Dutch draft blending obligations to allow biomethane imports from EU countries

The long-awaited Green Gas Blending Obligation Act has been submitted to the lower house of the Dutch parliament, Tweede Kamer, for official reading on May 26.

The new bill, signed by Climate and Green Growth Minister Stientje van Veldhoven, was submitted May 21 and outlines the renewable gas blending obligations that Dutch suppliers must comply with.

The rules require annual reductions in emissions by supplying biomethane into the national gas grid, starting with a 0.63 million metric tons of CO2 chain emission reduction in 2027, before rising to 2.85 MMtCO2 by 2031.

The bill introduces a separate tradable unit -- the Green Gas Unit, or GGE -- to comply with the blending obligation. Suppliers may buy out all or part of their annual obligation, acting as a price ceiling if GGEs become scarce. The buyout price has been set at Eur450/metric tons of CO2 equivalent.

The GGE is derived from the already existing Guarantee of Origin. It represents a certain amount of CO2 equivalent reductions in chain emissions. Suppliers can create, buy, sell, save and surrender GGEs to meet their annual obligation.

The Dutch Emission Authority, or Nederlandse Emissieautoriteit (NEa), the proposed implementing and supervisory body, will inform energy suppliers annually of the number of GGEs required to comply with the obligation.

The draft law also allows imports of green gas from other EU member states, provided the imported green gas meets the same sustainability and verification requirements as domestic green gas.

"In the longer term, it is clear that the Netherlands will not be able to produce enough green gas to meet its own needs," the legislative proposal said. "It is therefore also necessary to work on robust import chains, whereby green gas from other European countries, together with the scaling up of green gas production in the Netherlands, can contribute to the transition of the Dutch economy."

This comes following earlier pushback from the European Commission in 2024. In a detailed, reasoned opinion, the Commission held that an earlier draft of the law, which prioritized domestic Dutch production, was contrary to Article 34 of the Treaty on the Functioning of the European Union (TFEU). Article 34 prohibits quantitative import restrictions and all measures having an equivalent effect to ensure the free movement of goods within the bloc.

Compliance

The government also proposed annual reporting timelines to be submitted to the NEa starting in 2027.

The obligation must be calculated and submitted to the NEa no later than June 1; by July 1 at the latest, the parties must indicate whether they wish to exercise the buyout option. By Aug. 1, the NEa will write off the number of GGEs required to meet the blending obligation of the preceding calendar year.

Following this process, by April 30, 2028, reports must be submitted to the NEa outlining the total amount of gas delivered and supplied in 2027. By June 1, 2028, the NEa will then inform suppliers about the market share and obligations for the previous year.

"The amount of gas from renewable sources that must be supplied will be determined based on the energy supplier's market share," the Dutch government said.

The legislation will also allow suppliers to carry over up to 10% of the total obligation into the next calendar year after this has been written off, promoting stable price formation.

Avoided methane emissions are included in the calculation rules, in line with the Renewable Energy Directive. This would particularly favor manure feedstocks, as they can potentially lead to a significant reduction in methane and ammonia emissions.

"Because the focus is on CO2 chain emission reduction rather than on the volume of green gas, it is expected that manure digestion will be used more frequently," the government said in its proposed legislation.

Platts, part of S&P Global Energy, last assessed spot Dutch unsubsidized, certified manure Guarantees of Origin at Eur135.925/megawatt-hour on May 21.

Following official reading in parliament on May 26, the bill will be debated in a formal open session during a procedural meeting on June 2.