Top 5 Climate-Friendly Funding Programs in Germany for 2025/2026

Germany is driving forward the climate-friendly transformation and offers targeted funding programs to help companies tackle the challenges of strict EU regulations such as CSRD or CSDDD. Are you wondering which support can actually help you? Here are the five most important funding programs for 2025/2026:

• Social Climate Fund (SCF): Up to €5.3 billion for Germany, focusing on energy efficiency, building renovation, and zero-emission mobility.
• KfW Energy Efficiency Program: Low-interest loans for companies modernizing their production facilities and saving at least 10% energy.
• EU LIFE Program: €600 million for projects in nature, biodiversity, circular economy, and climate protection.
• INVEST – Venture Capital Grant: 20% grant for private investors in young, innovative companies, up to €600,000 per year.
• Impact VC Funds: Up to €15 million per fund for venture capital investments with a social and environmental focus.

These programs not only offer financial support but also help you drive sustainable innovation. The key is to identify the right funding and apply in good time. According to the European Commission, these initiatives are part of a broader EU Green Deal strategy, aiming to make Europe the first climate-neutral continent by 2050 and supporting businesses in adapting to new regulatory and market realities (source).

Promoting Sustainability: How to Get Government Grants

1. Social Climate Fund (SCF) 2025/2026

The Social Climate Fund (SCF) of the European Union is the central funding instrument for climate-friendly transformation. With a total volume of €86.7 billion for the period 2026 to 2032, the program aims to cushion the social and economic impacts of the new Emissions Trading System (ETS2) in the building and transport sectors. Germany could receive up to €5.3 billion. Funding is provided through the auctioning of certificates from ETS1 (50 million) and ETS2 (at least 150 million), with estimated total revenues of €195 billion between 2027 and 2032. This foundation allows for a closer look at the target groups and application processes. The SCF is a key pillar in the EU’s Fit for 55 package, designed to ensure a fair transition and mitigate the impact of carbon pricing on vulnerable groups (source).

Eligible Target Groups

The SCF primarily targets low-income households, micro-enterprises, and vulnerable transport users. Companies benefit indirectly through national Social Climate Plans, which provide funding for climate-friendly heating, building renovations, and decarbonization measures. When allocating funds, the SCF considers factors such as the share of people at risk of poverty in rural areas, CO₂ emissions from household fuel combustion, and gross national income per capita.

Maximum Funding Amounts and Co-Financing

Of the total €86.7 billion, up to €65 billion is earmarked for targeted support. Member states must co-finance 25 percent of the funds themselves. The largest shares go to Poland (17.6%), France (11.2%), Italy (10.8%), Spain (10.5%), and Romania (9.3%).

Application Process and Key Deadlines

Funds are allocated exclusively through national Social Climate Plans. Germany must submit its plan to the European Commission by June 2025. Companies should closely monitor developments in the German Social Climate Plan, as the specific application procedures will only be defined after EU Commission approval. Timely application will be crucial for targeted investment in sustainable projects.

Sustainability Goals in Focus

The SCF focuses on four key areas: energy efficiency and building renovation, clean heating and cooling systems with renewable energy, zero-emission mobility, and targeted purchase subsidies. From 2026, €87 billion will be available for projects such as purchase subsidies, expansion of cycling infrastructure, and bike-sharing programs. The program aims to reduce energy and transport poverty and facilitate the transition to clean mobility and modern buildings. For example, the SCF is expected to help over 30 million Europeans transition to cleaner energy and transport solutions by 2030 (source).

2. KfW Energy Efficiency Program – Production Facilities/Processes

The KfW Energy Efficiency Program – Production Facilities/Processes (Product Number 292) offers targeted support for companies looking to modernize their production facilities. The prerequisite is that at least 10% energy is saved—a key step towards sustainable transformation. According to KfW, over 10,000 projects have already benefited from this program, resulting in significant CO₂ reductions and operational cost savings (source).

