VEKI — the Dutch subsidy scheme for energy efficiency in industry — can meaningfully strengthen the business case for switching to clean industrial heat technologies by offsetting part of the upfront investment cost. The scheme is specifically designed for industrial companies whose decarbonisation projects would not be financially viable without support, making it a practical tool for sustainability managers evaluating alternatives to fossil fuel-fired heat. Below, we answer the most important questions about how VEKI works, what it covers, and how it applies to technologies like Iron Fuel.
What types of industrial heat projects does VEKI fund?
VEKI funds industrial investments that lead to an absolute reduction in CO₂ emissions in the Netherlands by 2030. The scheme targets companies in manufacturing and waste processing that invest in production installations on Dutch soil, where the project would take more than five years to pay back without subsidy support.
In practice, this covers a broad range of heat-related interventions. Eligible projects typically include:
- Switching from fossil fuel-fired boilers to low-carbon or carbon-free heat sources
- Large-scale process efficiency improvements that reduce energy consumption
- Electrification of industrial heat processes
- Integration of hydrogen-based heat generation
- Replacing primary fossil carbon in the production chain
The subsidy covers both investment costs and operational costs, which is particularly relevant for technologies that carry a higher upfront CAPEX versus OPEX profile compared to conventional fossil fuel systems. Companies must remain the owner of the installation and operate it for at least ten years after commissioning. Importantly, the installation must also be capable of operating profitably without subsidy after that ten-year period, so VEKI is designed as a bridge, not a permanent crutch.
How does VEKI calculate the subsidy amount for a heat project?
The VEKI subsidy amount is determined by the gap between the cost price of the sustainable production process and the market price of the output. In other words, the scheme compensates for the cost difference between decarbonised energy and the fossil fuel alternative it replaces, a critical factor when evaluating the replacement of natural gas with cleaner alternatives.
Applicants are required to calculate both the greenhouse gas reduction and the required subsidy using standardised calculation models provided by the Dutch government. The subsidy is awarded through a competitive bidding process, and bids above €300 per tonne of CO₂ avoided are automatically excluded. This ceiling means that only technologies with a credible cost trajectory can compete effectively.
The minimum financial support that can be requested is €30 million, which means VEKI is oriented toward larger industrial investments rather than small-scale pilots. For sustainability managers building an internal business case, this has a practical implication: VEKI works best when bundled into a larger project scope, where the combined investment and emissions impact justify the application effort and meet the minimum threshold.
Does Iron Fuel Technology qualify for VEKI support?
Iron Fuel Technology is well positioned to align with VEKI’s eligibility criteria, though each application is assessed on its specific project parameters. The technology directly addresses the replacement of fossil fuel-fired heat in industrial production processes, which sits squarely within VEKI’s supported categories, particularly the replacement of primary fossil carbon in the production chain.
Several characteristics of Iron Fuel Technology are relevant to a VEKI application:
- Near-zero direct CO₂ emissions: The Iron Fuel Boiler produces just 10 kg of CO₂ per MWhth during combustion, with that output stemming solely from a pilot safety flame. This represents a dramatic reduction compared to natural gas-fired alternatives.
- High energy efficiency: The boiler achieves up to 95% energy efficiency at demo scale (TRL7), which supports a strong emissions-per-unit-of-heat argument in the subsidy calculation.
- Grid independence: Unlike electrification, Iron Fuel Technology does not depend on grid connection capacity, a meaningful advantage in regions affected by grid congestion.
- Long-term operability: Iron Fuel Boilers are designed for long operational lifetimes, consistent with VEKI’s requirement that installations remain operational and profitable beyond the ten-year subsidy period.
One important nuance: the full-chain CO₂ reduction of 0.55 tCO₂eq per tonne of iron fuel applies when low-carbon hydrogen is used as feedstock, calculated under EU greenhouse gas methodology. This condition should be clearly documented in any VEKI application to substantiate the emissions reduction claim. You can learn more about how the technology works on our Iron Fuel Technology page.
How much can a company realistically offset through VEKI when switching to iron fuel?
The offset a company can achieve through VEKI depends on the scale of the installation, the verified CO₂ reduction, and the cost differential between iron fuel and the fossil fuel being replaced. VEKI compensates for the economic gap, so a larger gap, combined with a larger installation, translates to higher potential support.
