The Netherlands has approved €2.1 billion ($2.4 billion) in funding to boost its hydrogen production and decided to ease renewable hydrogen usage quotas for industry.

The so-called Green Growth package proposed by climate and green growth minister Sophie Hermans was cleared by the government on Friday. Among several other measures, it confirms the funds to be available at upcoming production tenders, plus €662 million to be allocated to demand subsidies for industrial applications.

Citing “vulnerability to geopolitical developments,” Hermans says in a letter to parliament that the government has opted for a “relatively low mandatory use of renewable hydrogen of 4% [by 2030], so that the obligation is easier to bear for buyers.”

The revised mandate contrasts with the 42% target set under the EU’s Renewable Energy Directive by 2030. By 2035, the share of renewable hydrogen uptake in industry should rise to 60%, Kallanish notes.

However, Hermans says the development of the hydrogen market “is not going as smoothly as we had thought.” Yet, she adds hydrogen is “a market where the Netherlands still has good credentials to play a leading role.”

“In addition, the refining route for green hydrogen is being adjusted so that it becomes more attractive to use green hydrogen in the production of fuels,” she adds, noting the measure should “create a willingness” to invest in new electrolysers.

The country has previously set an electrolysis capacity target of 4 gigawatts by 2030. However, a report by government agency PBL warned last year that the installed capacity would more likely be at 1.2-1.5 GW in 2030. It also cut its forecast for renewable hydrogen consumption by industry by more than half to around 100,000-125,000 tonnes/year.

Hermans says that at a time when “global, geopolitical developments are currently hitting the industry so hard,” the government wants to show that “the cries for help from the industry have been well heard and that the sustainable industry has a future in the Netherlands.”

According to Dutch bank Radobank Group, the Netherlands is Europe’s second-largest grey hydrogen user with a 1.3 million t/y consumption. It estimates that to replace existing grey hydrogen consumption with renewable H2, 15 GW of electrolysis capacity would be needed.