We applied the so-called ‘sieve methodology’ again for the 2025 SDE++ subsidy call in order to establish whether there are cost-effective clean alternative technologies for CCS available for various industrial processes. We added one new clean technology to the list of alternative technologies: Reduced Iron Fuel Technology (RIFT).
A key difference with last year’s study is that the calculation method of the subsidy intensity in the ‘Non-profitable Top Model’ (OTM) of the Dutch environmental assessment agency (PBL), on which our method is based, was changed. Because of this, the subsidy intensities of CCS technologies and clean alternative technologies are now better comparable than in earlier versions of this model. This is reflected in our results, as the cost effectiveness of several clean alternative technologies is now closer to that of CCS than found by our earlier sieve methodology studies.
We conclude that for several industrial processes there are clean alternative technologies available. But especially for the production of hydrogen, the clean alternative (green hydrogen) is still very costly. Because of particularities of the SDE scheme, it is therefore not possible yet to exclude a SDE++ category for CCS from subsidy for 2025. As long as the costs for the production of green hydrogen will remain high, this situation will not change. Therefore, it would be good to assess whether for next year’s call, the method could be adjusted and, for instance, specific production routes within a CCS category could be excluded after all.