To put this in concrete terms: the Iron Fuel Boiler system carries an investment cost of €0.5 million per megawatt thermal (M€/MWth). For a mid-sized industrial heat installation of, say, 10 MWth, the capital outlay for the boiler system alone would be around €5 million. VEKI’s subsidy is calculated on the cost-price-to-market-price gap over the operational period, so the actual offset depends heavily on iron fuel pricing relative to natural gas at the time of application, as well as the EU ETS carbon price, which affects the competitiveness of fossil alternatives.
What VEKI cannot do is eliminate the full cost difference on its own. Sustainability managers should treat VEKI as one layer in a multi-instrument financing stack, meaningful support that improves the payback period, but most effective when combined with other funding mechanisms.
What other funding sources complement VEKI for industrial heat transitions?
Several funding instruments work alongside VEKI to build a complete financing package for industrial decarbonisation projects. Understanding the landscape helps sustainability managers structure a business case that does not rely on a single source.
Key complementary sources include:
- EU Innovation Fund: Supports innovative low-carbon technologies at industrial scale. RIFT itself received a €30.7 million grant from the EU Innovation Fund as part of its €113.8 million funding package, demonstrating that the fund actively backs Iron Fuel Technology-related projects.
- InvestEU: The European Commission is expanding InvestEU’s financial guarantee capacity, with the aim of mobilising up to €50 billion for clean tech deployment. This can support project financing structures for large industrial investments.
- NIKI (Nationale Investeringsregeling Klimaat-Industrie): A Dutch national scheme targeting large-scale industrial decarbonisation, with a minimum support request of €30 million. NIKI focuses on direct CO₂ savings in production processes and replacement of fossil carbon in supply chains, highly relevant for iron fuel adoption.
- EU ETS revenues: Rising carbon prices under the EU Emissions Trading System improve the financial case for switching away from fossil fuels, effectively reducing the cost gap that VEKI and other subsidies need to bridge.
- Private and institutional investment: As demonstrated by RIFT’s Series B led by PGGM, institutional capital is increasingly available for credible industrial decarbonisation projects.
The European Commission’s Clean Industrial Deal, presented in 2026, further signals a direction of travel: over €100 billion is being mobilised to support clean industrial manufacturing across the EU, with the Innovation Fund being strengthened and an industrial decarbonisation bank proposed. For companies planning multi-year investment roadmaps, this broader policy environment matters as much as any individual subsidy scheme.
When should a company apply for VEKI to support a clean heat project?
Timing is critical with VEKI because the scheme operates through periodic application rounds rather than as a continuously open programme. A new round is expected to open in the autumn of 2026, and companies can already submit a project idea assessment (projectideetoets) to test eligibility before the formal round opens.
From a preparation standpoint, companies should ensure the following before applying:
- Basic engineering of the project is completed — this is a formal requirement
- The project can start within one year of receiving a positive decision
- The installation will be commissioned within four years of project start
- The emissions reduction and required subsidy have been calculated using the official government models
For companies exploring Iron Fuel Technology, the practical advice is to begin the feasibility and engineering process now. The lead time for basic engineering, subsidy preparation, and internal approval processes means that companies targeting the autumn 2026 round should already be in active project development. Volatile energy prices and grid congestion are making the status quo increasingly costly, waiting for the perfect moment carries its own financial risk.
How we help make the business case for clean industrial heat
Building a compelling business case for industrial heat decarbonisation requires more than technology, it requires a partner who understands the financial, operational, and regulatory landscape. That is exactly where we come in.
Our Iron Fuel Boiler solution is designed to integrate with existing industrial setups, reducing the complexity and cost of transition. Here is what we bring to the table for sustainability managers evaluating a switch:
- Zero direct CO₂ emissions during combustion, with only 10 kg CO₂/MWhth from the pilot safety flame
- Up to 95% energy efficiency at TRL7 demo scale, outperforming many conventional fossil fuel boilers
- Grid-independent operation — no dependency on electrification infrastructure or grid capacity
- Long-term fuel supply agreements — iron fuel priced at €140 per tonne, providing cost predictability in a world of volatile energy prices
- Subsidy-ready technology — our technology profile aligns with VEKI, NIKI, and EU Innovation Fund criteria, and we can support you in structuring the technical inputs for your application
We are already working with industrial partners on the first commercial deployments of Iron Fuel Technology. If you are a sustainability manager evaluating your options for decarbonising industrial heat, we would welcome the conversation. Get in touch with our team to explore what Iron Fuel Technology could mean for your facility and your funding strategy.
