Carbon Contracts for Difference (CCfDs) can ensure a strong and stable carbon price signal that reduces the financing costs and risks of zero-emission investments, thereby supporting technologies to overcome the valley of death, leading to their commercialisation and large-scale use. Making investments in new processes financially attractive can eliminate the late-mover advantage of only investing in mature technologies. Like public support for offshore wind power over the last two decades, CCfDs can push the learning curve and help develop the know-how for an export-oriented European supply industry.
Henrike Hahn, MEP has commissioned a study conducted by Climate Strategies to look at the advantages and challenges of CCfDs at the national and European level, highlight the possible pathways towards a robust EU framework for CCfDs and examine how CCfDs can be designed to help build a resilient zero-emission European industry and thereby help accelerate European climate decisions.
The study is available here.