A promising financial tool is spurring industrial innovation abroad. To drive growth in industries such as low-carbon steel, cement, chemicals, and aluminum, several countries in recent years have begun using contracts for difference policies. 

Without greater federal support to advance domestic competitiveness, American manufacturing is at risk of falling behind in global markets that value energy-efficient, low-carbon industrial production. Contracts for difference could be an efficient tool for providing this support. However, to date, there is little experience in the United States with contracts for difference policy. 

Read the ReportA group of experts across fields and organizations came together to write a report, published by the American Council for an Energy-Efficient Economy today, that explores the potential of a U.S. contracts for difference policy. It evaluates contracts for difference as a policy tool to boost innovation and low-carbon American manufacturing and outlines design considerations for policymakers. Our coauthors on the report are Seton Stiebert, Yuqi Zhu, William Shobe, Benjamin Longstreth, Aaron Bergman, and Chris Bataille.  

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https://www.aceee.org/blog-post/2025/09/contracts-difference-spur-clean-and-competitive-industry-options-federal