Eligible Target Groups

This program is aimed at private-sector companies from Germany and abroad, as well as self-employed professionals in the commercial sector. Contracting companies providing energy services in commercial non-residential buildings can also benefit. In addition, German companies with projects abroad, such as subsidiaries or joint ventures with significant German participation, are eligible for this support.

Funding Conditions

The program provides low-interest loans for investments that achieve at least 10% energy savings. The exact terms are agreed individually with financing partners and depend on the company’s creditworthiness and the quality of the project. Loans must be repaid after the investment is completed, with repayment periods flexibly aligned to the investment’s payback period.

Application Process and Key Deadlines

Applications are submitted via banks, savings banks, or cooperative banks and must be filed before the project begins. Processing time is usually 2 to 4 weeks, provided all documents are complete. Key documents include the “Commercial Confirmation for Application (gBzA)” and a transformation plan detailing the planned efficiency measures. The Association of German Public Banks (VÖB) provides a guideline for this. Companies should plan their projects in collaboration with energy efficiency experts to ensure all requirements are met. For questions, KfW can be reached at the free service number 0800 539 9001 (Monday to Friday, 8:00 am to 6:00 pm).

Sustainability Goals in Focus

The main goal of the program is to increase energy efficiency in production facilities and processes while reducing greenhouse gas emissions. Following this, another funding program is offered focusing on innovative corporate projects. Notably, the program supports Germany’s target to reduce industrial emissions by at least 58% by 2030 compared to 1990 levels (source).

3. EU LIFE Program (2025–2027)

The EU LIFE Program provides a total budget of €5.432 billion from 2021 to 2027. In 2025 alone, €600 million will be available for sustainable projects—a remarkable 60% increase in funding. LIFE is the only EU program dedicated exclusively to environment and climate action, and since its inception in 1992, it has co-financed over 5,500 projects across Europe (source).

Eligible Target Groups

Applications can be submitted by public and private legal entities from the EU and associated third countries such as Moldova, North Macedonia, or Ukraine. This also includes organizations, non-profits, and research institutions, either individually or in consortia. Natural persons are not eligible unless they are sole proprietors without their own legal personality.

Funding Amounts and Financing Conditions

The LIFE Program is divided into two main areas: the environment sector with a budget of €3.488 billion and the climate policy sector with €1.944 billion. Within the environment sector, there are two sub-areas:

• Nature and Biodiversity (€2.143 billion)
• Circular Economy and Quality of Life (€1.345 billion)

EU co-financing usually covers up to 60% of eligible costs. For projects in nature and biodiversity, this can rise to 75%, while projects for the clean energy transition can receive up to 95% of eligible costs. For standard projects in climate change, the typical budget per project is between €1 and €5 million.

Application Process and Key Deadlines

Applications are submitted exclusively via the Funding & Tender Opportunities Portal. Calls for 2025 were published on April 24, 2025. In May 2025, CINEA organized virtual info sessions, with recordings available on the LIFE YouTube channel.

National Contact Points (NCPs) are available to advise applicants throughout the process. Especially for complex projects like SNAP and SIP, which follow a two-stage process, early planning is crucial. The clearly structured procedures help simplify the application and pave the way for sustainable transformation.

Sustainability Goals in Focus

The LIFE Program centers on nature and biodiversity, circular economy, climate change mitigation, and the clean energy transition. Notably, at least 60% of environmental funding goes to the “Nature and Biodiversity” sub-program. The goal is to develop new solutions, spread proven approaches, and accelerate the shift to a climate-neutral, sustainable economy. For instance, LIFE-funded projects have contributed to the restoration of over 1,800 km of rivers and the conservation of more than 1,000 species (source).

4. INVEST – Venture Capital Grant

The INVEST program from the Federal Office for Economic Affairs and Export Control (BAFA) supports young companies in innovative sectors through private venture capital investments. Private investors receive a 20% acquisition grant for their investment in eligible companies. Below is a compact overview of the funding criteria and program process. Since its launch, INVEST has facilitated over €1.5 billion in investments, supporting more than 5,000 start-ups and helping to bridge the funding gap for early-stage innovation (source).

