CFM TRACTION — SYNTHESIS REPORT

The report evaluates Carbon Contracts for Difference (CCfDs) and a Climate Contribution as tools for decarbonising the basic materials sector in Germany and Poland. CCfDs act as hedging instruments that lower the carbon price threshold required for clean technology investments and reduce the net present value of government funding. The Climate Contribution, a weight-based charge on materials, is estimated to generate EUR 17-21 billion in EU-wide revenues while remaining progressive and having a minimal impact (below 0.5%) on household consumption expenditures.

• Carbon Contracts for Difference (CCfDs) facilitate investment in clean technologies at lower expected carbon prices than minimum CO2 price schemes. In a German steel sector example, investment was profitable at an expected CO2 price of EUR 77 under a CCfD, compared to EUR 139 under a minimum CO2 price of EUR 30.
• The cost of implementing CCfDs is higher in Poland than in Germany due to higher capital costs and electricity prices. These factors lead to higher necessary expected CO2 prices for decarbonisation regardless of whether CCfDs are introduced.
• CCfDs can significantly reduce the net present value of government funding for industrial transformation. For a program decarbonising 30% of material production by 2035, the cost in Germany would drop from EUR 33 billion (without CO2 price) to EUR 8 billion (with medium carbon price), while in Poland it would drop from EUR 16 billion to EUR 8 billion.
• A EU-wide Climate Contribution—a weight-based charge on materials like steel, cement, aluminium, and plastic—is estimated to generate between EUR 17 billion and EUR 21 billion in total revenues at a carbon price of 30 EUR/t, with over EUR 11 billion coming from imports.
• The distributional impact of the Climate Contribution on household consumption expenditures in Germany and Poland is progressive and minimal, remaining below 0.5% of disposable income. High-income households spend a relatively larger share of their income on these materials than low-income households.

APA

Chiappinelli, O., Śniegocki, A., Richstein, J. C., Kröger, M., Lettow, F., Neuhoff, K., Stede, J., & Brzeziński, K. (n.d.). CFM TRACTION — SYNTHESIS REPORT. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-FULL.pdf

Chicago

Chiappinelli, Olga, Aleksander Śniegocki, Jörn C. Richstein, Mats Kröger, Frederik Lettow, Karsten Neuhoff, Jan Stede, and Krzysztof Brzeziński. CFM TRACTION — SYNTHESIS REPORT. Climate Strategies, n.d. https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-FULL.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 — SYNTHESIS REPORT}}, institution = {Climate Strategies}, url = {https://climatestrategies.org/wp-content/uploads/2021/03/CFM-Traction-Synthesis-FULL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }