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Carbon Contracts for Difference (CCfD): Status quo

Carbon Contracts for Difference (CCfD): Status quo

Paperback

Business General

ISBN10: 6208578809
ISBN13: 9786208578800
Publisher: Our Knowledge Publishing
Published: Jan 23 2025
Pages: 52
Weight: 0.18
Height: 0.12 Width: 6.00 Depth: 9.00
Language: English
Carbon Contracts for Difference (CCfD) are an innovative instrument for promoting decarbonization. They support the transition to low-emission technologies by covering the differential costs between new and conventional technologies and guaranteeing a CO2 base price. If the CO2 market price is lower than this base price, CCfDs compensate for the difference; if it is higher, repayments may be due. This reduces the financial risk for companies and facilitates the transition.This paper provides a comprehensive overview of CCfDs, analyzes how they work, sheds light on the financial background, identifies limitations and examines their application in European countries. In addition, the incentive effect on companies is illustrated through a model implementation. The results show that CCfDs are an important complement to existing instruments such as the EU Emissions Trading System (EU ETS) and can promote investment in new technologies.

Also from

Lanzendorfer, Alexander

Also in

Business General