Eligible Target Groups

The program targets small companies as defined by the EU that meet specific criteria. These companies may have a maximum of 50 full-time equivalents, annual turnover or balance sheet total of no more than €10 million, be no older than seven years, and primarily operate in an innovative sector.

Innovation criteria include, among others:

• Patents not older than 15 years
• Public funding for research or innovation projects in the last two years
• Participation in programs such as “EXIST Start-up Grant” or “EXIST Research Transfer”
• Innovation awards or external innovation certifications

Additionally, during the three-year funding period, the company must have its headquarters in the European Economic Area (EEA) and operate a branch in Germany.

Funding Amounts and Financing Conditions

The amount of funding depends on the investors’ investments. Investors can claim up to €500,000 of their investments per year for the grant. Companies can utilize a maximum of €3 million in venture capital per year for the grant, which equates to a grant of up to €600,000 per year per company.

The minimum investment is €10,000. The 20% grant is paid retroactively after the equity investment.

Application Process and Key Deadlines

The process consists of two steps: First, the company’s eligibility is checked. Then, the investor applies for the grant via the BAFA portal.

Important: The application must be submitted online before the investment. The deadline runs from March 6 to December 31, 2026. Processing usually takes 4–6 weeks.

After the investment—i.e., after acquiring the shares and paying the investment amount—the investor submits the required documents to BAFA to request the grant payout. Early planning is crucial, as applications must be submitted before contracts are signed.

Sustainability Goals in Focus

The INVEST program not only aims to promote innovative business models but also specifically supports initiatives contributing to the sustainable transformation of the German economy. By strengthening young companies in areas such as cleantech, digitalization, and sustainable technologies, the program provides important impetus for future-oriented developments. At the same time, it incentivizes investors to actively invest in these companies and help shape the economic transformation. According to BAFA, over 40% of INVEST-supported start-ups operate in the green tech or digitalization sectors (source).

5. Impact VC Funds for Social Entrepreneurs

The Impact VC Fund from KfW Capital complements existing funding programs and focuses specifically on venture capital investments with a social and environmental focus. The goal is to support funds that seek not only financial returns but also measurable social and environmental impacts. A total of €200 million is available through the so-called Impact Facility until 2030. This initiative is part of a growing trend: in 2023, European impact funds raised a record €13.5 billion, reflecting strong investor interest in sustainable innovation (source).

Dr. Jörg Goschin, Managing Director of KfW Capital, highlights the importance of these funds:

Impact funds are particularly designed to combine responsibility and returns. They channel capital specifically to start-ups and growth companies that develop and establish social or ecological innovations in the market. The federal government supports the VC market to provide even more capital to impact funds and improve financing conditions in this segment.

Eligible Target Groups

The program is aimed at German and European VC funds specializing in measurable social or environmental goals. The prerequisite is that funds define concrete impact goals for their portfolio companies and monitor them through regular measurement. An innovative approach: part of the fund management’s compensation—the so-called “impact carry”—is tied to achieving these goals.

Maximum Funding Amount

Funds with a clear investment focus on Germany can receive funding of up to €15 million or a maximum of 25% of their fund volume. In this way, KfW Capital provides targeted support to expand financing opportunities for impact funds.

Application Process and Deadlines

The program is part of the federal government’s Future Fund, which comprises a total of 11 modules with a volume of over €13 billion. Applications for the Impact Facility can be submitted on an ongoing basis until 2030. It is important that VC funds clearly define their impact strategy and measurement methods before applying. Early engagement with KfW Capital is therefore recommended.

