The Netherlands’ Ministry of Economic Affairs and Climate has opened a consultation for a suite of incentives for climate technology manufacturers, including a subsidy worth up to €50m ($54m) per company investing in electrolyser factories.

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The incentive would cover 15% of eligible costs for sites producing electrolysers or important components for green hydrogen projects such as electrodes, membranes, compressors, small-scale storage tanks, heat exchangers, H2 detectors and purification systems.

However, the scale of support rises to 20% if the factory is based in one of the areas that the EU has approved for regional aid.

The Dutch government also proposes to increase the subsidy by 20 percentage points if the manufacturer is a small company (a maximum 50 employees and a turnover or balance sheet of up to €10m), and 10 percentage points if it is a medium-sized enterprise (a maximum 250 employees, turnover of up to €50m and a balance sheet total of up to €43m).

So a small company would get 25% of eligible costs, and a medium-sized one 30%.

However, the proposal caps the incentive to €50m per company seeking to build a factory for electrolysers or hydrogen components.

The consultation is due to close on 3 March 2024, with a target date for the electrolyser and hydrogen equipment subsidies to open for applications in the second quarter of this year.

In its Net Zero Industry Act, the EU has proposed a target for 40% of the roughly 100GW of electrolysers deployed within the bloc by 2030 to be domestically produced, amid concerns from industry that the energy transition will lead to a dependence on low-cost technology imports from China.

However, this legislation mainly focuses on streamlining permitting, rather than direct financial support.

Hydrogen Europe estimates that there is 3.9GW of annual electrolyser manufacturing capacity currently operational in Europe, with the industry expected to increase this to 27.8GW by 2030, according to its latest Clean Hydrogen Monitor report.