Frequently Asked Questions
What is the minimum project size needed to make a VEKI application worthwhile for an iron fuel installation?
Given VEKI’s minimum support threshold of €30 million, companies should look to scope projects at a scale where the combined capital investment and operational cost differential justify the application effort. For Iron Fuel Technology, this typically means installations in the range of 10 MWth or larger, or projects bundled across multiple production sites or heat applications. Sustainability managers should work with their engineering and finance teams early to assess whether a standalone project meets the threshold, or whether a broader decarbonisation programme can be structured to qualify.
What are the most common mistakes companies make when applying for VEKI funding?
One of the most frequent pitfalls is underestimating the preparation required — VEKI mandates that basic engineering is completed before submission, and many companies underestimate how long this takes in practice. Another common mistake is submitting a bid above the €300 per tonne of CO₂ avoided ceiling without having stress-tested the cost assumptions, which leads to automatic exclusion. Finally, companies often treat VEKI as a standalone solution rather than one layer in a broader financing stack, which can result in a business case that looks viable on paper but is fragile in execution.
How does grid congestion affect the choice between electrification and Iron Fuel Technology, and does VEKI treat them differently?
VEKI does not explicitly favour one decarbonisation technology over another — what matters is the verified CO₂ reduction and the cost-price gap relative to the fossil alternative. However, grid congestion is a practical constraint that can make electrification projects undeliverable within VEKI’s four-year commissioning window, effectively disqualifying them on timeline grounds. Iron Fuel Technology’s grid-independent operation removes this bottleneck entirely, making it a more predictable choice for companies in regions where grid capacity is constrained and connection timelines are uncertain.
Can a company apply for both VEKI and NIKI for the same iron fuel project?
VEKI and NIKI are distinct schemes with different structures, but companies should carefully review the stacking rules that apply to each round, as double-funding of the same cost base is generally not permitted under Dutch and EU state aid rules. That said, it is possible to structure a larger programme where different components or phases are supported by different instruments. Engaging a subsidy advisor with experience in Dutch industrial decarbonisation schemes early in the process is strongly recommended to map out a compliant and optimised funding architecture.
What documentation does a company need to prepare to support the CO₂ reduction claim for an Iron Fuel Technology project?
A robust VEKI application for an iron fuel project should include a full lifecycle emissions calculation using EU greenhouse gas methodology, clearly documenting the source of iron fuel and the hydrogen feedstock used in its production. The claim of 0.55 tCO₂eq per tonne of iron fuel saved is contingent on the use of low-carbon hydrogen, so supply chain documentation and feedstock certification will be critical to substantiate the numbers. Companies should also prepare a comparison baseline using the fossil fuel system being replaced, calculated with the standardised government models, to demonstrate the net reduction credibly.
How should a sustainability manager build the internal business case for iron fuel before going to VEKI?
The internal business case should be structured in layers: start with the unsubsidised economics, including the capital cost of the Iron Fuel Boiler system (€0.5M per MWth), the fuel cost at the contracted price of €140 per tonne, and the avoided EU ETS carbon costs at current and projected carbon prices. Then model the VEKI subsidy as a scenario that shortens the payback period, and layer in complementary funding sources such as the EU Innovation Fund or InvestEU to show the full financing picture. Presenting the business case as a range of scenarios — base case, subsidised case, and downside — gives internal decision-makers the confidence to approve project development spend before the formal application window opens.
What happens if the VEKI round is oversubscribed — is there a fallback strategy for companies that miss out?
VEKI operates as a competitive bidding process, meaning that if a round is oversubscribed, lower-ranked bids may not receive support even if they are technically eligible. Companies should treat any single VEKI round as one opportunity rather than a guaranteed outcome, and build a parallel funding strategy that remains viable without VEKI support. Practically, this means progressing engineering and permitting in parallel with the application, and maintaining active dialogue with EU Innovation Fund programme managers and private financing partners so that the project is not entirely dependent on a single subsidy outcome.
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