Dutch Government Budget Confirms Course for Hydrogen, but Lacks Urgency

The Dutch government presented its official budget proposal on the 15th of September. Hydrogen gets due attention and its structural importance for the Dutch economy is recognised through the allocation of funds for various critical elements. However, while the course is clear, a lack of urgency is evident. As stressed  by NLHydrogen, the national hydrogen industry association, the deployment of many resources is pushed back to post-2030. This is unfortunate, as keeping momentum is crucial now, to ensure that projects can proceed to realisation and the fledgling hydrogen ecosystem gets the backing needed to mature.

Role of hydrogen

The updated National Energy System Plan (Dutch abbreviation is NPE) was also published on the 15th. The NPE focuses on the creation of a climate-neutral and affordable energy system for the Netherlands by 2050 and confers a central role to hydrogen in the pursuance of this goal. The updated version has revised the envisioned size of the hydrogen economy downwards compared to earlier scenarios, but hydrogen remains essential for power-intensive industry and mobility, including aviation and shipping. H2A sides with the position of NLHydrogen that while the continued inclusion of hydrogen as a pillar of the energy system of the future, the base scenario leans too heavily on a smaller hydrogen market, while other scenarios show that a significantly larger hydrogen market development is well within reason.

Lack of resources for realisation import infrastructure

The NPE acknowledges that hydrogen imports will be critical for the flourishing of the hydrogen economy. Sea ports are assigned an important role for import, storage and distribution to the European hinterland. H2A values the inclusion of the import sector and the value that it can bring to the Netherlands, its neighbouring countries and Europe as a whole. However, there is a remarkable lack of (financial) instruments for the realisation of the import infrastructure. Steps are defined to bolster the demand side, through annual mandated demand for industry and long-term mandates after 2030, amongst others, but without the dedicated import infrastructure, supply will struggle to keep with this demand. H2A therefore strongly and urgently advocates for dedicated instruments to enable the first import projects, to ensure that the Netherlands has the infrastructure in place to receive multiple hydrogen vectors by 2030. This will safeguard the position of the Netherlands as the gateway to Europe.

Urgency and smart allocation of resources are key

It is encouraging to see that the contribution hydrogen can make to the Dutch energy system and its wider economic and strategic interests is explicitly accepted. However, H2A pleads for a higher sense of urgency to keep momentum and to deliver infrastructure in time. With a larger hydrogen economy eminently plausible and achievable, the potential is clearly present to increase this positive contribution of hydrogen. The smart allocation of resources is key in this regard. The import sector can supply hydrogen at a scale that vastly exceeds the domestic production capacity. A thriving import sector will make hydrogen more affordable and allows for wider adoption. This potential is an opportunity that must not go to waste and H2A calls upon the Dutch government to address this gap in its current hydrogen plans.

photo credits: De ondernemer