Dutch hydrogen support scheme gets EU green light

The European Commission has approved Dutch state aid for renewable hydrogen production. The country will allocate 998 million euros for this purpose.

The European Commission announced on its website that it had approved Dutch state aid for hydrogen production. The measure aims to accelerate the development of renewable hydrogen, and the scheme is in line with the objectives of the EU Hydrogen Strategy and the European Green Deal, according to the Commission.

The Netherlands plans to use the approved funding to increase the country’s electrolyser capacity and generally strengthen its position as a producer of renewable hydrogen. The support scheme will specifically focus on building at least 200 MW of electrolyser capacity, with aid awarded through a tender for plants with a minimum capacity of 0.5 MW. The first tender is expected to be launched as early as 2024. Support will then be provided as a combined grant, covering up to 80% of initial investment costs, and a variable premium for 5 to 10 years. To qualify for support, projects must meet EU criteria for the production of renewable fuels of non-biological origin (RFNBOs).

The Netherlands aims to have 500 MW of operational hydrogen capacity by 2025, with capacity reaching 3-4 GW by 2030. This should prevent an additional 55 kilotonnes of CO2 emissions from being released each year. The new support scheme follows an earlier Dutch initiative approved by the Commission in July 2023, which focused on small electrolysers (with a capacity of up to 50 MW).

Under EU rules, each state aid scheme (with certain exceptions) must be approved under EU state aid rules. Support must have an incentive effect, be necessary and proportionate, and be awarded through a competitive process. Its positive effects must outweigh any potential negative impacts. The Commission found that the Netherlands met the conditions for approval in all these respects.

The EU Hydrogen Strategy, published in July 2020, set ambitious targets for clean hydrogen production and launched the European Clean Hydrogen Alliance. The European Green Deal, established in 2019, aims to achieve net-zero greenhouse gas emissions by 2050, with an interim target of reducing emissions by at least 55% by 2030.