Netherlands Green Hydrogen Market Battles with Delayed Subsidy Support and Uncertainties

Entering December 2024, Green Hydrogen prices have continued to rise in the Dutch market, driven by increased government support and growing investments in the sector. Green Hydrogen is becoming a crucial part of decarbonizing energy systems, particularly in industries and sectors like heavy manufacturing and long-haul transport, which are difficult to electrify. However, its production and distribution present both challenges and opportunities, as well as significant socio-economic implications. In this context, the Netherlands has made substantial investments in infrastructure to position itself as a key hub for the import and distribution of Green Hydrogen, aligning with the EU’s broader energy transition objectives.

The Dutch Green Hydrogen market is facing challenges, as new European Union (EU) policies are tightening competition with lower-priced Chinese imports. To support local industries, the European Commission is implementing stricter rules for its hydrogen funding program. The upcoming funding round for Green Hydrogen projects will include criteria aimed at bolstering European electrolyser supply chains. These changes come after concerns that cheap Chinese imports are undercutting European manufacturers, particularly of electrolysers used in hydrogen production. EU climate commissioner Wopke Hoekstra emphasized that the funding scheme could Favor local companies by requiring work to be done within Europe and ensuring stricter cybersecurity measures. While the EU is not seeking to sever ties with China, it plans to address unfair competition where necessary.

Despite these setbacks, Green Hydrogen remains crucial for sectors like heavy industry and transportation, offering a cleaner alternative to fossil fuels. In contrast, Germany continues to prioritize large-scale hydrogen production, a strategy that is crucial for making hydrogen projects more cost-effective.

Meanwhile, a new collaboration between Denmark and the Netherlands seeks to create a major Green Hydrogen cluster in Northwestern Europe. This initiative aims to connect Danish Green Hydrogen production with industrial demand in the Netherlands, while also strengthening the infrastructure and securing the necessary funding to make Green Hydrogen more competitive. Central to this effort is the development of the Hyperlink 1-3 network, linking Denmark, Germany, and the Netherlands, as well as the fast implementation of EU regulations, including RED III, to stimulate Green Hydrogen uptake.

The collaboration has gained momentum with the inclusion of the Scandinavian airline SAS, which is committed to using Green Hydrogen to drive sustainable aviation. Major industry players like Ørsted, RWE, and Toyota are also backing the initiative. The project’s goal is to leverage offshore wind energy in the North Sea to produce hydrogen at a lower cost, positioning it as a key component of Europe’s clean energy transition and climate goals.

According to the ChemAnalyst Database, the price of Green Hydrogen in the Netherlands is expected to experience negative developments in the coming weeks. This decline can be attributed to government decisions to delay subsidies, which threaten the viability of large-scale Green Hydrogen projects. Additionally, a ban on Chinese equipment imports is anticipated to drive up material costs, further putting pressure on the industry. On top of this, the downstream demand for Green Hydrogen has been weaker than expected, which could further exacerbate challenges for the market. These factors combined suggest a tough period ahead for the Dutch Green Hydrogen sector.