Dutch government establishes renewable gas blending requirement.

The Dutch government has officially presented its bill for a renewable gas blending obligation to parliament. This legislation mandates suppliers to lower a specific amount of greenhouse gas (GHG) emissions each year by providing biomethane to their consumers. It also permits imports from other EU nations.

Under this framework, suppliers are required to submit green gas units — known as groengaseenheid (GGEs) — to a central registry overseen by the Dutch Emissions Authority, with each unit signifying 1 kg of CO2 equivalent emissions saved. Suppliers can fulfill their obligations, which are determined by their market share, by converting renewable gas guarantees of origin (RGGOs) and Proofs of Sustainability (PoS) into GGEs.

For conversion eligibility, the renewable gas must not receive subsidies and must adhere to RED III sustainability and GHG reduction standards, confirmed through EU-recognized certification schemes like ISCC.

A significant aspect of the bill is that renewable gas from other EU member states can contribute to the obligation, including gas added to the interconnected European gas grid, as long as it meets the same criteria as Dutch renewable gas. Compliance can be shown through RGGOs and an accompanying PoS. Foreign Guarantees of Origin (GOs) can be integrated into the Dutch system via the Association of Issuing Bodies hub.

This scheme will be integrated with the Union Database once it becomes operational for biomethane.

The blending mechanism allows suppliers to pay a buyout price for any portion of their annual obligation not fulfilled through renewable gas provision, ensuring a maximum price in case of supply shortages. The suggested buyout price is €450/t, with a potential sliding scale that increases the price as suppliers rely more on this mechanism for compliance.

The proposal allows gas suppliers to carry forward GGEs into the next calendar year, up to a limit of 10% of their total quota, to "prevent unwanted market distortions."

The main goal of the blending obligation is to achieve a reduction in CO2 chain emissions of 2.85 million tons by 2031, estimated to be equivalent to 0.84 billion m³ of production. This target will be accomplished through elevated annual goals, beginning with a reduction of 0.63 million tons of CO2 chain emissions in 2027, which approximates to about 0.16 billion m³ of green gas.

To encourage long-term investments, the obligation will extend until 2035, with specific targets for the years 2031-2035 being adjusted based on the state of green gas production at that time.

The bill is now set to proceed through the Dutch legislative process in Parliament, which will include the formulation of secondary legislation to establish more detailed regulations.