Industrial Decarbonization utilizing CCS and Hydrogen in the Netherlands

The Netherlands aims to reduce industrial GHG emissions by 59% by 2030 and reach climate neutrality by 2050. The government employs a 'carrot-and-stick' approach, using a National CO2 Tax as a floor price and the SDE++ subsidy scheme to support low-carbon technologies. CCS is currently prioritized as a cost-effective transition technology, with projects like Porthos nearing final investment decisions. Hydrogen strategy involves a transition from grey to blue and eventually green hydrogen, supported by plans for a national 'hydrogen backbone' utilizing existing gas infrastructure. However, the report notes that current policy is insufficient to enable gigawatt-scale green hydrogen projects, and the SDE++ scheme tends to favor mature technologies over long-term innovation.

• The Netherlands has established a 'carrot-and-stick' policy framework: the National CO2 Tax acts as the 'stick' by penalizing emitters, with prices rising from EUR 30.5/tCO2 in 2021 to EUR 127/tCO2 by 2030; the SDE++ (Stimulation of sustainable energy production and climate transition) acts as the 'carrot' by compensating the additional costs of adopting low-carbon technologies.
• CCS is viewed as a critical transition technology for hard-to-abate sectors, but its role is limited by a subsidy ceiling and a time limit; no new fossil CCS projects can apply for SDE++ subsidies after 2035.
• The SDE++ subsidy scheme is criticized for favoring mature, low-cost technologies like CCS over emerging innovations such as green hydrogen, which are often not competitive within the current framework.
• The Dutch government is developing a 'Hydrogen backbone', a national transport network that will primarily reuse existing natural gas infrastructure to connect industrial clusters, storage, and production sites.
• Blue hydrogen is intended to pave the way for green hydrogen; while not a separate SDE++ category, it is supported when the CCS component is subsidized. A new 2022 SDE++ category for 'Production of hydrogen from residual gases' is expected to support projects like H-vision.
• The Northern Netherlands is emerging as a potential 'Hydrogen Valley' in Europe, with a project pipeline exceeding 50 projects and planned investments of EUR 9 billion by 2030 via public-private partnerships.
• The Porthos CCS project in the Port of Rotterdam, which aims to store 2.5 Mt of CO2 annually in empty gas fields, is a key success of the current policy landscape and expects a final investment decision (FID) in the second half of 2022.
• Tata Steel Netherlands shifted its strategy from CCS to hydrogen-based Direct Reduced Iron (DRI) technology, which significantly increases the national demand for green power and hydrogen, potentially requiring 8 GW of additional offshore wind capacity.
• The Netherlands is pursuing low-carbon hydrogen imports to supplement domestic production, signing letters of intent in 2021 with Chile, Portugal, Namibia, Colombia, UAE, and Uruguay.

APA

Nair, R., Duvoort, M., & van der Spek, R. (2022). Industrial Decarbonization utilizing CCS and Hydrogen in the Netherlands. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2022/10/14153851/industrial-decarbonization-ccs-hydrogen-netherlands.pdf

Chicago

Nair, Rohith, Martijn Duvoort, and Rob van der Spek. Industrial Decarbonization utilizing CCS and Hydrogen in the Netherlands. Clean Air Task Force, 2022. https://cdn.catf.us/wp-content/uploads/2022/10/14153851/industrial-decarbonization-ccs-hydrogen-netherlands.pdf.

Wikipedia

{{cite report |last1=Nair |first1=Rohith |last2=Duvoort |first2=Martijn |last3=van der Spek |first3=Rob |title=Industrial Decarbonization utilizing CCS and Hydrogen in the Netherlands |publisher=Clean Air Task Force |date=16 June 2022 |url=https://cdn.catf.us/wp-content/uploads/2022/10/14153851/industrial-decarbonization-ccs-hydrogen-netherlands.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nair2022industrial, author = {Nair, Rohith and Duvoort, Martijn and van der Spek, Rob}, title = {{Industrial Decarbonization utilizing CCS and Hydrogen in the Netherlands}}, institution = {Clean Air Task Force}, year = {2022}, month = jun, url = {https://cdn.catf.us/wp-content/uploads/2022/10/14153851/industrial-decarbonization-ccs-hydrogen-netherlands.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }