SDE++: Low-carbon production

Electrolytic hydrogen production

Hydrogen is still usually made from natural gas because of its lower costs. However, hydrogen can also be made by using electrolysis and renewable electricity, or by turning waste into gas. This helps reduce CO₂ emissions. You can apply for a subsidy for your electrolyser if the hydrogen production capacity is at least 500 kW.

For electrolytic hydrogen production you can apply in 3 categories:

Carbon Capture and Storage (CCS)

Carbon Capture and Storage (CCS) is a temporary solution to reduce CO₂ emissions. It is intended for companies that cannot become fully carbon neutral quickly, for example because of technical or financial reasons.

The CO₂ you capture is stored in empty gas fields under the sea. You are responsible for capturing and purifying the CO₂ yourself. You may also store the CO₂ outside the Netherlands, in another European Union Member State or in a country of the European Free Trade Association (Iceland, Liechtenstein or Norway).

Large transport pipelines are needed

To make sure there is enough CO₂ storage capacity in the future, large transport pipelines must be built now. During the first years, these pipelines will not be used intensively. As a result, CO₂ transport costs will be higher than for existing pipelines.

You can apply under the existing categories if you:

• transport liquid CO₂;
• use a transport pipeline on or under the seabed with a transport capacity of more than 20 million tonnes of CO₂; and
• have contracted no more than 35% of the liquid CO₂ transport capacity.

If you do not meet these conditions, you can apply under the new categories, which have a lower base amount.

Your Transport and Storage Declaration, which you submit with your application, must state which transport route you will use.

Market value of CO₂ included in the correction amount

CCS has several subcategories. This allows the correction amount to better match your situation.

The correction amount includes the market value of the captured CO₂.

Negative emissions from biomass

Capturing and storing CO₂ released during the combustion, digestion or gasification of biomass creates what are called negative emissions. Negative emissions mean that you remove more CO₂ from the atmosphere than you emit.

In the long term, negative emissions are needed to offset emissions that are difficult to avoid.

To qualify for negative emissions, you must prove that the biomass you use is sustainable. The biomass must meet the sustainability requirements of the European Renewable Energy Directive (RED). For more information, see RED sustainability requirements for biomass under the SDE++ scheme.

The correction amounts for the different technologies are currently set at zero. Because these amounts are expected to change in the future, separate subcategories have been created for CO₂ capture from:

• waste incineration plants;
• biomass combustion plants or direct air capture; and
• biogenic process emissions, for example from a biogas production plant.

Separate subcategories for fossil fuel emissions

If the emissions originate from fossil fuels, you can apply in the following categories:

• Installations at companies under the ETS
• Installations at companies not under the ETS

Combining CCS with CO₂ Capture and Use in Greenhouses (CCU)

Do you use one CO₂ capture installation for both Carbon Capture and Storage (CCS) and Carbon Capture and Use (CCU)? If so, you can apply for a subsidy for a combination of CCS and CCU.

Because of how the Netherlands Environmental Assessment Agency (PBL) calculates the base amount, not all combinations are allowed. This prevents you from receiving too much subsidy.

You can combine CCS and CCU if:

• you apply for both in the same application round; or
• you already received a CCU subsidy in an earlier application round.

Combining existing CCS subsidies in one capture installation

Do you already have more than one CCS subsidy from earlier application rounds? If so, you can combine these subsidies in one CO₂ capture installation.

Because the Netherlands Environmental Assessment Agency (PBL) calculates the base amount in a specific way, not all CCS combinations are eligible. This ensures that projects do not receive excessive subsidies.

You may only combine subsidies within the CCS categories. The combined project must use one new CO₂ capture installation with 8,000 full-load hours.

You receive the subsidy each year. If you combine more than one subsidy, payments are made in the order in which the subsidies were awarded. This means you first receive payments from the oldest subsidy, followed by the newer subsidies.

You must send us your environmental permit within 3 years

Because CCS projects are large, special deadlines apply. You must place the order for your project within 3 years after receiving the subsidy. Your installation must also be operational within 6 years.

