Green gas expert Ruud Paap: government takes important step in making Dutch energy system more sustainable
Opinion by one of our experts, on his area of expertise
Lead: Publication Dutch governmental initiative for a resilient energy syst’em and a future-proof industry
By publishing their latest regulation ‘Package for Green Growth’ announced last Friday Dutch government is taking a part of our energy system which had been neglected until now, seriously: green molecules. The green gas blending obligation announced in the parliamentary letter will ensure that a lot more green gas will be produced in the Netherlands. This is necessary because renewable electricity alone will not suffice. The measure is an important step in making the Dutch energy system more sustainable.
We are in a transition period where daily realities that used to be taken for granted are no longer so. For example, our energy system which in the Netherlands used to be a fossil and centrally organised system with a main role for natural gas, oil and coal (molecules). Today we are moving towards a renewable and decentralised system with a leading role for electricity. With electricity, we can fill many functions in our energy system but not everything. Molecules remain necessary for certain applications; for instance as raw materials, for high-temperature applications and to make transport fuels for international and heavy transport. Applications for which electricity is not (yet) sufficient.
Towards many more green molecules
For those applications, we now prefer to use green molecules rather than fossil ones. If we then look at gaseous molecules, we have a choice of green gas and green hydrogen. If we want to replace the current natural gas consumption in our country with green molecules, we need almost 30,000 MW (MegaWatt) of production capacity. In 2024, we had only 440 MW of production capacity in the Netherlands for green gas and 5 MW for green hydrogen. That is not nearly enough to replace natural gas.
So we need more green molecules. Green gases come from bio-resources and these are scarce, green hydrogen requires green electricity and that is also scarce. So both green molecules have their challenges but here I will focus on green gas. Since 2008, the production of green gas has been encouraged through the Sustainable Energy Subsidy Scheme (SDE). Thanks to this scheme, green gas production has grown up to 440 MW in 2024. By 2030, this should be 2,441 MW, as agreed in the Dutch Climate Agreement. If we continue to grow at the current pace, we will not achieve this quantity by far, so an acceleration is necessary.
The acceleration should come through a different way of stimulating production: mandatory addition of green gas into fuel. This has been functioning for transport fuels since 2007 and, with the announcement in the parliamentary regulations of 25 April last, there will also be additional blending obligation for the fuel usage in industry fields of building and construction, agriculture, road transport and other sectors (ETS2). The government imposes this obligation and energy companies supplying natural gas to these industries must start reducing their CO2 emissions by blending green gas into the fuel mix. This will boost the demand for green gas and increase prices as well as the production of green gas. Customers of gas fuels will subsequently pay a slightly higher price but in this way we will fill a good part of the agreed 2,441 MW.
Without blending obligation, there will be holes in our energy system that cannot be solved or can only be solved at very high cost. While paying slightly more for natural gas mixed with green gas also leads to higher costs, these are considerably lower than the costs we have to incur for an energy system without green gas. So with the additional blending obligation, we are taking a big step in the right direction.
