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  "documentTitle": "Roland Berger views on H2 market development",
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  "notes": "The slide discusses policy mechanisms for hydrogen market development in the Netherlands, referencing specific options (D3, D4) and historical success with offshore wind.",
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      "text": "In the short term, to start up the hydrogen market, the government should consider acting as market maker or instituting a feed-in tariff.",
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      "text": "11 A CfD is a contract between a seller of an underlying product (hydrogen) and the government, where the government pays the seller the difference between the value of the underlying product and a strike price when the value of the underlying product is less than the strike price. Usually there is a cap on the maximum paid (subsidized) amount. In a two-way CfD, the seller has to repay the government at market prices above the strike price. In a one-way CfD, as in the Dutch SDE++ system, the seller does not have to do so.",
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      "text": "Also, in a CfD the producers still need to find a buyer for the hydrogen. Initially, industrial consumers will have limited incentive for long-term contracts, as future prices are expected to be lower. This would not do much to speed up the development of a proper market and, if risks in the end do not materialize, would result in high profits for a few competitors rather than a vigorous market with many.",
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      "text": "If the Dutch government is prepared to take up the gauntlet, facilitate the start-up of the market, put in place the key success factors the Netherlands learned from natural gas, and build on its excellent starting position, the Netherlands can become the European renewable or low-carbon hydrogen hub - with all the considerable advantages that would bring to our energy transition, industry decarbonization and economic growth.",
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      "text": "However, if such a system were introduced for renewable or low-carbon hydrogen today, few parties would likely participate in the auctions and high-risk premiums would be included in the bids (after all, the technology risk is still high and there is no liquid renewable or low-carbon hydrogen market in place).",
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      "text": "For the mid to long term, the government is expected to (and should) settle on a contract for difference (CfD) system (option 3). -> D3",
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      "text": "CfDs have already proven very successful in driving subsidies for offshore wind to zero in the Netherlands and elsewhere.",
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      "text": "Such targets would allow the government to steer hydrogen supply towards the sectors where hydrogen is the only or most effective solution to decarbonize. This will help increase the willingness to pay, while decreasing the amount of total government subsidy required.",
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      "text": "This would interfere least with the market, promote competition, and allow for subsidies to gradually wind down to a subsidy-free system (option 4). -> D4",
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      "text": "One of the main considerations is that the tariff needs to be properly set to avoid too-high margins for the producers. This option also gives the government limited steering on security of supply. Additional measures would be required, such as firm hydrogen adoption targets to push consumption of the hydrogen it is subsidizing.",
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