The Dutch government announced an ambitious plan on Friday to significantly increase its subsidies for green hydrogen production, using energy derived from renewable sources.
The subsidy injection will see an additional 1 billion euros ($1.1 billion) allocated for 2024 and a further 3.9 billion euros for subsequent years.
The Netherlands sets a high bar for its green hydrogen production, aiming to achieve a capacity of at least 4 gigawatts by 2030 and doubling this amount by 2032. The achievement of these goals hinges on the availability of wind power, the robustness of the electricity grid, and the demand for hydrogen from the industrial sector. “We want to significantly increase hydrogen production in the Netherlands, which is indispensable for reaching our CO2 reduction targets”, Climate Minister Rob Jetten stated.
Previously, the Dutch government had earmarked 9 billion euros over the next decade for green hydrogen rollout, as part of a more extensive 35 billion euro fund dedicated to energy transition initiatives. Of this total, 300 million euros will be set aside to stimulate the import of green hydrogen, and potential subsidies for industries transitioning to and utilizing hydrogen are under consideration.
In their drive to achieve a climate-neutral energy system and a sustainable industry, the Netherlands and Europe are setting high stakes in hydrogen technology. This ambitious goal requires a dynamic policy, balancing both the supply and demand of hydrogen. As part of their approach, the government plans to subsidize electrolysis and incentivize the industry to increase their use of renewable hydrogen from 2026, setting aside €9 billion in the Climate Fund for this purpose.
The government’s plans also involve stimulating supply and demand locally. As outlined in the Climate Agreement, the Netherlands will have at least 4 gigawatts of electrolysis capacity (the process of creating green hydrogen) by 2030, aiming for 8 gigawatts by 2032. This goal’s feasibility will depend on offshore wind energy deployment, energy infrastructure expansion, and industrial electricity demand.
Their first step involves increasing the supply of renewable hydrogen using various subsidies, earmarking an additional €1 billion in 2024. In the following years, the government is reserving €3.9 billion for scaling up renewable hydrogen. Meanwhile, the Energy Main Structure Programme will identify suitable locations for hydrogen plants (electrolyzers). In addition, a €300 million subsidy under the H2Global initiative will significantly boost hydrogen imports to Northwest Europe.
Subsidies and obligations will drive hydrogen use in industry and transport. As the government awaits the European Union’s agreement on binding hydrogen targets, it plans to promote increasing renewable hydrogen usage in the industry. The government is also looking to introduce subsidies for hydrogen users to cover the costs of converting installations or using renewable hydrogen.
With significant financial commitments towards the production and use of green hydrogen, the Dutch government is proactively contributing to the battle against climate change.
