Carbon Contracts for Difference (CCfDs) represent an innovative policy instrument to support industrial decarbonisation in Germany by linking project-specific base prices to developments in EU ETS certificate prices. Our study analyses a use case in which process-related CO₂ emissions from a cement plant are captured and stored underground using deep geothermal systems. A model-based assessment evaluates three EU ETS price paths and demonstrates that price dynamics are the key determinant of subsidy levels and overall economic efficiency. Depending on the price trajectory, CCfDs can result in substantial funding requirements or repayment obligations, highlighting significant planning uncertainty.

In addition to market factors, site-specific CO₂ absorption capacity of geothermal fluids emerges as a critical technical parameter influencing the feasibility and scalability of underground storage. Geological heterogeneity limits the transferability of results and underlines the need for detailed site assessments and long-term geochemical analysis.

Overall, CCfDs currently provide only limited economic benefits for this application but constitute an important bridging instrument for industrial transformation. Their effectiveness depends on stable regulatory frameworks, reliable EU ETS price signals, and continued technological and geoscientific advancements.