The European Commission has officially approved a €998 million Dutch scheme designed to support the production of renewable hydrogen, in accordance with EU State aid regulations. This significant measure is intended to advance the development of renewable hydrogen, aligning with the goals set out in the EU Hydrogen Strategy and the European Green Deal.

Additionally, the scheme is expected to further the objectives of the REPowerEU Plan, which focuses on decreasing reliance on Russian fossil fuels and accelerating the transition to green energy.

The Dutch scheme

The Netherlands notified the Commission of its intention to introduce a €998 million scheme to increase the country's electrolysis capacity and support the production of renewable hydrogen.

The scheme will support the construction of at least 200 MW of electrolysis capacity. The aid will be awarded through a competitive 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 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), as set out in the delegated acts on renewable hydrogen.

The scheme will contribute to the Netherlands's efforts to achieve 500 MW of electrolyser capacity in 2025 and 3-4 GW by 2030. It will also support the EU's ambitions to install at least 6 GW of renewable hydrogen electrolysers by 2024, and at least 40 GW by 2030. The Netherlands expects that the scheme will lead to the equivalent of around 55 kilotons of CO₂ being avoided every year until 2030, which will contribute to the Netherlands' and EU's climate targets.

EU assessment

The European Commission has evaluated the Dutch scheme under EU State aid regulations, specifically Article 107(3)(c) of the Treaty on the Functioning of the EU and the 2022 Guidelines on State aid for climate, environmental protection, and energy (‘CEEAG’).

Key findings from the Commission's assessment include:

• The scheme is deemed necessary and appropriate for advancing the production of renewable hydrogen. It aligns with major EU policy initiatives such as the European Green Deal, the EU Hydrogen Strategy, and the REPowerEU Plan.
• The aid has an ‘incentive effect,’ meaning that without public support, the beneficiaries would not undertake the necessary investments.
• The Netherlands has implemented adequate safeguards to minimize competition and trade distortions within the EU. Beneficiaries will be chosen through an open, transparent, and non-discriminatory bidding process, and aid will be limited to the minimum required for project implementation.
• The positive effects of the scheme are expected to outweigh any potential negative impacts on competition.

Based on these factors, the Commission has approved the Dutch scheme under EU State aid rules.