117 scientists call on cabinet: no Tata Steel subsidy
A group of 117 scientists is calling on the government to abandon its planned €2 billion subsidy for Tata Steel.
Published on March 11, 2026
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The Dutch government wants to accelerate Tata Steel's greening with a one-off subsidy of two billion euros. However, behind this amount lies a web of hidden agreements. A group of 117 scientists is therefore calling on the cabinet to refuse the subsidy. The scientists, therefore, call the billion-euro subsidy ‘money down the drain’. They see the investment as a bottomless pit with no prospect of an independently profitable future.
The authors of the article on Tata Steel include professors from various universities, including the University of Amsterdam, Erasmus University Rotterdam, Vrije Universiteit Amsterdam, the University of Groningen, and Maastricht University. Researchers and economists from other institutions also contributed to the article.
Greening the largest CO2 emitter
Tata Steel accounts for more than seven percent of national emissions. Now the government wants to green the largest CO2 emitter in the Netherlands. Outgoing Minister Hermans signed a letter of intent with the steel company to this effect. The company will receive up to 2 billion euros for the first phase of the plan. This amount covers the construction of new installations. Tata Steel will replace one blast furnace with a Direct Reduced Iron installation and an electric furnace. This should be completed by 2030.
The taxpayer bears the risks
Not everyone is happy with the subsidy. The 117 researchers warn of a ‘subsidy drain’. The deal saddles the government with hundreds of millions of euros in additional annual costs. This amount is between 375 and 580 million euros per year and will continue until at least 2040. The government promises to compensate Tata Steel for future setbacks. For example, the state will cover the rising network costs. From 2027, this will cost the treasury around 87 million euros per year. In addition, the government will subsidize the purchase of more expensive biomethane. From 2032, this will cost between 195 and 330 million euros per year. The company will also be exempt from a national CO2 tax.
The taxpayer bears the risks, while any profits go to the company.
Wasted money
The financial support is highly controversial. Economists point to the steel company's weak financial basis. Tata Steel Netherlands is currently operating at a structural loss. In the 2023-2024 financial year, this loss amounted to 556 million euros. The transition to cleaner production only makes steel more expensive. This weakens its international competitive position.
Moreover, there are no firm guarantees from the Indian parent company. Tata Steel Limited has not injected any new capital into the Dutch branch since 2009. Nor does the parent company guarantee the debts in the event of bankruptcy. This means that the Dutch government is taking an enormous financial risk. There is a good chance the company will ask for support again during the next economic downturn. Scientists, therefore, call the billion-dollar subsidy ‘money down the drain’. They see the investment as a bottomless pit with no prospect of an independently profitable future.
Government defends the deal
The government defends the deal with the promise of rapid climate gains. However, the reality is proving more difficult. Tata Steel's ‘Green Steel Plan’ aims for complete CO2 neutrality by 2045. This is remarkably late. The European Emissions Trading System (ETS) is already forcing industry to operate in a climate-neutral manner by 2040.
Proponents of the subsidy also often point to the importance of European autonomy. The Netherlands should maintain its own steel production to remain independent. Economists dismiss this argument as an illusion. Tata Steel IJmuiden imports all the raw materials it needs from outside Europe. The company then exports 90% of the steel it produces. Only 11% goes to the Dutch manufacturing industry.
Alternatives and looking ahead
There are indeed alternatives to this expensive and risky course. The group of 117 scientists is calling on the cabinet to reject the subsidy. They advocate a broader, smarter use of public money. For example, the government would be better off investing the billions in large-scale electrification and the development of truly green hydrogen.
The government now faces a crucial choice. The letter of intent is not yet binding. A final decision will not be made until September 2026. Until then, politicians must weigh up the real costs and benefits honestly.