Dutch green gas blending mandate faces challenges but government sees 2027 start feasible

The government has responded to scrutiny questions put forward by the upper house of the Dutch parliament on the proposed green gas blending obligation.

The parliamentary committee responsible for the dossier submitted a series of questions to the government Nov. 3, scrutinizing whether the policy was workable and legally robust. The members of the Standing Committee on Economic Affairs and Climate and Green Growth gave the government four weeks to respond.

Dutch Minister for Climate and Green Growth, Stientje van Veldhoven-van der Meer, said that while the timeline for the intended entry into force of this Act was challenging, the cabinet still viewed entry into force by Jan. 1, 2027, as feasible.

Nevertheless, there are questions about whether the law will become operational in January. Final approval of the mandate is likely to be pushed back, "potentially into December, tightening the timeline between approval and the start of compliance," Richard Nan, Head of Bioenergy Trading at CSC Commodities, a division of Marex, told Platts, part of S&P Global Energy.

Nan told Platts that there are now questions about whether the law will become operational in January 2027 or be further delayed.

A biomethane market participant said, "I don't see a lot of consensus on how the Dutch blending will go within the market, as it could be 2028."

"But if they could turn the ERE [regulation] around very quickly to get it done by January the last time, it's possible to do this for 2027."

This lower house of parliament approved the rules in October, when it voted down a proposal to postpone the scheme by one year. Separately, at the start of this year, the Netherlands introduced the ERE regulation, a new system to reduce transport emissions, replacing the previous HBE system, which was based on the share of renewable energy.

"This is still an evolving situation, but from our conversations with the market, participants are confident that the necessary infrastructure will be ready for a January 2027 start and a 2028 redemption deadline for 2027 volumes," Nan said.

The blending mandate would require annual emissions reductions by supplying biomethane into the national gas grid, starting with a 0.63 million metric ton of CO2 chain-emission reduction in 2027 and rising to 2.85 MMtCO2 by 2031. It introduces a separate tradable unit -- the Green Gas Unit, or GGE -- to comply with the rules.

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 €450/mtCO2e.

Platts assesses a variety of biomethane Guarantee of Origin (GO) prices, varying by certification, subsidy and feedstock type. Platts last assessed spot Dutch certified, unsubsidized biomethane manure GOs at €150.20/megawatt-hour Nov. 6.