To show that your project is progressing as planned, you must send us your full environmental permit within 3 years after the subsidy is awarded. This applies to the new parts of the project, such as the CO₂ capture installation, the purification installation and, in some cases, the liquefaction installation.

If you already have these permits when you apply for the subsidy, you must include them with your application.

If you do not meet these deadlines, we may withdraw your subsidy and claim the bank guarantee.

An independent measurement company verifies your production

You must register your installation with an approved measurement company. Every month, this company sends us the measured production data.

After each calendar year, you must submit an annual statement showing that the captured CO₂ has actually been stored.

Carbon Capture and Utilisation in greenhouse horticulture (CCU)

You can also receive a subsidy if your captured CO₂ is used by the greenhouse horticulture sector in the Netherlands. Because the emission factor is based on avoiding so-called summer heating, only CO₂ used in greenhouse horticulture is eligible for a subsidy.

In your feasibility study, you must explain how you will supply the captured CO₂ to greenhouse growers. The CCU table shows the different situations.

It is now also possible to apply for a CCU subsidy for large biomass combustion plants. This applies to plants with a thermal input of 50 MWth or more and an electrical capacity of up to and including 100 MW.

If your biomass combustion plant has a thermal input of 7.5 MW or more, the biomass you use must meet the sustainability requirements of the European Renewable Energy Directive (RED). See RED sustainability requirements for biomass under the SDE++ scheme.

You can combine CCU with CCS

Do you use one CO₂ capture installation for both Carbon Capture and Storage (CCS) and Carbon Capture and Use (CCU)? If so, you can apply for a subsidy for a combination of CCS and CCU.

Because of the way the Netherlands Environmental Assessment Agency (PBL) calculates the base amount, not all CCS and CCU combinations are allowed. This prevents you from receiving too much subsidy.

You must send us your environmental permit within 3 years

Because CCS projects are large, special deadlines apply. You must place the order for your project within 3 years after receiving the subsidy. Your installation must also be operational within 6 years.

To show that your project is progressing as planned, you must send us your full environmental permit within 3 years after the subsidy is awarded. This applies to the new parts of the project, such as the CO₂ capture installation, the purification installation and, in some cases, the liquefaction installation.

If you already have these permits when you apply for the subsidy, you must include them with your application.

If you do not meet these deadlines, we may withdraw your subsidy and claim the bank guarantee.

An independent measurement company verifies your production

You must register your installation with an approved measurement company. Every month, this company sends us the measured production data.

After each calendar year, you must submit an annual statement showing that the captured CO₂ was actually supplied to the greenhouse horticulture sector.

Advanced renewable fuels

The Dutch Climate Agreement includes measures to encourage the production of advanced renewable transport fuels. For this purpose, a production cap of 10.6 billion kWh has been set.

The correction amount for these categories is based on the average market price of the fuel plus the average value of Emission Reduction Units (ERUs). The Netherlands Environmental Assessment Agency (PBL) determines both values each year.

ERUs are certificates that you receive for supplying renewable energy to electric vehicles.

You only receive a subsidy for the fuel you produce if you can show that it was used in the Netherlands for road transport or inland waterway transport.

There are 2 subcategories:

• biomethanol from solid lignocellulosic biomass
• bio-LNG from mixed anaerobic digestion.

Approved biomass

For biomethanol, you may only use biomass that meets the requirements of Annex IX, Part A of the Renewable Energy Directive.

For fermentation, the current SDE++ definitions and rules for input materials used in mixed-feedstock fermentation apply.

An independent measurement company verifies your production

You must register your installation with an approved measurement company. Every month, this company sends us the measured production data.

After each calendar year, you must submit an annual statement showing that you supplied the fuel you produced to the Dutch market. You must also show that the fuel was used for road transport or inland waterway transport. You must use information from the Dutch Emissions Authority (NEa) register for this.

Download a table with tariffs for your installation

Would you like to know the amounts that apply to the category you are interested in? Download the table Tariffs Low-carbon production SDE++.

Download a table with documents you need

Would you like to know which attachments you need to include with your application? Download the table Attachments SDE Low-carbon production.