EU Approves €998 Million Dutch Scheme To Boost Renewable Hydrogen Production

The European Commission has approved a significant €998 million Dutch scheme designed to enhance renewable hydrogen production, marking a key step in the EU’s efforts to achieve its climate goals and energy security objectives. This measure, aligned with the EU Hydrogen Strategy and the European Green Deal, will also support the REPowerEU Plan’s aim to reduce reliance on Russian fossil fuels and accelerate the green transition.

Under the approved scheme, the Netherlands will increase its electrolysis capacity with the construction of at least 200 MW of new facilities. The aid will be distributed through a competitive bidding process set to conclude in 2024, open to projects with a minimum capacity of 0.5 MW. The financial support includes up to 80% of investment costs as an upfront grant, along with a variable premium over a period of 5 to 10 years. Beneficiaries must comply with EU standards for renewable fuels of non-biological origin (RFNBOs), as detailed in the delegated acts on renewable hydrogen.

This scheme supports the Netherlands’ goals of achieving 500 MW of electrolyser capacity by 2025 and expanding to 3-4 GW by 2030. It aligns with the EU’s broader ambitions to install at least 6 GW of renewable hydrogen electrolysers by 2024 and 40 GW by 2030. The initiative is expected to prevent approximately 55 kilotons of CO2 emissions annually until 2030, aiding both national and EU climate targets.

The Commission’s assessment, conducted under EU State aid rules and the 2022 Guidelines on State Aid for Climate, Environmental Protection, and Energy (CEEAG), determined that the scheme is essential for advancing renewable hydrogen production. It has been found to support EU policy objectives effectively, provide necessary incentives, and include safeguards to limit competition distortions.

Margrethe Vestager, Executive Vice-President for Competition Policy, emphasized the importance of the scheme: “Developing renewable hydrogen production is a key aspect of the EU’s climate neutrality goal. This €998 million Dutch scheme will help scale up hydrogen production in the Netherlands, supporting electrolysis projects while minimizing potential competition distortions.”

This initiative follows a smaller Dutch scheme approved in July 2023, targeting small-scale electrolysers. The updated 2023 Renewable Energy Directive and the EU Hydrogen Strategy underline the commitment to increasing renewable energy and hydrogen use, crucial for meeting the EU’s ambitious climate and energy targets.

The non-confidential version of the decision will be available in the State aid register on the Commission’s Competition website under case number SA.110068, following the resolution of any confidentiality issues.