Government to offset industry’s electricity costs in 2027

The government is allocating an additional €150 million in 2027 to help offset industry’s high electricity costs. This brings the support forward by a year. The funding comes with a condition: companies must invest at least half of the amount they receive in sustainability improvements. The government is currently working out the details of the scheme.

Under the coalition agreement, the compensation was due to start in 2028. For that year, €345 million is available for industry. From 2029, annual funding will amount to €495 million until 2035. Next spring, the government will decide how to allocate the funds for 2028 onward.

Compensation tied to sustainability investments

The government lists several ways to meet the investment requirement. These include energy savings, electrification, renewable electricity generation, electrolysis, and more flexible electricity use.

For 2027, the government has chosen to provide support through the European CISAF framework. This framework is part of the Clean Industrial Deal. Through this approach, the government aims to ensure companies can receive support next year.

European rules limit the options

The government assessed several ways to lower electricity costs. It considered grid tariffs, electricity prices, and taxes.

A subsidy to TenneT for the offshore grid could lower grid tariffs for everyone. According to the government, however, industry would benefit only to a limited extent. Legal advice indicates that the Dutch Energy Act does not allow these benefits to be directed specifically toward industry. This would also require approval from the European Commission.

The government considers direct compensation for grid costs the most efficient approach. However, European state aid rules currently do not allow this. The government is therefore advocating changes to those rules in Brussels. The outcome is uncertain; in any event, this approach will not be feasible in 2027.

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