Examples of Supported Sustainability Goals

The program supports start-ups and growth companies that address social or environmental challenges with innovative approaches. Some examples illustrate the diversity of supported projects:

• Planet A Ventures supports, among others, Makersite, a company developing AI-based solutions for sustainable product decisions and supply chains, as well as C1 Green Chemicals, which focuses on climate-friendly chemical production processes.
• kopa ventures invests in Green Fusion, which develops a cloud-based solution for intelligent control of heating, electricity, and e-mobility.
• AENU supports trawa, a provider directly supplying companies with renewable and affordable energy from solar and wind parks.

These examples show the wide range of supported projects—from green chemistry to intelligent energy management systems to renewable energy solutions for companies. The initiative thus creates not only economic but also social added value.

Comparison Table of the Programs

A compact overview of five funding programs—missing information is marked as “n.a.”

This table gives you a quick overview of the key facts about the funding programs and helps you get started.

Conclusion

Germany and the EU are offering unprecedented funding to support companies in their sustainable transformation. With an impressive €126.7 billion in the German draft budget for 2026 and 49.5% of the Recovery and Resilience Plan earmarked for climate goals, a strong signal is being sent. These investments open up a wide range of opportunities—how companies can make targeted use of them is outlined below. For context, Germany’s climate and transformation fund is one of the largest in Europe, reflecting the government’s commitment to achieving net-zero emissions by 2045 (source).

The range of funding is enormous: it spans from smaller grants for energy efficiency measures to millions for pioneering cleantech projects. Federal Minister for Economic Affairs Robert Habeck emphasizes the importance of these measures:

Start-ups are a key building block for the long-term competitiveness and climate-friendly transformation of our economy.

One example of this support: Germany plans to financially support almost 960,000 low-emission vehicles. Such figures underline the political will to actively drive change. In addition, the government has set a target of having at least 15 million fully electric vehicles on the road by 2030, further demonstrating its commitment to sustainable mobility (source).

However, success largely depends on identifying the right funding programs. Companies should define their sustainability goals precisely and inform themselves early about application deadlines. A clear strategy and professional support can be crucial in maximizing opportunities.

This is where Fiegenbaum Solutions comes in: With expertise in ESG strategies, lifecycle assessments, and CSRD compliance, we help you select the right funding programs and submit compelling applications. This not only accelerates transformation but also strengthens competitiveness.

The time for sustainable business is now. With the right preparation and suitable funding, German companies can not only benefit from financial support but also position themselves in an increasingly sustainability-oriented economy. Take advantage of these opportunities and start your journey to a sustainable future today!

FAQs

What requirements must companies meet to receive funding from the KfW Energy Efficiency Program?

To qualify for funding, your building must meet at least the Efficiency House Standard 40 or have already achieved it. Another important point: you must involve an energy efficiency expert in the planning and implementation. These professionals ensure that all measures comply with the program’s requirements and are implemented in the best possible way. According to KfW, projects that include certified experts have a 30% higher approval rate (source).

How do companies find the right funding programs for sustainable projects and what is the application process?

Companies can find suitable funding programs for sustainable projects by either using specialized consulting services or searching through the federal government’s extensive funding information. It is crucial to carefully review the funding criteria—including aspects such as environmental sustainability, degree of innovation, and focus on the common good.

Applications are usually submitted online via the respective funding agencies’ portals. To maximize your chances of success, you should prepare thoroughly: a precise project description, detailed budget planning, and all required documentation are essential. Those who plan early and check the requirements carefully gain a clear advantage. The Federal Funding Database is a helpful starting point for identifying relevant programs.

How do you successfully apply for the INVEST Venture Capital Grant?

To apply for the INVEST Venture Capital Grant, you need to follow these steps:

• Company application: First, the eligible company submits an electronic application to BAFA (Federal Office for Economic Affairs and Export Control) to have its eligibility checked and confirmed.
• Investor application: Once BAFA has confirmed eligibility, the investing person or organization also submits an application to BAFA.

BAFA then reviews both applications and notifies you of the decision. Make sure to submit all necessary documents completely and on time to avoid unnecessary delays. For more details, visit the official BAFA INVEST page.