Hydrogen: Cost Price, Imports, Policy

Commissioned by VOTOB (the Association of Dutch Tank Storage Companies), CE Delft has carried out three interrelated studies. The work is highly complementary to The System Study for NLHydrogen.

The main questions addressed in the three components were:

• What are the cost prices of grey, low-carbon (‘blue’) and green hydrogen and hydrogen carriers, for both Dutch production and imports?
• What policies are needed to get hydrogen markets up and running, and what roles can low-carbon hydrogen and imports play in these markets?
• How can demand creation be deployed, and how could this be organised in practice? (For this purpose, the case study ‘steel for the automotive industry’ was elaborated.)

The key conclusions are:

• Hydrogen is an indispensable link in the future energy and feedstock system. Both imports and domestic production are needed. Imports are also important for transit to the hinterland, such as Germany. Imports and low-carbon hydrogen can both contribute to kick-starting hydrogen markets.
• In 2025, grey hydrogen is slightly cheaper than low-carbon hydrogen, but this is changing rapidly, mainly due to rising CO₂ emission prices. Green hydrogen has a significantly higher cost price, with imported green hydrogen having somewhat lower costs than domestic production up to around 2030. If imported green ammonia is used directly as ammonia — without being ‘cracked back’ — its cost price is considerably lower than that of domestically produced green ammonia.
• A coherent and persistent policy package is required to get the markets moving; there is no ‘silver bullet’. Financial incentives on the demand side and CAPEX subsidies for import infrastructure help to establish an import market.
• Demand creation can be a game changer. The case study on steel for the automotive sector shows that it is possible, and how it can be done in practice. The case also illustrates that demand creation requires tailor-made approaches per sector, to match the development of a supply chain and existing industry structures.

Note: The chapter on demand creation is also available as a separate publication in English.