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Proposed Tata Steel subsidy may rise to €11 billion

Proposed Tata Steel subsidy may rise to €11 billion

News

Joseph Wilde-Ramsing

Boris Schellekens

7 September 2026

reading time 3 minutes

Key insights

The Dutch government is preparing to make €11 billion in taxpayer money available for a giant multinational – Tata Steel – to prop up environment-damaging, fossil-based steel production.
This is far more than the €2 billion currently being discussed in Dutch political debates, according to research by Milieudefensie and SOMO.
Tata presents its steel plans as “green” in order to qualify for billions in subsidies. Yet Tata’s plans are far from green, centring around switching only a part of the operation from one fossil fuel to another (natural gas). This means that the company will continue polluting.
In short, the Netherlands’ largest emitter of greenhouse gases can expect to receive the largest subsidy ever granted to a single company in the country.
The Dutch government is about to throw billions into a bottomless fossil-fuel pit, risking being drawn into a subsidy trap without delivering any climate benefits whatsoever.
In a rare public outcry, in March 2026, 117 prominent economists, including eighty professors, warned of this “subsidy trap”(opens in new window) . Even officials at the Dutch Ministry of Finance and Dutch courts have shared these concerns.

The world is burning. Now on course for at least 1.8 °C of warming, according to the UN(opens in new window) , and the affordability crisis rages (fuel and energy becoming unaffordable for many people). Meanwhile, as part of its plan to achieve 2030 climate targets, the Dutch government is entering into individual agreements with large industrial polluters with the purported aim of helping them reduce emissions more quickly, with subsidies and financial incentives from the government. The deals are called “tailor-made subsidies”.

Tata Steel is the largest emitter in the Netherlands, responsible for 7.6 per cent of national CO₂ emissions. If Tata Steel fails to become more sustainable, the rest of the Netherlands will have to compensate with disproportionately heavy measures to curb climate pollution. It is from this disadvantageous position that the Dutch government negotiated a tailored deal with Tata. This deal was formalised in a “Joint Letter of Intent(opens in new window) ” in September 2025.

SOMO and Milieudefensie examined the costs associated with the government’s tailor-made agreement with Tata, which runs up to 2045. It includes, for example, the costs of capturing and storing CO₂ beneath the seabed, for which Tata Steel is expected to apply for additional subsidies. Under the agreement, the government will also have to make payments to enable Tata’s production, through, for example, subsidies for biomethane, electricity grid tariffs and the processing of steel slag. These broad financial commitments, some of which are presented as linked to Dutch climate and sustainability goals, are set out in the letter of intent signed in 2025 by the outgoing government and the steel company.

Fossil-based steel

Tata presents its steel plans as “green” in order to qualify for billions in subsidies. However, if the plans as they currently stand go ahead, Tata will only replace one of their two blast furnaces, and switch to liquified fossil gas (LNG) instead of (sustainable) electricity. This is why the Dutch Advertising Code Committee recently rebuked(opens in new window) the company, stating: Tata is misleading the public by claiming that it will produce “green” or “clean” steel. Tata is switching from one fossil fuel to another, and only for a part of their production – that is the last thing the climate and environment need right now.

Bottomless pit

Government spending on Tata could end up being even higher. Financial setbacks at Tata Steel Netherlands could mean that the government must step in to keep the company afloat. And that is not inconceivable given that there are 13 ongoing or potential(opens in new window) legal proceedings against the company, including an ongoing criminal investigation by the Dutch Department of Justice over allegations of systematically and deliberately emitting pollution that is toxic to local residents of IJmuiden. This government is about to throw billions into a bottomless fossil-fuel pit, risking being drawn into a subsidy trap(opens in new window) .

The Dutch House of Representatives is currently awaiting a letter from Minister for Climate and Green Growth Stientje van Veldhoven, which should clarify how Tata Steel and the government intend to proceed in light of the ongoing criminal investigation.

The polluter calls the shots

The tailor-made agreement lacks firm climate requirements setting out when Tata Steel must stop using fossil gas and genuinely become more sustainable. The lack of binding conditions to protect the health of local residents is also deeply concerning. Tata is sitting at the table with the minister and helping to write the plan for its own subsidy. The polluter calls the shots – and gets billions in direct and indirect subsidies. It is time for the minister to take back control and impose firm climate requirements.

Reclaiming that wealth to tackle energy poverty

The €10.8 billion that the Tata subsidy could potentially end up costing the government (or, rather, the tax payers of the Netherlands) should instead be invested in affordable public transport and renewable energy for everyone, and in making the homes of people living in energy poverty more sustainable. Research by the Netherlands Organisation for Applied Scientific Research(opens in new window) shows that €3 billion is needed to permanently improve the energy efficiency of all homes occupied by people living in energy poverty.

The calculations of the Dutch government’s potential subsidies to Tata can be found via this link.

Responses from Tata steel and the Dutch government

SOMO reached out to Tata Steel and the Dutch Ministry of Climate and Green Growth for comment on our draft findings and analysis. Tata responded that it can not verify the calculations and assumptions made by SOMO.

SOMO is transparent about which assumptions we have made and how we have arrived at our findings. All figures and calculations can be found here.

The Dutch Ministry of Climate and Green Growth has previously commented that the tailor-made agreement is not finalised and that the government has not yet committed to anything. You can read the ministry’s response here (in Dutch).