that state regulators had breached NSW's planning rules by failing to consider imposing conditions to minimise downstream greenhouse gas (GHG) emissions to the required extent. The decision sent the project back to state authorities for reassessment. The legislation proposed on 19 October will address the "unique legal uncertainty" arising from the High Court judgement, and is expected to be introduced in the next sitting fortnight, the government said. It includes a legal obligation for the mine to maintain current staffing levels of 826 permanent workers and contractors until 2032, protecting an estimated 400 jobs. Without legislative intervention, Mach Energy said it would need to scale back production at Mount Pleasant, possibly putting hundreds of jobs at risk, the government said. The proposed legislation will also place additional conditions on Mount Pleasant to minimise scope 3 emissions, in line with requirements placed on Glencore and Yancoal's recently-approved Hunter Valley Operations (HVO) mine. The HVO approval included conditions aimed at ensuring coal would only be sent to jurisdictions with policies to reduce GHG emissions in line with international climate agreements. In August, Mount Pleasant was granted a separate approval which raised its approved extraction rate to 12.5mn t/yr from 10.5mn t/yr and extended its operations from 2026 to 2032. The proposed legislation addresses Mount Pleasant's unique situation and will not be extended to any other mining projects, the state government said. It expects Mach Energy will continue to work through court processes to get approval to extend the mine's operations to 2048. By Emma Partis Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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16/10/26

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16/10/26

Germany's Merz says France deal ends EU ICE phase-out

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16/10/26

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16/10/26

Joint presidencies a first for Cop 31

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16/10/26

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16/10/26

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15/10/26

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