CFM TRACTION — BRIEFING NOTE

The document evaluates two policy instruments designed to transition the European basic materials sector to net zero by 2050. Carbon Contracts for Difference (CCfDs) are presented as a way to reduce investment risk and government costs by guaranteeing a fixed carbon price for low-carbon projects. The Climate Contribution is proposed as a weight-based charge on materials (like steel and cement) to ensure a consistent carbon price signal while maintaining carbon leakage protection. The analysis suggests that CCfDs can lower the required carbon price for investment and that the Climate Contribution could generate approximately EUR 17-21 billion in annual EU revenues with minimal, progressive impacts on household consumption in Germany and Poland.

• Carbon Contracts for Difference (CCfDs) facilitate industrial transformation at a lower cost than minimum CO2 price levels because they remove the risk of carbon price uncertainty, allowing investment in clean technology to occur at lower expected carbon prices.
• CCfDs can reduce the amount of government funding needed for decarbonisation and may even generate revenue if carbon prices rise. For a scenario decarbonising 30% of selected materials by 2035, the German government could gain an estimated EUR 17 billion in revenue under high carbon prices, while Polish net costs would decrease to EUR 0.35 billion.
• The Climate Contribution, a weight-based charge on materials such as steel, cement, aluminium, and plastic, is estimated to generate between EUR 17 and 21 billion in annual revenues across Europe at a CO2 price of 30 EUR/t.
• The impact of carbon pricing via the Climate Contribution on household consumption in Germany and Poland is projected to be less than 0.5% of expenditure and is progressive, meaning higher-income households experience a greater impact due to more material-intensive consumption patterns.

APA

CHIAPPINELLI, O., ŚNIEGOCKI, A., RICHSTEIN, J. C., KRÖGER, M., LETTOW, F., NEUHOFF, K., STEDE, J., & BRZEZIŃSKI, K. (n.d.). CFM TRACTION — BRIEFING NOTE. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-1.2a.pdf

Chicago

CHIAPPINELLI, OLGA, ALEKSANDER ŚNIEGOCKI, JÖRN C. RICHSTEIN, MATS KRÖGER, FREDERIK LETTOW, KARSTEN NEUHOFF, JAN STEDE, and KRZYSZTOF BRZEZIŃSKI. CFM TRACTION — BRIEFING NOTE. Climate Strategies, n.d. https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-1.2a.pdf.

Wikipedia

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BibTeX

@techreport{chiappinellindcfm, author = {CHIAPPINELLI, OLGA and ŚNIEGOCKI, ALEKSANDER and RICHSTEIN, JÖRN C. and KRÖGER, MATS and LETTOW, FREDERIK and NEUHOFF, KARSTEN and STEDE, JAN and BRZEZIŃSKI, KRZYSZTOF}, title = {{CFM TRACTION — BRIEFING NOTE}}, institution = {Climate Strategies}, url = {https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-1.2a.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }