Dutch hydrogen developments

Briefing

The Netherlands aspires to fully transition to sustainable energy sources by 2050. To facilitate this objective, one of the key pillars for the Dutch government is the adoption of green hydrogen for energy storage—also as part of the broader European strategy to enhance energy security and decarbonize industry. Already today, the Dutch industry produces and uses hydrogen on a large scale. Until now, this relates primarily to hydrogen derived from natural gas (so called grey hydrogen), And already now, The Netherlands is the second-largest hydrogen producer in Europe. In the coming years, grey hydrogen is planned to be replaced with cleaner alternatives, including blue hydrogen which is also produced from natural gas, but with the CO2 captured and stored underground and including green hydrogen which is produced via water electrolysis using sustainable energy sources, such as wind and solar power.

Exciting and high-profile initiatives, such as Holland Hydrogen I and the planned national hydrogen backbone connecting hydrogen production facilities with offshore wind farms, showcase the Dutch commitment to making green hydrogen a cornerstone of the energy transition. However, we also note that the rollout of major green hydrogen production installations is still at an early stage. Against this background, the Dutch national target of 4 GW of electrolysis capacity by 2030, with an aspiration to reach 8 GW by 2032 is a challenge to reach.

Evolving national legislation

The current Dutch regulatory landscape does not fully regulate the construction and operation of hydrogen transport networks, prompting policymakers to propose dedicated legal frameworks. In June 2024, the Energy Act (Energiewet) was adopted, which forms now the legal foundation for the energy transition and replace both the Electricity Act 1998 and the Gas Act. The act however only references hydrogen and does not provide a respedtive regulation. At the end of 2024, the Dutch Senate adopted the new Energy Act. This act merges the Electricity Act 1998 with the Gas Act and replaces them. The new act will enter into force on 1 January 2026.

The government for now does support market development through, for example, production subsidies and by financing offshore hydrogen demonstration projects. Gasunie, as the national hydrogen network operator, publicly reported it will develop an offshore hydrogen network and manage storage and terminals. At the same time, the Dutch regulator Authority for Consumers & Markets (ACM) prepares third-party access guidelines to ensure fair market participation.

SDE++

A key pillar of Dutch support for green hydrogen is the SDE++ subsidy scheme, which has been expanded to include a range of low-carbon technologies including electrolysis. Through SDE++, companies that build and use hydrogen power generation facilities may be eligible to receive subsidies that bridge the gap between the cost of producing hydrogen and its market price. The subsidy scheme for large-scale hydrogen production using an electrolyser is a combination of a subsidy for the investment phase and a subsidy for the operating phase. Given a successfull application, a subsidy for the investment costs for building the facility, and to produce hydrogen using this facility (i.e. the operation phase) is provided. However, the scheme’s allocation process is competitive, with periodic tender rounds that require thorough technical and financial documentation. The SDE++ subsidy scheme is reported to open again in October 2025.

Hydrogen grid network

The Netherlands is actively working on developing a publicly accessible hydrogen transport network, with a goal to connect the Dutch industrial clusters through this public infrastructure by 2030. However, the Netherlands is currently facing serious network congestion challenges on its electricity grid (cf. our insight here). Nonetheless, the Dutch remain committed to the hydrogen transition and keep exploring opportunities to accommodate frontrunners in the field. This is evidenced for example by a hydrogen project of Shell, Holland Hydrogen I, that was reportedly granted access to the grid despite the current electricity grid congestion challenges.

In June 2024, it was confirmed that Hynetwork Services (HNS), a Gasunie subsidiary, will develop and manage the national offshore hydrogen grid. HNS was already tasked with developing the national onshore hydrogen grid in mid-2022 and work began in 2023 as a service of general economic interest (SGEI).

Key considerations

Green hydrogen projects often rely on long-term offtake agreements with industrial clients or utilities seeking to decarbonize their processes. These agreements – in general – should also account for grid challenges and technology-specific risks, such as fluctuations in electrolyser efficiency, limiters or the (un)availability of renewable power. In addition, regulatory uncertainties (such as emerging hydrogen network tariffs) should be considered.

In addition, projects at scale typically involve multi-party consortia, combining expertise in financing, renewables, and infrastructure. Ensuring clear governance structures and allocating liability in case of regulatory changes or technical underperformance are key elements of lasting joint ventures.

Outlook

The Netherlands is steadily advancing its green hydrogen ambitions, with major infrastructure projects and supportive policies underway. Developers can expect a more detailed legal framework and clearer grid access regulations in the near future. The rollout of the national hydrogen network in the upcoming years will open new opportunities for cross-border energy cooperation. Our proven experience in the hydrogen industry have shown us that, despite the current grid challenges, the Dutch proactive approach signals a promising outlook for the country’s green hydrogen economy.