Review of hydrogen policy developments

By 2030, the EU will have a 42% member state requirement for the use of green hydrogen in industry. This is a challenging target for the Netherlands, which is the second largest hydrogen user in the EU after Germany. To partially meet this target and to stimulate the development of the green hydrogen market, the Ministry of Economic Affairs and Climate Policy (Ministerie van Economische Zaken en Klimaat) has formulated an off-take obligation with a gradual growth path for the industry.

CE Delft was asked to conduct a review of this. Our main conclusion is that in the baseline scenario of our analyses, including a base case of current industrial hydrogen use of 70 PJ per year and a conservative uneconomic top of green hydrogen, the gradual growth path to a 24% off-take obligation in 2030 is not met. However, in conjunction with other assumptions on costs and base, such as due to ammonia imports, the gradual growth path is feasible based on quantitative analyses of subsidy budgets and uneconomic peaks. For this to actually happen, Financial Investment Decisions (FIDs) must now be made at a rapid pace, which requires sufficient market confidence. We think the government can play an active role in this by making customised agreements and chain agreements with market participants.