The Netherlands is planning to introduce renewable hydrogen obligations for the transport sector and industry by 2025-26 and will aim for installed electrolyser capacity of 8GW by 2032, according to climate and economy minister Rob Jetten.
A combination of instruments such as purchase obligations and subsidies will be used to help scale up renewable hydrogen consumption and production, Jetten said in a letter to the Dutch second chamber.
Extensive measures will be needed to meet EU targets set out in the bloc's revised Renewable Energy Directive (RED III), Jetten noted. The EU regulations call for 42pc of hydrogen used in industry to come from renewable sources, with the quota to rise to 60pc by 2035, while separate goals will be set for the transport sector. But it will be up to member states how they transpose the rules into national law and which measures they take to meet the targets.
To put the Netherlands on the right track and to create demand certainty, initial obligations in the transport sector will be introduced from 1 January 2025, with mandates for industry to take effect a year later, Jetten said. But he did not specify at what level the initial quotas will be set and noted that "the first years" will serve as a "test phase". The ministry may allow consumers to trade their obligations and shift them between years, he said. Consultations on the government's plans are scheduled to take place later this year.
European industry participants have called for speedy clarifications on how obligations will be implemented on a national level. Romania last week became the first EU country to adopt a law setting mandates for renewable hydrogen use in transport and industry from 2030 onwards, with the rules specifying potential penalties for non-compliance.
Demand-side subsidies
The Netherlands will also consider demand-side subsidies as it seeks to meet the consumption targets, Jetten said. The exact design of subsidies and potential recipients are to be worked out by spring 2024. The system may be set up in such a way that consumers can receive subsidies for the renewable hydrogen they use towards their obligations, at least initially.
As well as the subsidies and obligations on the demand side, Jetten also reiterated the government's commitment to provide financial support to renewable hydrogen producers. A €1bn tender for domestic electrolysis projects is to be launched next year, alongside a separate auction for imports with a €300mn budget under Germany's H2Global scheme. This is in addition to support under the Stimulation of Sustainable Energy Production and Climate Transition (SDE++) and Important Projects of European Common Interest (IPCEI) schemes and a €250mn tender for smaller electrolysis projects being launched this year, Jetten said.
The government recently earmarked €7.8bn for renewable hydrogen production as well as transport and storage infrastructure as part of a €28.1bn package to help the country achieve its 2030 climate goals.
When combining different measures it will be important that these do "not lead to double subsidies, excessive profits, market power or price-increasing effects", Jetten said.
Electrolyser targets
The government will aim for 8GW of electrolyser capacity to be installed by 2032 — a less ambitious target than Jetten had hinted at last year. The Netherlands had in 2021 set a target of 3-4GW for 2030, but Jetten repeatedly said that this goal could be doubled after further review.
In his letter to the second chamber, Jetten said the 4GW target for 2030 will stand for now and that it is "already very ambitious". He cautioned that "the timing of the roll-out of offshore wind energy and energy infrastructure is ambitious, which could create tension between a target of 8GW electrolysis capacity in 2032 on the one hand and the desired growth of direct electrification of end users on the other".
