Norway's Nel has 3 U.S. states competing for its IRA investment
OSLO, March 14 (Reuters) - Norwegian hydrogen firm Nel has three U.S. states competing with incentives such as cash and tax breaks to be the site of the company's new U.S. factory and plans to make a decision in the coming months, it told Reuters. The move is the latest example of a European firm looking to take advantage of the huge incentives included in the U.S. Inflation Reduction Act (IRA) and U.S. states competing for their investment.
"Demand is there, and it makes sense to establish production there - should Americans continue to be a bit protectionist you have to be where they today offer financial support for establishing factories," Nel CEO Haakon Volldal said in an interview. Nel, which makes electrolysers used in hydrogen production, did not disclose the three U.S. states competing for its investment, nor how their packages differ.
Its comments echo those of Germany's Thyssenkrupp Nucera , which also makes machinery that produces hydrogen. Hydrogen is considered "green" when produced using renewable energy, which is seen as key to decarbonising industry and so meeting climate targets. Governments worldwide are looking to boost the nascent industry, and the European Commission is expected to announce its response to the IRA this week. Nel has a production site in Norway, and a U.S. one in Connecticut. It raised $155 million in a private placement this month partly to finance a new 4 gigawatt (GW) U.S. factory.
Norway is not a member of the EU but is part of the European common market. The European framework lacks transparency and predictability, and while Brussels is moving in the right direction it's not happening fast enough, Volldal said. "The smartest thing now is to build the next facility in the U.S. and it is unlikely that EU will make that decision look bad from a business perspective anytime soon," he said. The short-listed U.S. states offer skilled employees and suppliers used to servicing automation equipment and sensitive chemical processes. Apart from incentives, other factors that Nel is taking into consideration include tax rates, logistics and the cost of electricity and other utilities in the states. "The great thing about IRA is that it is easy to assess what you will get ... the financial mechanism is in place - it is far from perfect, but it is there," Volldal said.
(Reporting by Victoria Klesty Editing by Mark Potter) Messaging: email@example.com))