The European Commission has approved a €998m Dutch scheme to support the production of renewable hydrogen.
The measure comes under EU State aid rules and aims to contribute to the development of renewable hydrogen in line with the objectives of the EU Hydrogen Strategy and the European Green Deal.
The scheme will also contribute to the objectives of the REPowerEU Plan to reduce dependence on Russian fossil fuels and accelerate the green transition.
The Dutch project will support the construction of at least 200MW of electrolysis capacity and 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 0.5MW.
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 five to 10 years. Beneficiaries will have to prove compliance with EU criteria for the production of renewable fuels of non-biological origin, as set out in the delegated acts on renewable hydrogen.
The scheme will contribute to the Netherlands’s efforts to achieve 500MW of electrolyser capacity in 2025 and 3GW-4GW by 2030.
It will also support the EU’s ambitions to install at least 6GW of renewable hydrogen electrolysers by 2024, and at least 40GW by 2030.
The Netherlands expects the scheme will lead to the equivalent of around 55 kilotons of CO2 being avoided every year until 2030, which will contribute to the country’s and EU’s climate targets.
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(c) the Treaty on the Functioning of the EU, which enables Member States to support the development of certain economic activities under certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy.
In particular, the Commission found the scheme is necessary and appropriate to facilitate the production of renewable hydrogen. At the same time, it supports the objectives of key EU policy initiatives such as the European Green Deal, the EU Hydrogen Strategy, and the REPowerEU Plan.
The measure has an ‘incentive effect’, as the beneficiaries would not carry out the relevant investments without the public support.
The Netherlands put in place sufficient safeguards to ensure the scheme has a limited impact on competition and trade within the EU. In particular, the beneficiaries will be selected following an open, transparent and non-discriminatory bidding process and the aid will be kept to the minimum necessary to undertake the projects.
The aid will bring about positive effects that outweigh any possible negative effects in terms of distortions to competition.
On this basis, the Commission approved the Dutch scheme under EU State aid rules.
This scheme follows a previous Dutch scheme approved by the Commission in July 2023, which aimed to support specifically small-scale electrolysers (with a capacity of up to 50MW).
“Developing renewable hydrogen production is a key aspect of EU’s climate neutrality goal,” said executive vice president in charge of competition policy Margrethe Vestager.
“This €998m Dutch scheme will help scaling up the production of renewable hydrogen in the Netherlands by providing support to electrolysers projects of all sizes, while ensuring that any potential competition distortions are kept to the minimum.”