The report compares the implementation of Carbon Contracts for Difference (CCfDs) in the United Kingdom, Germany, France, the Netherlands, and Denmark.
CCfDs are long-term agreements designed to reduce regulatory uncertainty related to climate policy. Under CCfDs, projects compete for funding based on the cost and volume of CO₂ emissions they can reduce. The contract bridges the gap between a fixed strike price and a reference market price for carbon.
Most schemes are primarily based on price, but other factors such as deliverability, total emissions reduction, and local economic benefits are also taken into account. When setting the reference price, several approaches are considered: the EU Emissions Trading System (EU ETS), fixed linear pricing, a floor price, or a combination of these. Cross-chain risk accounting is addressed in the United Kingdom, but it is not considered in the other countries.