Dutch outline clean hydrogen ‘vision’, aim at global market

Dutch King Willem-Alexander wears VR glasses at the opening of the green hydrogen installation Hystock from Gasunie in Veendam, the Netherlands, 26 June 2019. In the hydrogen installation, sustainable (solar) energy and green electricity from the grid are used to convert water into hydrogen and oxygen. [EPA-EFE/PATRICK VAN KATWIJK]

The Netherlands want to use their “unique starting position” in the gas value chain to become world leaders in the production and use of green hydrogen, saying the fuel “can become a globally traded commodity”.

The government’s hydrogen strategy was officially unveiled on Monday (30 March), with a letter presented to the Dutch Parliament.

“Commitment to sustainable hydrogen in the Netherlands creates new jobs, better air quality and is essential for the energy transition,” says Eric Wiebes, the Dutch minister for economics and climate who penned the letter.

Officially titled “Government’s vision on hydrogen”, the letter is the first step in a series of initiatives to realise the country’s hydrogen ambitions, which were earlier announced in their national climate agreement and hydrogen roadmap.

European industry association Hydrogen Europe welcomed the announcement, telling EURACTIV it was “very pleased to see the strong commitment and leadership shown by the Netherlands”.

The Dutch industry organisation for commercial energy users (VEMW) was slightly less impressed, stating that the vision is “ambitious, realistic and practical”, but “lacks clarity when it comes to market regulation”.

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Energy transition

Although the Dutch primarily aim to decarbonise their energy system using renewable electricity and heat, “these are limited by what technology, system costs and space allow for,” the document states.

Gas is therefore expected to still account for “30-50% of final energy use in 2050,” although in decarbonised form, Wiebes says in the letter.

But according to the Dutch minister, biogas alone won’t be available in sufficient quantities to meet the country’s demand, meaning other sources of clean gas need to be found.

This is where hydrogen comes into play. “CO2-free hydrogen” produced from renewable power or gas with carbon capture and storage (CCS) is seen as a scalable energy carrier for end-use sectors which cannot technically or cost-effectively be electrified – such as steel, cement, chemicals and heavy-duty transport.

Furthermore, hydrogen “can easily be stored for longer periods,” is “relatively cheap to transport” and “contributes to better air quality,” the letter says.

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Hydrogen trade

In his letter, Wiebes repeatedly underlines the “unique starting position” of the Netherlands, referring to the country’s experience in “safely and responsibly” handling hydrogen, its extensive gas network, and its geographical location at the heart of Europe’s industrial north.

“Sustainable hydrogen can become a worldwide traded commodity,” the letter says enthusiastically, revealing the Netherlands’ outsized ambitions for the tiny molecule.

Hydrogen is also seen as a strategic component of the broader Dutch industrial strategy. It can help export the country’s “knowledge and skills”, as well as “explicitly profiling the attractiveness of the Netherlands for companies in the hydrogen value chain,” Wiebes says.

The gas could be imported from regions with potential to produce large quantities of green hydrogen from electrolysis using solar power, such as the Middle East, North Africa, Portugal or Spain.

Demand, on the other hand, is mainly expected to come from “industries in North-Western Europe” such as Germany, with whom infrastructure “connections” should “receive particular attention”.

The country’s harbours, notably the Port of Rotterdam, are seen as a strategic asset for the Netherlands to fulfil such a “hub function”, in which the Dutch would import, transport and export hydrogen between supply and demand hotspots.

Scaling up

Harbours and industrial clusters are also mentioned as areas where hydrogen production and use could initially be concentrated, especially in the early stages of development.

But the Dutch have bigger ambitions and are aiming for the world market. “A large scale up of green hydrogen production in an international context” is necessary to sufficiently reduce costs, the minister explains. Scaling up both supply and demand should “ideally happen more or less simultaneously” the letter adds.

That vision is fully endorsed by Hydrogen Europe, which cites simultaneous demand and supply measures as two important “policy levers” to reduce costs and accelerate the adoption of hydrogen as an energy carrier.

To boost demand for green hydrogen, the Netherlands suggest mandating an obligatory mix of hydrogen in gas networks of 2%, which could gradually be increased to 10-20%. Blending obligations are part of a “developing European discussion,” the letter says however.

The Dutch vision also explicitly pushes for a European blending obligation for hydrogen and other synthetic fuels in aviation. If Europe doesn’t share this enthusiasm however, the Netherlands will proceed with a national obligation “leading up to 14%” synthetic fuels in 2030 “and 100% in 2050,” the minister states.

On the supply side, both green hydrogen (produced from renewable electricity) and blue hydrogen (produced from natural gas using Carbon Capture and Storage) will be necessary to achieve scale, the letter continues. Both types of hydrogen production are therefore encouraged to use existing subsidy schemes. Apart from scale-up, innovation is also mentioned as an important component for bringing down costs.

Green hydrogen production in particular will be supported by a new financial instrument of €35 million. The money is supposed to bridge between the “demonstration and roll-out phase” by financially supporting the exploitation of production facilities.

More support is expected at EU level, with the expected listing of hydrogen facilities as “European Projects of Common European Interest” (IPCEI). Dutch minister Eric Wiebes welcomed the EU initiative, saying it will provide an opportunity to loosen state aid rules to further support the sector.

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Gas pipelines for transport

Finally, the distribution of hydrogen through gas pipelines is seen as the cheapest option for transport on land, according to the Dutch, who consider the existing pipeline network as a natural monopoly.

The Dutch government therefore commits to take care of infrastructure aspects, but simultaneously mentions the possibility for “both public and private networks” to co-exist in the future.

The Dutch government also sees a role for regional network operators, saying it contemplates giving them the legal and regulatory “freedom to gain experience in transporting and distributing hydrogen”. Apart from possible “temporary tasks” for regional operators, the letter doesn’t give further details on the topic, however.

European action

Contacted by EURACTIV, Hydrogen Europe said it “fully supports the view that supply, demand, storage and infrastructure have to evolve and develop at the same time”.

However, it added that “due to the complexities of the value chain, no single actor, industry or even country can be expected to achieve this on its own in a reasonable time frame.”

Despite their high ambitions, the Dutch minister acknowledges that an “international strategy” is needed to support the country’s hydrogen strategy.

“In an international context, bigger cost reductions can be realised,” the minister argues, calling on coordinated action at EU level on guarantees of origin and standardisation of definitions, for instance when it comes to green and low-carbon hydrogen.

Although the vision is still to be translated in English, it is clear that the Dutch are addressing a wider public than just their home crowd.

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(Edited by Frédéric Simon)

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