US electrolyser maker Cummins is to scale up its Belgian electrolyser factory to 1GW, after securing cash from a €5.4bn ($5.3bn) state aid fund sanctioned by the EU.

The expanded proton exchange membrane (PEM) electrolyser factory in Oevel, northern Belgium, aims of developing “new generation” of electrolyser cell stacks to power large-scale hydrogen plants, Cummins said.

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The Oevel factory also produces alkaline electrolysers, but it appears Cummins is only expanding PEM manufacture at the site.

The announcement marks a vote of confidence in Europe’s nascent green hydrogen industry, which sector leaders warn is facing a possible “mass exodus” to the US following President Biden’s game-changing Inflation Reduction Act passing into law.

“Innovation is key in this fast-growing market, and Europe has the unique opportunity to become the technology, design and production hub for hydrogen generation equipment,” said Alexey Ustinov, vice president of electrolysers at Cummins.

“By scaling manufacturing capacity, Cummins will continue to drive the green hydrogen economy in Europe and globally to support new infrastructure projects and advance government decarbonisation goals."

The project will receive funding from a regional agency, the Flanders Innovation and Entrepreneurship Agency (VLAIO), as part of the Hy2Tech project, a joint collaboration between 35 different companies and organisations across 15 European countries that aims to build a continent-wide “hydrogen ecosystem” from the ground up.

The Hy2Tech scheme was granted Important Project of Common Interest (IPCEI) status by the European Commission (EC) in July, opening the door for it to access up to €5.4bn in public spending.

“This funding from IPCEI is important for the entire hydrogen value chain,” Ustinov continued. “Continuously accelerating R&D capabilities and increasing our manufacturing capacity will help us respond to growing market demand in Europe and globally.”

Cummins, which did not disclose how much cash it would receive from VLAIO, has already added capacity at its Canadian plant and is building two new 500MW electrolyser factories in Spain and China.