Dutch government launches consultation on HWI RFNBO demand-side obligation for industry

Additional reporting by Jake Stones

LONDON (ICIS)–On 31 October 2024, the Dutch government launched for consultation its proposal for an industrial obligation to use renewable fuels of non-biological origin (RFNBO), marking one of the first measures in Europe to encourage the use of renewable hydrogen associated with the renewable energy directive’s (RED III) targets for industrial decarbonisation.

The scheme, renewable hydrogen industry units (HWI), focuses on setting obligations for the use of RFNBO for particular industrial participants, such as those who use more than 0.1kt of hydrogen per year, and broadly aligns with recent guidance from the European Commission.

The exception is that hydrogen use associated with ammonia production does not fall under the obligation under the Dutch scheme.

The HWI scheme awards RED III obligated market participants an HWI credit for each unit of renewable hydrogen, RFNBO, used in industry. The HWI can then be used to reflect a market participant has met its obligation over the year, or the party can trade the HWI with another obligated party that is yet to meet its quota.

To provide a full overview of the proposal’s framework, ICIS has produced the following infographic explainer:

For any further information regarding ICIS hydrogen content, please reach out to jake.stones@icis.com or sebastian.braun@icis.com