EU approves two Dutch renewable hydrogen measures

Under EU State aid rules, the European Commission has approved a €998 million Dutch scheme to support the production of renewable hydrogen, as well as an €80 million measure to support Djewels, a subsidiary of the hydrogen company HyCC, in the demonstration of a renewable hydrogen production technology.

Both measures aim to contribute to the development of renewable hydrogen in line with the objectives of the EU Hydrogen Strategy and the European Green Deal.

The €998 million scheme will support the construction of at least 200 MW of electrolysis capacity, and the aid will be awarded through a bidding process planned to be concluded in 2024. The tender will be open to projects with a capacity of at least 0.5 MW.

The aid will take the form of a direct grant combining an upfront investment grant of up to 80% of the investment costs and a variable premium over a period of 5 to 10 years. Beneficiaries will have to prove compliance with EU criteria for the production of renewable fuels of non-biological origin (RFNBOs).

According to the Commission, the scheme will contribute to the Netherlands’ efforts to achieve 500 MW of electrolyzer capacity in 2025 and 3-4 GW by 2030. Furthermore, it will support the EU’s ambitions to install at least 6 GW of renewable hydrogen electrolyzers by 2024, and at least 40 GW by 2030.

Margrethe Vestager, Executive Vice-President in charge of competition policy, stated: “Developing renewable hydrogen production is a key aspect of EU’s climate neutrality goal. This €998 million Dutch scheme will help scaling up the production of renewable hydrogen in the Netherlands by providing support to electrolysers projects of all size, while ensuring that any potential competition distortions are kept to the minimum.”

As for the €80 million Dutch measure, the project supported under it aims to demonstrate the feasibility of producing renewable hydrogen with an alkaline electrolyzer with high current density electrodes, high-pressure hydrogen output and a small spatial footprint. The electrolyzer will have a capacity of 20 MW.

The beneficiary of this measure, Djewels, will own and operate the hydrogen production facility, and the aid will take the form of a direct grant of €80 million, covering the expected funding gap of the project.

Commenting on the grant, the Commission said: “As the actual funding gap of the project will depend on market developments, the measure foresees that, if the project turns out to be very successful, generating extra net revenues, the beneficiary will return to the Netherlands part of these extra revenues. Moreover, the beneficiary will disseminate the technical know-how gained as a result of the project.”

The construction of the electrolyzer is expected to start in 2024, with the project expected to be operational as of 2027.

To note, the measures follow the previous Dutch scheme approved by the Commission in July 2023, which aimed to support specifically small-scale electrolyzers.