SDE++ scheme open from 28 June

This year's Sustainable Energy Production and Climate Transition Incentive Scheme (SDE++) for this year has opened from 28 June. The opening budget - the maximum amount for which subsidy applications can be approved - is 13 billion euros. The budget is substantially higher than previous years. This is partly due to the high CO2 price and the extra budget announced by the previous cabinet on Budget Day. A number of new categories have also been opened up, including hydrogen linked to a wind or solar farm.

SDE++ is a scheme that encourages the production of sustainable energy and a reduction in CO2 emissions among companies and non-profit organisations. The scheme is aimed at organisations operating in industry, mobility, electricity, agriculture and the built environment, among others.

At 13 billion euros, the budget is substantially higher than previous years. This is due to several factors. For instance, the European CO2 price (ETS) is expected to fall higher. As a result, less subsidy than expected will be needed to finance previously approved projects. The windfall provides a one-off additional budget of EUR 2 billion. In addition, the previous cabinet made an extra EUR 6 billion available for an increase in the opening-up budget. This extra money ensures that more technologies and projects will be eligible. With this, the government wants to reduce CO2 emissions in the Netherlands faster.

Minister Jetten for Climate and Energy: "I am pleased that a substantial budget is available for scaling up renewable energy and other sustainable measures. This is not only necessary to make sustainability faster and meet our climate goals. But also to reduce our dependence on fossil fuel imports as quickly as possible."

opening budget is in practice always higher than the amount earmarked in the budget. This is because part of the subsidy is not needed in practice. For example, rising energy or CO2 prices may result in the 'unprofitable top' becoming smaller, thus requiring less subsidy. By making the opening budget higher than the reserved amount in the budget, the government prevents a lot of budget from being left on the shelf.

SDE++ scheme has been open since 2020 not only for renewable energy production, but also for other CO2-reducing technologies. This year, new categories have been opened up. As an example, the government mentions hydrogen plants directly linked to wind or solar farms. However, consider also the electrification of industry using hybrid glass furnaces.

Another change compared to previous years is that geothermal projects will be given more time to realise the project after the grant application. This should make the scheme more suitable for geothermal projects in the Netherlands. The ceiling for industry from the Climate Agreement has also been increased by 1.5 megatonnes. This as CO2 capture and storage has the potential to significantly reduce CO2 emissions in the short term. These projects will also be given longer time to be completed after a grant application.

SDE++ scheme works with opening rounds. Techniques with a lower subsidy per tonne of CO2 can submit their subsidy application earlier and will therefore be considered earlier. An overview of the opening rounds:

Author: Wouter Hoeffnagel